Binance, the world’s largest digital asset exchange, has confirmed that it’s been a month since it launched Binance Liquid Swap. The exchange also revealed that the platform is now hosting over $128 million worth of stablecoins, as of October 3, 2020.
The Binance team further noted that Liquid Swap will now be offering as much as 45% in daily APY to traders who pool their stablecoins (assets pegged 1-to-1 with major fiat currencies or real-world commodities like gold) on the platform.
Binance also explained where the increase in APY comes from. The exchange wrote in a blog post:
“Liquidity providers on Binance Smart Chain receive a share of the income from fees earned through pool transactions. They also receive flexible savings interest for their funds. For this boost in APYs, we will increase the flexible savings interest of the liquidity pools, and we intend to keep the high daily APY in the next few weeks.”
Going on to explain how flexible savings interest is calculated, Binance noted:
“Every 00:00 (UTC) of each day, we calculate the interest-bearing principal by getting the current balance for a certain asset in the token pool, subtracted by the amount added in yesterday, then increased the amount redeemed yesterday. We also take into account the flexible savings interest rate of the token pool from the previous day.”
Binance also explained why the 7-day APY rates are shown as 15% instead of 45% (what they’re supposed to be). The exchange noted that their system uses the “change in the value of shares over the last seven days to calculate the 7-day APY.” It also mentioned that the platform will begin “increasing the flexible savings interest for the pools on October 3, and the first reward from this boosted rate will be distributed starting October 4, 01:00 (UTC).”
The exchange further clarified that, “given the calculation logic of the 7-day APY, you will not immediately see the higher APY on the first day, but it will increase every day until it reaches as high as 45% after 7 days.”
Binance confirmed that once the increases have been set, traders and investors should be able to see 45% APY on the BUSD/DAI pool. The exchange also mentioned that the BUSD/USDT, BUSD/DAI, and USDC/USDT pools will “each see an increase to 25% APY.”
The Binance Liquid Swap not only offers high yields, but it also has zero gas and admin fees, which the exchange claims is “a big advantage over similar products.”
Other benefits of using the Liquid Swap include a relatively low transaction fee rate of 0.04%. There’s also low slippage, which ensures that “the rate you see when you swap is as close as possible to what you get.”
Binance’s Liquid Swap now also has support for API users. It recently listed USDC as its fourth stablecoin. It added USDC/USDT as its fourth liquidity pair.
(Note: for more details on these offers, check here,)
It’s worth noting that the cryptocurrency trading markets are mostly unregulated or loosely regulated. The US Commodity Futures Trading Commission (CFTC) recently charged BitMEX, a leading digital currency derivatives exchange, with allegedly engaging in illegal crypto derivatives trading, AML violations, and other criminal charges.
Meanwhile, Binance continues to operate without authorization in many different jurisdictions. It has also received multiple warnings from regulators.