📢 Binance Wallet's Latest Features, On-Chain Lending

From now on, you don't have to worry about not being able to borrow or high interest rates during TGE

Operation Process

1️⃣ Click on the Financial icon to enter Wallet Finance

2️⃣ Select Simple Yield, choose Loan, and select the asset you want to borrow

3️⃣ Deposit assets as collateral and proceed with the borrowing

⚠️ You need to answer questions before proceeding with collateral or borrowing; the answers are as follows

1. No 2. All of the above 3. In decentralized finance agreements 4. Options 2 and 3 5. All of the above

🔸 What is the difference between exchange lending?

Exchange lending is mainly conducted within the exchange, this new feature is for on-chain borrowing

The underlying DeFi protocol is Venus Protocol, a very established protocol with a low likelihood of a crash

🔸 What are the benefits of on-chain borrowing?

There are mainly two benefits: lower interest rates and a larger supply

For example, borrowing BNB during TGE, during the initial period, the interest rate on OKX usually spikes to 30-40%, and the interest for borrowing BNB on Bybit also increases

In contrast, the interest rates on Venus are generally between 1% to 3%, which is lower in cost, and because of the larger supply, you don't have to worry about not being able to borrow

🔸 What are the risks?

Similar to borrowing funds through exchange collateral, the biggest risk is that price volatility can lead to liquidation, so you must provide enough collateral

Be cautious, if the health factor drops below 1, it will be liquidated

The health factor calculation formula: Collateral asset value * Collateral factor / Borrowed asset value

For example:

Collateral asset: Deposit value of $1,000 in USDT, collateral factor is 70%

Borrowed asset: Borrowed out value of $500 in BNB

Health factor: $1000 * 70% / $500 = 1.4