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Solana Added As Collateral Asset For Binance Loans

Solana Added As Collateral Asset For Binance Loans

Binance, the world's largest crypto exchange by operational volume, recently announced the addition of Solana blockchain's native token, $SOL, alongside Avalanche's $AVAX token, as newly listed collateral assets for its Binance Loans program.

Binance Loans enables users to borrow crypto tokens or coins for Spot/Margin/Futures Trading or staking, opening opportunities to users to earn from high-APY trading or staking.

Solana, which has faced massive growth during 2021, with its market capitalization growing from roughly $85.8 million to $53 billion. Its decentralized smart-contract blockchain is designed as a backbone to an entire ecosystem of projects, which now counts over 400 active protocols and decentralized applications.

Attention to Solana has been on a steady rise in 2021, reaching a peak in September 15, when its entire protocol went down due to massive, piled-up transactions that went over 400,000 requests. These transactions then flooded Solana's transaction processing queue, disabling the network to the point of critical malfunction and causing it to start forking.

Due to this same degree of interest in Solana and its projects, the blockchain was subjected to a recent distributed denial of service attack by still unknown threat actors, effectively slowing the blockchain down from its estimated 50,000 TPS (transactions per second).

Avalanche, on the other hand, represents another high-level blockchain protocol that has made it to the Binance Loans official list. According to current industry statistics, Avalanche has the fastest smart contracts platform based on and in terms of time-to-finality. Notably, Avalanche also has the most number of validators  that provide security for its chain among all proof-of-stake protocols.

According to Binance, users may now access both AVAX and SOL as collateral assets, with tiered interest rates based on an individual user's VIP level. Lowered interest rates are available for higher-tiered users, while standard interest rates for the loans will also be measured based on a term sheet adjusted according to the number of days that a loan is held for.

There is, however, a key difference between the SOL and AVAX listing: between the two, only SOL collaterals can be used for staking.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

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