Cryptocurrency exchange, Binance, announced the third phase of its controversial crypto-lending product yesterday. This time it has included options to earn interest on XRP, Litecoin (LTC), and stable coin, USDC. These join the so far ever present, Binance coin (BNB), Ethereum Classic (ETC), and Tether (USDT).

Binance Ups its Lending Game

The basic concept of the scheme is simple. By depositing your tokens for a fixed term of 14 days you receive a fixed interest rate (paid in tokens) on maturity. Phase two of the product also included a 28 day term option, but this time participants are limited to 14 days.

There is an overall subscription cap to the amount of each token which is accepted in a phase, and also a limit as to how much an individual can lend. This time around, interest is set at an annualised rate of 7%, other than for BNB and Tether, which attract a 10% annualised interest rate.

Subscriptions are allocated on a first-come first-served basis, and start for this phase on Sept 11 at 6am (UTC).

XRP and Litecoin Join The Party

New entrants to the third phase product include XRP and Litecoin. XRP has a total subscription cap of 1,000,000, with an individual cap of 50,000 XRP. At the 7% interest rate, a 100 XRP lot would receive 0.268493 XRP in interest at the end of the 14 days. Litecoin has a total subscription cap of 6,000 LTC, with an individual cap of 300 tokens.

The other newcomer is stablecoin USDC, which joins stalwarts of the scheme, BNB, ETC and USDT.

This means that phase two tokens, Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA) have been dropped for this phase.

Is Crypto-Lending Necessarily A Good Thing?

However, as Bitcoinist reported, not everyone is convinced that Binance’s crypto-lending product is such a good thing.

From concerns about the fixed interest rate, to (perhaps unfair) comparisons with scam platform, Bitconnect, many have been vocal in condemning the scheme. In many ways it does seem designed to encourage more people to hodl Binance’s BNB coin.

There is also the issue of depositing tokens with a centralised exchange, which has already been the victim of a hack this year. Customers did not suffer any loss from the hack, but handing control of keys to an exchange is never a recommended move.

The first two phases of the lending product have been fully subscribed however, so it seems there are still plenty who buy into Binance’s latest innovation.

What do you think of Binance’s new lending scheme? Add your thoughts in the comment section below!

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