With the Beacon Chain launch in December 2020, the set of upgrades (ETH 2.0) that aims to improve Ethereum scalability is on track. As a part of phase 0 of the deployment plan, ETH can already be staked on this new chain. BETH allows you to easily participate on ETH staking without losing the flexibility to withdraw your ETH anytime.
What is BETH?
Due to the complexity of the upgrades, this is rolled out in several phases. The first step was to launch what’s called the Beacon Chain, which will be core to Eth2 once sharding is fully implemented. The Beacon Chain is already running, and as of March 2021, it has more than 3.5 million ETH securing it.
The deposit contract for the Beacon Chain works only one-way. This means that users can deposit, but they won’t be able to withdraw until ETH 2.0 is fully launched – which may take years. In addition, they’re only able to deposit in increments of 32 ETH.
All that ETH in the Beacon Chain is already receiving staking rewards. So, what do you do if you don’t have 32 ETH, or you want to maintain the flexibility to withdraw? You can join one of the many ETH 2.0 staking pools. One of these is provided by Binance.
You can convert your ETH to BETH at a 1:1 ratio and start receiving staking rewards in BETH. Great, but what if you still want to use your ETH elsewhere? Binance also has a BETH/ETH spot market, where you can convert your BETH back to ETH again.
How to use BETH
BETH in Binance Launchpool and Liquid Swap
BETH in Binance Liquid Swap
BETH in borrow-lending protocols
BETH on PancakeSwap
In short, this pool is less exposed to impermanent loss because the relative volatility between BETH and ETH is much lower than for something like ETH and BUSD. In other words, the price of ETH and BETH should generally remain in a small price range, so the effects of impermanent loss are mild.
BETH in yield aggregators
Is BETH worth more than ETH?
As such, BETH has different implications than ETH. The fact that it’s trading at a different price means that the market is pricing those qualities differently than ETH. BETH currently can’t be redeemed for ETH, which means there’s less flexibility to it than ETH. At the same time, it entitles the holder to staking rewards.
BETH is a tokenized version of staked ETH on Binance. You can earn ETH 2.0 staking rewards without having to worry about the technical requirements of setting up and maintaining an ETH 2.0 staking node. Apart from that, there are several ways to earn an additional yield using DeFi apps on the Binance Smart Chain.