Binance has introduced an index-linked auto-invest plan that makes it easier for users to earn passive crypto income without the need for detailed coin and chart analysis. They recommend the plan to beginners who want to get access to the cryptocurrency market.
According to Binance, the plan is equally weighted, beginner-friendly, with monthly rebalancing.
The exchange plans to launch more diversified indices in 2023 and integrate them with other Binance products.
What is Binance’s index-linked plan?
The plan allows users to buy the top ten cryptocurrencies by market cap on Auto Invest.
Auto Invest is a feature that automates crypto purchases using the Dollar Cost Averaging (DCA) investment strategy. By default, Auto Invest allows users to select a cryptocurrency, which is then automatically purchased and sent to the flexible account, where it earns passive income.
With the Auto-Invest plan, you choose the cryptocurrency you want to invest, the amount and duration for DCA.
The index-linked plan saves you the hassle of selecting crypto from the Auto-Invest plan by investing in the top ten cryptocurrencies by market value.
While you cannot buy the index, you can buy the cryptocurrencies that make up this index.
Cryptocurrencies that make up the index must meet a criterion representing the top 10 weighted coins on Coinmarketcap.
Binance and Coinmarketcap must have listed the coin for at least 30 days. It should not be wrapped or paired with other assets or an algorithmic stablecoin; The index also does not include meme coins.
The current index consists of BTC, ETH, BNB, XRP, ADA, MATIC, DOT, TRX, LTC and SOL.
The fees for auto-invest transactions originating from the Binance liquidity pools are 0.2%. In comparison, the exchange charges a rate of 0.1% of the amount of assets paid in the auto-investment currency for asset rebalancing transactions.
As the crypto landscape is constantly changing, the value of any asset will change over time. Regular index rebalancing means automated trades that ensure each asset allocation is in line with the index.
The exchange will base the asset rebalancing on data collected by Coinmarketcap every fourth Monday of the month at 00:00 UTC. They will then rebalance on Friday of the same week, a process estimated to take 3 to 6 hours during which subscribers will not be able to make changes to the plan.
Two options are offered for the recurring cycle, one-time purchase and recurring purchase. With a one-time purchase, you subscribe to the index-linked plan once, while with a recurring purchase, you subscribe to the plan on a daily, weekly, biweekly, or monthly basis.
Interested users can automate index purchases, which the exchange rebalances each month.
The plan is only available on the app, but you can monitor it from their website.
How to set up an index-linked plan
- Sign in/login to your Binance app.
- Tap on “More” and then on “Invest automatically”.
- Click Index Linked and select Create Plan.
- Enter the amount you want to invest and the base stablecoin.
- Select the recurring cycle and when to purchase.
- Review your plan and edit it if necessary. Click on “Confirm”.
- Read the instructions on the next screen and click Confirm.
To manage or edit your plan, go to the My Plan option and select Index Linked. In the next window you can view all tour plans. Click “View Details” to edit.
To redeem your credit, follow the prompt above; After View Details, select Redeem. Enter the percentage of credit to redeem, then click Confirm. The exchange sends redeemed funds to your Spot wallet.
To remove the plan, you must first redeem all assets. After that, a “Remove Plan” button will appear. Click the button to remove the plan.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.