- The cryptocurrency exchange Binance unveiled BFUSD, a futures trading reward-bearing margin asset, on Monday.
- BFUSD can be used as collateral and will provide an annual percentage yield of 19.55%.
- Binance claimed in a social media post that BFUSD is not a stablecoin and has not yet debuted.
- Take advantage of an alluringly high APY on your BFUSD holdings, which is higher than the yields provided by many other stablecoins.
On Monday, Binance revealed BFUSD, a new currency that some observers claimed resembled a high-yield stablecoin. Despite the “USD” suffix in its name, the cryptocurrency exchange giant later emphasized that the asset, which would pay a 19.55% annual percentage yield, is not a stablecoin.
BFUSD has not yet been introduced. The token is a reward-bearing margin asset for futures trading, not a stablecoin, as a cryptocurrency news aggregator @zoomerfied has claimed.
However, as of 17:30 UTC, the fine print at the bottom of its webpage said: Take advantage of an alluringly high APY on your BFUSD holdings, which is higher than the yields provided by many other stablecoins.
There was a lot of interest in the token because of its exceptionally high APY; several people compared it to the now-defunct TerraLUNA stablecoin, which paying users could obtain 20% of using the Anchor Protocol. We’ll be revealing more information shortly, including how APY is calculated, but it’s uncertain how BFUSD will produce yield.
The asset’s launch page states that customers can use BFUSD as security without “staking or locking up your funds.” According to the blog, users will instead keep the asset in receive daily airdrops to their UM Futures Wallet based on hourly snapshots and have a “UM wallet” Users’ “limit quota of BFUSD” will be determined by their “VIP level.”
Since they don’t adhere to the conventional reserve-asset model that was established by Tether and Circle, other companies have lately launched tokenized products that are based on the US dollar but aren’t commonly referred to as stablecoins. These assets include the USDe “synthetic dollar” from Ethena, which employs an automated delta-hedging trading method to keep its peg, and the BUIDL token from BlackRock, a onchain money market fund that invests in short-dated US Treasury bills.
Binance developed its stablecoin Binance USD (BUSD) in 2019, with web3 payments infrastructure provider Paxos serving as the token’s issuer and fiat reserves custodian. However, in response to pressure from U.S. regulators, Binance phased away support for the BUSD by February 2024. It recommended that users move to the stablecoin First Digital USD (FDUSD).
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
