Cryptocurrency Markets Binance has attempted to allay concerns about its new high-yield “BFUSD” token — clarifying that it is not a stablecoin and has not yet launched.
In a November 17 post on X, cryptocurrency news aggregator Zoomerfied informed users that Binance would launch a stablecoin with a 19.55% annual yield, leading many on X to draw comparisons to Terraform Lab's failed algorithmic stablecoin, now known as TerraClassicUSD (USTC).
Source: Zoomer
However, Binance confirmed in a comment on X that BFUSD is indeed an unreleased yield margin trading product.
“BFUSD has not been launched yet. To be clear, it is not a stablecoin but a collateral asset that provides rewards for futures trading,” Binance Customer Support replied.
Source: Binance Customer Support
According to the official asset launch page on Binance, traders can use BFUSD as collateral without having to “stake or lock” their funds.
Instead, traders will hold BFUSD assets in their “UM” wallet and accumulate daily airdrops sent to their “UM Futures” wallet based on snapshots, and users will have a BFUSD quota based on their social rank, called “VIP level” on the Binance platform.
Before Binance’s clarification, many crypto commentators were quick to draw comparisons to Do Kwon’s now-defunct algorithmic stablecoin, which once promised 20% yields.
“How… how many Anchors have… Yielded?” asked anonymous trader RunnerXBT.
Anchor is the protocol responsible for delivering 20% yield on Terra Luna's algorithmic stablecoin.
“Can we?” he added a few moments later.
In May 2022, the price of the then-$18 billion stablecoin USTC fell from its $1 peg to below $0.01 in less than a month as the Terra Money cryptocurrency ecosystem experienced a withdrawal equivalent to a bank run in DeFi (DeFi), with thousands of users rushing to withdraw their tokens at once.
UST is part of a larger token ecosystem that includes Terra (LUNA), its companion asset that is expected to help stabilize UST’s peg price. Similarly, LUNA has fallen from $80 to less than a tenth of a penny in a week.
Some others also seem to be immediately haunted by the mysterious promises of unclear returns.
“Are we the profit?” another user asked.
The initial post also sparked curiosity from OG Bitcoiner Jameson Lopp.
Source: Jameson Lopp
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