Binance is using BFUSD to replicate Ethena (ENA) to achieve financial management without affecting trading stablecoins

What is BFUSD?

An interest-raising margin asset that provides rewards to active contract users.

BFUSD can also be used as margin in the joint margin model while still earning rewards.

Source of income? (Exactly the same as ENA)

Using stablecoins to build a delta neutral strategy, the arbitrage principle is to hedge the contract position with the spot position to collect funding fees.

For example: holding 1ETH spot, shorting 1ETH in the contract market. No matter how the ETH price fluctuates, it will not explode. The income obtained comes from the funding rate settled every 8 hours. The current funding rate of ETH is 0.01%. The annualized income is 0.01% (funding rate) * 3 (number of settlements per day) * 365 (number of days in a year) = 11%

Funding rate income and staking income: holding the spot part also has staking income

What are the advantages of BFUSD compared to ENA?

Safer: All operations are carried out within the exchange without on-chain risks

More efficient use of funds: In the joint margin mode, BFUSD can be used as collateral. Gaining income without affecting transactions

Larger fund scale: All currencies that support U-based contracts can build delta neutral strategies

No interaction costs: No gas fees, and no handling fees are charged for buying at present.

How to participate? What are the benefits?

For players with financial management needs, this is a tool for lying down and making money

There are two reward rates every day:

Base interest rate: Applicable to BFUSD holders who do not have U-based contract trading activities

Increase interest rate: For BFUSD holders with qualified U-based contract trading activities, the interest rate is relatively high.

⚠️Notes

1. The unified account does not support BFUSD yet, and needs to be set to normal mode

2. Each account has a maximum purchase limit. Ordinary users have a limit of 100,000, which is enough for normal users

3. The interest rate obtained by holding U-based contract positions will be higher

4. BFUSD can be exchanged with USDT at a 1:1 ratio, but a 0.1% fee is required for both purchase and redemption. Currently, purchase is free.