Binance, one of the world's largest cryptocurrency exchanges, has announced a new investment vehicle called BFUSD. In the statement made by Binance, it was emphasized that BFUSD is not a stablecoin, but rather a margin asset that can be used as collateral in futures trading and offers rewards. However, despite this, it is stated on the Binance website that BFUSD leaves many stablecoins behind with its high annual return.

High Yields and Comparisons

BFUSD is targeting a remarkable 19.55% annualized return. This high yield has been compared by some investors to the 20% returns promised through TerraLUNA’s Anchor Protocol. Binance plans to reveal more details about how BFUSD will generate revenue in the coming days. Users will be able to transfer their earnings to their UM Futures wallets via daily airdrops without locking or staking their BFUSD holdings.

Not a Stablecoin, but a Different Model

BFUSD, while not defined as a stablecoin, is compared to other dollar-denominated assets that have been launched in conjunction with the US dollar. For example, products such as BlackRock’s BUIDL token and Ethena’s USDe “synthetic dollar” model offer different strategies beyond traditional stablecoins. Binance previously announced that it would end support for its stablecoin BUSD as of February 2024 due to pressure from US regulators, and directed its users to switch to FDUSD.

Binance's New Strategy: High Yields and Futures

The new BFUSD asset shows that Binance is focused on offering high-yield margin trading to investors with a strategy that differs from stablecoins. This model can be used as collateral in the futures market, while also allowing users to benefit from current returns. However, it should be noted that investors should carefully consider the potential risks in such high-yield products.

This innovative investment model offered by Binance with BFUSD has become one of the platform’s differentiating strategies in the market. Investors should carefully analyze the risks and rewards of this product before being tempted by the returns that can be obtained with this new asset.