Binance unexpectedly launched a product page introducing 'BFUSD' on the early morning of the 19th, which stated that the annualized yield (APY) of BFUSD is expected to reach 19.55%, attracting community attention. However, Binance later stated on social media that BFUSD is not a stablecoin, and how it will provide yields will be announced later.
The news sparked community attention and discussion, offering a maximum annual return of 19.55%, reminiscent of the now-collapsed project TerraUSD under LUNA, which once provided staking users with a 20% annual yield through Anchor Protocol but ultimately collapsed in 2022, with UST, once considered a stablecoin, seriously decoupling. Subsequently, Binance clarified that BFUSD is not a stablecoin, stating that more detailed content will be published, and the BFUSD-related page will be taken down.
BFUSD is not yet launched.
To be clear, it is not a stablecoin but a reward-bearing margin asset for futures trading.
We are glad to see the community's interest and will be sharing more details soon including how APY is determined.
— Binance Customer Support (@BinanceHelpDesk) November 18, 2024
According to the introduction page that has been temporarily taken down, BFUSD is described as 'a reward-bearing margin asset for futures trading', aimed at providing users with attractive, easy yields without needing to stake or lock funds. Its main features include:
1. Easy profits: Users only need to store BFUSD in their accounts to receive daily rewards. 2. High annual yield: An annual yield of 19.55%, which is claimed to surpass the yields offered by many other stablecoins. 3. As collateral: BFUSD can be used as collateral at a 100% collateral ratio in a multi-asset model, enhancing trading potential.
Users can hold BFUSD in their UM wallets and receive daily airdrops as rewards. The cryptocurrency exchange's reward system calculates interest based on the minimum hourly balance of BFUSD in the user's account, derived from hourly snapshots. Rewards will be distributed daily to UM futures accounts and can be tracked in the reward history section.
Users can only purchase BFUSD with USDT transferred into their UM wallets, and must trade daily to activate the reward mechanism. Each user's quota of BFUSD is determined by their VIP level, with further details to be announced by Binance.
Since February 2023, Binance has been transitioning from Binance USD (BUSD), when U.S. regulators required Paxos to stop issuing the stablecoin. The current stablecoin landscape shows a diversification of products, with Tether's USDT holding a 74% market share. Competitors like Ethena's sUSDe offer similar high yields at a 29% annual return, while traditional finance is entering this space with products like BlackRock's BUIDL tokenized money market fund.
"Binance will launch the non-stablecoin 'BFUSD', claiming that the annual yield can reach up to 19.55%" this article was first published on (Block Geek).