Binance has just launched BFUSD, a collateral asset specially designed for futures trading while also providing passive income. A noteworthy feature of BFUSD is the commitment to an annual percentage yield (APY) that 'never falls below 0%', protecting users from the negative impacts of negative returns.
Main characteristics of BFUSD:
1. Guaranteed non-negative APY:
• Users holding BFUSD will receive a basic APY accumulated daily, even if they do not trade futures.
• Futures traders of USDⓈ-Margin will enjoy a higher APY.
2. APY range:
• According to data from Binance, the basic APY of BFUSD ranges from 12% to over 35% during the period of November 20 - November 25.
• Additional APY (for futures trading) reaches from 15% to over 47%.
3. Usage and limitations:
• BFUSD is not a stablecoin and cannot be publicly traded or withdrawn from the futures account.
• It can only be used as collateral for futures trading on Binance and can be exchanged for USDT.
4. Profit generation strategies:
• Delta hedging: Taking advantage of the difference between the spot market and futures contracts.
• Staking Ethereum: Acts as an additional profit-generating source.
Scope of application:
• Only applicable to eligible Binance users in supported regions. Some regions like the United States will be restricted.
Comparison with similar products:
• Although BFUSD shares similarities with USDe from Ethena (which also uses delta hedging to generate rewards), Binance emphasizes that BFUSD is distinct and provides passive income by default, while USDe does not generate rewards on its own but depends on how users utilize it.
Implementation time:
• BFUSD officially launched at 02:00 UTC on November 27, 2024.
Insight:
The launch of BFUSD is a step forward for Binance in providing stable returns to users through complex strategies such as delta hedging and staking. However, users need to carefully consider the risks and limitations of the product, especially since BFUSD is not publicly traded and is only used within the Binance ecosystem.
