What is BFUSD?
BFUSD is a newly created margin asset that offers a unique advantage for Binance Futures users. Purchased with USDT, BFUSD serves both as flexible margin for futures trading and a generator of passive income. By holding BFUSD in your wallet, you will earn daily rewards funded by Binance's robust investment and hedging strategies, which include delta hedging and Ethereum staking.
These rewards are not only obtained by holding BFUSD, but are amplified for those who use BFUSD as margin in USDⓈ-M futures, providing a significant advantage in terms of profitability. The key to its success lies in Binance's investment and hedging strategies, which ensure that BFUSD remains a stable and low-risk asset.
How BFUSD Works
Reward Generation Strategy
The reward structure of BFUSD is driven by sophisticated investment strategies:
Delta Hedging: Binance employs a delta-neutral strategy, minimizing exposure to volatile market movements by hedging crypto assets, such as Ethereum, between the spot and futures markets. This strategy generates funding fees without exposing capital to significant risks.
Ethereum (ETH) Staking: The sale of BFUSD is used to buy Ethereum, which is then staked to generate rewards. These staking profits contribute to the reward pool distributed to BFUSD holders.
How Do Daily Rewards Work?
Each day, Binance calculates a Daily Reward Rate based on the income generated by these investment strategies. The rewards are then distributed in USDT to BFUSD holders. It is important to note that traders who use BFUSD as margin in USDⓈ-M futures will receive increased rewards, creating an incentive to engage actively with the platform.
Reward Distribution:
Base Rate: Earned simply by holding BFUSD in your wallet.
Increased Rate: Earned by trading USDⓈ-M futures using BFUSD as margin.
Reserve Fund: A portion of the rewards is allocated to a Reserve Fund designed to protect against negative funding rates during market volatility. Initially funded with 1 million USDT, this fund ensures the sustainability of BFUSD even in adverse market conditions.
Reserve Fund for Protection
To protect users from negative funding rates, Binance has established a Reserve Fund. This fund acts as a safety net, being replenished daily with a portion of the reward reserve, ensuring the long-term viability of the BFUSD strategy. As market conditions fluctuate, the Reserve Fund continues to grow, maintaining stability against unpredictable market movements.
How to Buy BFUSD
Buying BFUSD is a simple process on Binance:
Log In: Access your Binance account.
Navigate: Go to the Futures section and select BFUSD Reward.
Buy: Convert USDT into BFUSD, ensuring you have sufficient balance in your USDⓈ-M futures wallet.
Confirm: Review and complete the purchase.
Important Notes:
You can only buy BFUSD with USDT.
Ensure that Multi-Asset Mode is enabled in your account settings to use BFUSD as margin in futures trading.
The purchase limit is determined by your VIP level on Binance, and transaction fees may apply.
How to Use BFUSD
1. Margin for Futures Trading:
BFUSD acts as a direct margin for USDⓈ-M futures trades, enhancing your ability to execute larger positions with less capital. There is no need to convert it; just enable Multi-Asset Mode and you can use BFUSD in your futures trades.
2. Earn Daily Rewards:
Holding BFUSD in your wallet generates daily rewards at the Base Rate. For active traders, participating in USDⓈ-M futures using BFUSD as margin activates the Increased Rate, further boosting the daily rewards you receive. These rewards are automatically credited to your futures wallet the next day.
3. Redeem BFUSD for USD Stablecoin:
When you wish to liquidate your BFUSD, the process is simple. Log in, go to the Futures section, and select the Redeem option. BFUSD will be converted to USDT and credited to your wallet.
Why Choose BFUSD?
BFUSD is not just another asset; it is a transformative tool for traders looking to maximize their returns while trading futures. Here’s why it is revolutionary:
Earn Passive Income: Hold BFUSD and earn daily rewards.
Increase Your Rewards: Trade USDⓈ-M futures with BFUSD as margin to receive increased rewards.
Strategic Flexibility: Use BFUSD as margin, redeem it for USDT, or simply earn rewards: all without the need to convert assets.
Protection Against Volatility: The Reserve Fund ensures that your rewards are protected against market fluctuations and negative funding rates.
Conclusion
BFUSD offers an exciting new opportunity for Binance Futures users to optimize their trading strategies while earning passive income. By using BFUSD, traders can access flexible margins, earn daily rewards in USDT, and maintain total flexibility with their funds. The ability to use BFUSD as margin allows for maximizing trading capacity while obtaining an additional flow of passive income.
Remember, BFUSD is available exclusively on Binance, the leading crypto derivatives platform in the world. This offering reinforces our commitment to innovation and providing users with more options to optimize their trading experience. Explore the benefits of BFUSD and see how it can contribute to your trading experience on Binance!
