🧐 Research Report | What is BFUSD officially launched by Binance, how to participate, what are the benefits, and what are the risks?
Today I finally had time to look at BFUSD, which is similar to Ethena in principle and can be regarded as a variant of USDT.
Moreover, it has just been launched. If you happen to have U deposits in Binance, you can pay attention to the benefits and principles. It can be said that it provides everyone with a good choice in the bull market.
I will just buy it first!
1️⃣What is BFUSD?
Binance Futures has launched BFUSD, an interest-bearing margin asset that rewards active futures users for holding eligible BFUSD balances in their futures wallets.
BFUSD can also be used as margin in a joint margin model while still earning rewards.
It is not a stablecoin in the traditional sense, as it cannot be traded on the open market or withdrawn from a Binance account, but is limited to use as margin for Binance futures trading.
BFUSD generates income through Binance’s investment and hedging strategies, such as hedging strategies in the futures and spot markets and providing holders with an annualized yield (APY) by staking crypto assets such as Ethereum.
Binance promises that the yield on BFUSD will not fall below zero, so holders can earn a return even when market conditions are unfavorable.
2️⃣How to participate? What are the benefits?
It can be regarded as a tool to make money lying down: users who hold BFUSD in the contract account wallet will be eligible for "daily rewards of US dollar stablecoins calculated at the daily base interest rate";
BFUSD can only be purchased with USDT. Find the BFUSD option on the futures trading platform and follow the instructions to purchase the amount of BFUSD you want. For the App version, go to [Contracts] and click the banner [Hold BFUSD and enjoy increased returns].
There is currently no handling fee;
According to official data, the BFUSD launched by the Binance contract trading platform currently has an issuance volume of 120 million, a system mortgage rate of 101.32%, a basic APY of 29.18%, and an increased annualized rate of return of 38.98%.
If you happen to be doing futures as well, BFUSD can also be used as margin in a joint margin model while still earning rewards.
3️⃣Risk related
What are the risks?
1) Negative funding rate: This may result in reduced returns due to the need to pay funding fees.
2) Binance credit risk: If Binance goes bankrupt, you may not be able to get your money back.
3) Redemption Delays: In some cases, redemption of BFUSD for USD may be delayed.
4) Fee Changes: The fees for purchasing and redeeming BFUSD may change, affecting your returns.
5) Limited rights: You only have the right to exchange and daily rewards, but not the right to other benefits that make up the BFUSD assets.
For details, please see: https://www.binance.com/zh-CN/support/faq/%E4%BB%80%E4%B9%88%E6%98%AF-bfusd-%E4%BB%A5%E5%8F%8A%E5%A6%82%E4%BD%95%E5%B0%86%E5%85%B6%E7%94%A8%E4%BD%9C%E5%90%88%E7%BA%A6%E4%BA%A4%E6%98%93%E4%BF%9D%E8%AF%81%E9%87%91-98e52d2bf2db4e0c963fb41004080826?hl=zh-CN
