The stablecoin market is booming, with a market capitalization of $186 billion by November 2024. Tether and Circle dominate this market, but other players such as Athena’s USDe, DAI, and First Digital USD are also present. Binance, the world’s largest cryptocurrency exchange, is now launching its own stablecoin, BFUSD, specifically for use in futures markets.
However, little information about BFUSD has been made public yet. BFUSD offers an annual return of 19.55%, considerably higher than other stablecoins. High-yielding stablecoins have caused problems in the past, as they often have unsustainable strategies, fraudulent systems, or hedge issues. Terra Luna and Terra UST are examples of stablecoins that moved away from their dollar peg due to high yields.
Choosing stablecoins is essential, as they often come with higher risks. It is wise to research the exchange or DeFi protocol used to invest in stablecoins and not rely on a single project or platform. High returns always come with higher risks, and it is essential to diversify the portfolio across multiple stablecoins.
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<p>The post Introducing BFUSD: Binance’s High-Yield Stablecoin Raises Concerns first appeared on CoinBuzzFeed.</p>