Binance Unveils Implementation of BFUSD as Official Currency for Futures Trading

• Binance introduces the new BFUSD stablecoin that allows futures account owners to potentially earn gains as high as 19.55%, backed by a 101.32% collateralization rate and a circulating volume of 120 million units.
• BFUSD offers a two-tier APY system, with a base yield of 29.18% and a higher tier offering up to 38.98%, disbursed as daily interest.

The leading global digital currency exchange, Binance, recently unveiled its innovative BFUSD asset, affording investors the opportunity to maximize returns. This new offering was

announced

on November 26, enabling futures account users to pursue returns as high as 19.55%.

Commencing sales at 2 AM UTC on November 27, Binance’s BFUSD provides a flexible and rewarding financial instrument for users. By affording the use of this margin asset in diversified trading practices and featuring a considerable supply quantity of 120 million plus sturdy collateralization, BFUSD underscores Binance’s dedication to economic reliability and user trust.

Offering various attractive benefits, BFUSD enables investors to engage with a base yearly return of 29.18% and a heightened yield that can reach up to 38.98%. A notable aspect of BFUSD is Binance’s commitment to maintaining the reward rate at no less than zero, offering investors a level of protection in fluctuating markets.

BFUSD: Binance’s Exclusive Asset for Futures Trading

Tailored explicitly for futures trade on its platform, Binance positions BFUSD as an asset specific to its proprietary ecosystem, distinct from typical stablecoins. This asset remains confined to futures accounts and is not available for external withdrawal or trading on the open market, differentiating it from more common cryptocurrencies.

“[BFUSD] is solely utilized as collateral for futures trading on Binance and can be swapped with Binance for the USDT stablecoin,” explained a Binance representative.

BFUSD’s returns are derived from sophisticated strategies including delta hedging across spot and futures markets, along with strategic Ethereum staking. These methods afford Binance the capacity to collect funding fees and secure consistent passive returns for their investors, with a historical analysis revealing a positive funding rate for ETH/USDT consistently over the past year.

BFUSD subscribers must adhere to certain requirements yet enjoy corresponding advantages. A transfer of USDT to a UM wallet is mandatory, with an elevated APY available to those who hold UM futures trading positions from the preceding day. Daily credited interest to UM Futures accounts provides timely and regular dividends to users.

BFUSD Investment: High Risk Without Direct Asset Claims

Although BFUSD poses an alluring investment prospect, Binance clearly communicates inherent risks. Potential investors should be cognizant of possible negative funding rates and the fact that they possess no immediate rights to the collateral pool, hedging assets, or reserve funds. Engagement in BFUSD comes with an acceptance of credit risk and possible redemption complications.

To alleviate such concerns, Binance has inaugurated a specific BFUSD Reserve Fund starting with a deposit of 1 million USDT. This reserve fulfills a variety of functions, including counterbalancing possible funding fees, sustaining the collateralization pool, and managing hedging portfolios, acting as a safeguard against market tumult.

To entice trailblazers, Binance has announced an appealing promotional phase from November 27 to December 26, during which transactions involving BFUSD incur no fees. Participants can also seize the opportunity to reap up to 100,000 USDT in bonus APY and receive USDT vouchers, further sweetening the potential benefits of this novel financial instrument.