As a seasoned analyst with years of experience in the cryptocurrency market, I find the introduction of BFUSD by Binance as an intriguing development. With a potential yield of up to 19.55%, it’s hard not to be drawn to this new offering. However, as always, it’s crucial to remember that high yields often come with higher risks.
Starting today, Binance – the world’s biggest cryptocurrency exchange – unveiled its new reward-earning digital asset called BFUSD. This asset promises returns for users who maintain qualifying balances in their futures account, with potential yields reaching up to a significant 19.55%.
Binance’s BFUSD is an investment asset that offers rewards on eligible balances kept in your futures account. This asset not only provides returns but can also act as collateral when using multiple assets, continuing to generate rewards simultaneously.
Binance Introduces High-Yield BFUSD Margin Asset
As a researcher, I’m excited to share that Binance Futures officially announced the launch of their new reward-bearing asset, BFUSD, on November 26. Starting from 2AM UTC on November 27, users can begin purchasing this margin asset.
The crypto exchange has set limit quota of the margin asset, which is based on a user’s VIP level. In order to participate, transfer USDT to UM wallet. Holders who traded UM futures one day prior will only get boosted APY. Interest payments will be distributed daily to users’ UM Futures accounts.
The amount available for use is approximately 120 million units, with a collateral ratio set at 101.32%. This setup will provide a base annual percentage yield (APY) of about 29.18%, which can be increased to a boosted APY of 38.98% according to Binance’s data.
Benefits and Risks of Holding the Asset
In simpler terms, having BFUSD allows you to exchange it for a stable form of cryptocurrency that maintains its value relative to the U.S. dollar, making it a great option if you’re looking for stability within the crypto market. Users can easily convert their BFUSD into US dollars when needed.
Furthermore, they’ve established a BFUSD Reserve Fund primarily for covering potential expenses related to funding defaults, as well as maintaining the Collateral Pool and the Hedging Portfolio.
A significant advantage lies in the ability to trade USD-M contracts on a multi-asset platform, which is one of its key features. Every day, you’ll find two rates for rewards: the base rate and an enhanced boosted rate. The platform uses funds from BFUSD sales to invest strategically, generating passive income.
When you keep a margin asset, you might encounter risks such as having to pay unfavorable lending rates, not receiving any benefits from the collateral pool, hedging portfolio, or reserve fund, and there’s no claim or entitlement beyond what’s stated. Furthermore, users may also face Binance credit risk, potential redemption issues, and various fees that could be applicable.
Previously, Binance confirmed to CoinGape that BFUSD is not a stablecoin. Additionally, the platform has launched a promotional offer for those who adopt it early. Perks include buying without any fees and receiving 100,000 USDT in token vouchers.
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2024-11-26 12:01