November 26, 2024 – Binance, the global blockchain powerhouse and largest cryptocurrency exchange by trading volume, has unveiled BFUSD, the first reward-bearing margin asset issued by a crypto exchange. Notably, this offering is designed to provide passive returns for users holding BFUSD and enhanced rewards for those actively trading USDⓈ-M Futures while holding the asset.
Accordingly, BFUSD can be purchased and redeemed 1:1 for USD stablecoins on Binance, with minimal purchase and redemption fees. In addition, it can be used as a margin asset with near-full collateral value, aiming to attract traders seeking efficiency and added benefits.
“BFUSD is a user-friendly and exciting addition to our wide range of offerings, enabling users to enjoy daily rewards when they trade futures,” said Jeff Li, VP of Product at Binance.
How Binance Futures USD (BFUSD) Works
In a nutshell, the innovation lies in BFUSD’s ability to generate daily returns for its holders. Notedly, these rewards are funded through Binance’s delta-hedging strategy, which balances assets between spot and futures markets to collect funding fees, and from staking rewards.
For context, Binance will calculate and publish two types of reward rates daily:
- Base APY: For users holding BFUSD without qualifying trading activity.
- Boosted APY: For users who hold BFUSD and trade USDⓈ-M Futures.
Reward rates are updated daily and distributed in USDT, with a portion allocated to a BFUSD Reserve Fund to safeguard against potential market risks. Significantly, Binance is kickstarting the fund with $1 million USDT.
Key Benefits of BFUSD
- Daily Passive Revenue: Earn rewards simply by holding BFUSD.
- Boosted APY for Active Traders: Maximize returns with qualifying trading activity.
- Flexible Redemption: Convert BFUSD back to stablecoins seamlessly.
- Capital Efficiency: High collateral value ratio for margin trading.
- Risk Mitigation: Reserve fund buffers against negative funding rates.
Launch and Promotions
BFUSD will be available for purchase starting November 27, 2024 (02:00 UTC). To celebrate the launch, Binance is waiving purchase fees and offering $100,000 in Bonus APY and Token Vouchers through a promotional campaign from November 27 to December 26, 2024.
Binance remains committed to innovation in the crypto derivatives space. “Users enjoy the deepest liquidity and a wide range of offerings on our platform, and we will continue to explore more ways to enhance the user journey,” said Li.
For further details, visit Binance’s official announcement page.
