Binance recently launched an innovative product, BFUSD, a yield-based margin asset designed specifically for futures traders. By integrating BFUSD into trading strategies, users can not only improve trading efficiency, but also earn daily USDT rewards. The launch of this product marks an important step for Binance in optimizing user trading experience and innovating financial tools.
What is BFUSD?
BFUSD is an exclusive yield-generating asset launched by Binance for futures traders. Users can purchase BFUSD with USDT and use it as margin for U-margined futures, enjoying the following key benefits:
Daily USDT Passive Income: Simply holding BFUSD allows you to earn daily USDT rewards. The rewards come from Binance's Delta neutral hedging strategy and ETH staking.
Trading Flexibility: BFUSD can be used as margin for U-based contracts, enhancing trading capability. Trading with BFUSD also allows for additional upgrades to daily rewards.
Security and Redemption Flexibility: The initial reserve fund of 1 million USDT protects users from negative funding rates. Supports redeeming BFUSD for stablecoins (currently USDT).
Sources of Income and Operational Principles of BFUSD
The rewards of BFUSD are funded by Binance's investment and hedging strategies, mainly including the following two methods:
1. Delta Neutral Hedging Strategy: Binance minimizes the impact of market price fluctuations by hedging crypto assets (such as ETH) between the spot and contract markets, generating funding fee income.
2. ETH Staking Income: Use the sales revenue from BFUSD to purchase ETH and stake it, with the income generated used to reward BFUSD holders.
3. Reserve Fund Security: Binance has established an initial reserve fund of 1 million USDT to protect BFUSD investments and hedging strategies in adverse market conditions, avoiding risks from negative funding rates.
How to Buy and Use BFUSD?
Purchase Process
1. Log into your Binance account.
2. Go to the contract page and select 'BFUSD Rewards'.
3. Enter the amount of USDT you wish to exchange for BFUSD, ensuring there is sufficient balance in the U-based contract account.
4. After confirming the transaction, BFUSD will be deposited into the U-based contract account.
Note: Currently, only USDT is supported for purchasing BFUSD, and the purchase limit depends on the user's Binance VIP level.
Usage Method
As Margin: After enabling the combined margin mode, BFUSD can be directly used as margin for U-based contracts, enhancing trading flexibility and scale.
Earn Daily Rewards: Deposit BFUSD into your U-based contract account to earn daily USDT rewards at the basic interest rate. Completing at least one U-based contract transaction each day can also upgrade the reward ratio.
Redemption Function: Log into your Binance account, go to the contract page, select 'BFUSD Rewards' and click 'Redeem', enter the amount of BFUSD to exchange back for stablecoins and confirm.
Advantages and Value of BFUSD
1. Dual Income: BFUSD is not only a yield-generating asset but also serves as a flexible trading tool. When users utilize BFUSD in contract trading, they can improve capital efficiency while earning passive rewards, achieving dual income easily.
2. Security and Stability: Binance's Delta neutral hedging strategy and ETH staking provide stable support for BFUSD while protecting user assets in adverse market conditions through the reserve fund mechanism.
3. Flexibility and Convenience: Users can redeem BFUSD for stablecoins at any time, allowing for flexible and efficient fund management. Additionally, the purchasing and usage process is simple, suitable for various traders.
BFUSD is an innovative yield asset created by Binance specifically for contract traders, aimed at optimizing user trading experience and enhancing capital utilization. By holding and using BFUSD, users can not only earn daily rewards but also achieve higher returns while expanding trading scale.#BFUSD , users can not only earn daily rewards but also achieve higher returns while expanding their trading scale.
