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Key Takeaways

Solv Protocol is a platform that bridges Bitcoin with decentralized finance (DeFi), enabling Bitcoin users to maximize the value and utility of their holdings.

Solv Protocol bridges Bitcoin to DeFi, enabling staking and yield generation through tools like SolvBTC and Liquid Staking Tokens (LSTs).

The Staking Abstraction Layer (SAL) allows seamless Bitcoin staking across blockchains, enhancing interoperability and user experience.

Introduction

Bitcoin has long been considered a good store of value and a hedge against fiat depreciation. However, its utility in the Web3 ecosystem has been limited due to the lack of cross-chain compatibility and accessible financial instruments. 

Solv Protocol aims to change that by introducing tools and infrastructure that enable Bitcoin to be used more actively in the Web3 and decentralized finance (DeFi) space.

What Is Solv?

Solv Protocol is a platform that bridges Bitcoin with decentralized finance (DeFi), allowing Bitcoin holders to unlock the full potential of their assets. 

With Bitcoin being the biggest cryptocurrency in the world, its integration into DeFi can offer users opportunities to earn yields, engage in new financial strategies, and benefit from blockchain interoperability.

At its core, Solv Protocol provides Bitcoin holders with the ability to stake, earn yields, and leverage financial products, all without sacrificing liquidity or control over their assets.

Key Features of Solv Protocol

1. SolvBTC: a Bitcoin reserve token

SolvBTC is a central component of Solv Protocol. It’s a Bitcoin reserve token backed 1:1 by BTC. This token acts as a bridge, enabling Bitcoin holders to participate in DeFi activities on various blockchains.

In other words, Bitcoin holders deposit their BTC into Solv Protocol, where it is converted into SolvBTC. This token represents their Bitcoin holdings and serves as a gateway to DeFi opportunities.

By holding SolvBTC, users can:

Access yield opportunities in the DeFi space.

Participate in staking programs.

Trade or provide liquidity across multiple chains.

SolvBTC ensures that users retain the value of their Bitcoin while engaging in financial strategies that were previously unavailable to them.

2. Liquid Staking Tokens (LSTs)

Liquid Staking Tokens are another innovative feature of Solv Protocol. These tokens allow Bitcoin holders to stake their assets while maintaining liquidity. In traditional staking, assets are locked up, making them inaccessible for other uses. LSTs solve this problem by representing staked assets, which means LSTs can then be used in other applications.

Solv users can stake their SolvBTC to earn LSTs, allowing them to continue generating staking rewards while using their assets in DeFi platforms, such as liquidity pools or decentralized exchanges.

In addition, SolvBTC and LSTs can be traded, lent, or used to provide liquidity on supported DeFi platforms, further enhancing earning opportunities.

3. Staking Abstraction Layer (SAL)

The Staking Abstraction Layer (SAL) is an infrastructure that simplifies Bitcoin staking. SAL serves as a unified interface, enabling users to stake BTC across multiple ecosystems. As such, SAL allows users to access various staking protocols across different blockchains. 

With this abstraction, they can participate in yield-generating activities without the need to interact directly with multiple networks and systems.

Key benefits of SAL include:

Enhanced interoperability between blockchains.

Easy access to diverse yield streams.

A simplified user experience, eliminating the complexities of managing multiple staking protocols.

SOLV Token

The SOLV token is the native utility token of the Solv Protocol, designed to facilitate governance, incentivize participation, and enhance the overall functionality of the ecosystem. It serves as a multi-purpose asset that enables users to actively engage with the protocol.

Key use cases of the SOLV token include:

Governance: SOLV holders can participate in the decision-making process by voting on proposals related to protocol upgrades, parameter adjustments, and new feature implementations.

Staking incentives: Users can stake their SOLV tokens to earn rewards, further enhancing their earning potential within the ecosystem.

Fee discounts: SOLV tokens can be used to pay for transaction fees within the protocol, offering users reduced fees as an incentive for using the native token.

Reward distribution: The SOLV token is also used to reward contributors, such as validators and liquidity providers, who play an important role in maintaining and expanding the Solv Protocol network.

Why Solv Protocol Matters

Enabling Bitcoin to participate in DeFi unlocks the earning potential of the world's most popular cryptocurrency. Solv made it possible for Bitcoin holders to generate yields on their holdings instead of leaving them idle.

In addition, the protocol is expanding DeFi participation, making it easy for Bitcoin users to access DeFi opportunities without unnecessary technical barriers. With tools like SolvBTC, LSTs, and SAL, users of all experience levels can benefit from a new set of strategies and financial products.

SOLV Airdrop on Binance Megadrop

Binance has announced Solv Protocol (SOLV) as the third project on the Binance Megadrop platform. The Megadrop is scheduled from January 7, 2025, 00:00 UTC to January 16, 2025, 23:59 UTC. Participants can earn SOLV token rewards by staking BNB in Locked Products or completing designated Web3 Quests. 

Following the Megadrop period, the SOLV token will be listed with the Seed Tag on January 17, 2025, at 10:00 UTC. The trading pairs include SOLV/USDT, SOLV/BNB, SOLV/FDUSD, and SOLV/TRY.

Closing Thoughts

Solv Protocol is a transformative platform that brings Bitcoin into the world of decentralized finance. By offering solutions like SolvBTC, Liquid Staking Tokens, and the Staking Abstraction Layer, the protocol enables Bitcoin holders to unlock new earning opportunities while contributing to the growth of blockchain ecosystems.

Further Reading

What Is Binance Megadrop and How to Use It? 

What Is a Crypto Wallet and How to Choose the Right One?

What Is Simon's Cat (CAT)?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Using exit strategies like stop-losses, take-profit targets, and trailing stops makes it easier for traders to manage risk and lock in profits without getting too emotional. 

Proper risk management and exit strategies are important for any trader who wants to stay disciplined and succeed in the long run, especially in the volatile crypto markets.

This article goes through five exit strategies for traders before discussing a few ways of combining different strategies.

Introduction

For traders, knowing when to exit a trade is as important as knowing when to enter. A well-planned exit strategy can help you protect profits, minimize losses, and reduce emotional decision-making. These are particularly useful during volatile market conditions.

In this article, we will go through five exit strategies for traders, including stop-loss orders, take-profit targets, trailing stops, dollar-cost averaging (DCA), and technical indicators. At the end, we will explore a few ways of combining different strategies.

1. Stop-Loss Orders

A stop-loss order automatically closes a trade when the price of an asset reaches a specific level. As the name suggests, stop loss orders are designed to limit potential losses in case the market moves against your positions. They are an essential tool for proper risk management.

How to use stop-loss orders

Percentage-based stops: Set a stop-loss at a specific percentage below your entry price. For example, if you buy Bitcoin at $40,000 and set a 5% stop-loss, your trade will close if BTC drops to $38,000.

Technical stop-loss: Place your stop-loss below a support level or a significant moving average. For instance, if BTC is trading above the 200-day moving average at $37,000, you might place your stop somewhere below $37,000.

Advantages

Provides a clear risk management plan.

Automates the exit process, reducing emotional involvement.

2. Take-Profit Targets

Take-profit orders are similar to stop-loss orders, but instead of cutting losses, they lock your profits. These orders are designed to automatically sell a position when the price reaches a certain profit level. Take-profit orders can help you secure gains without necessarily waiting for the "perfect" exit.

How to Set Take-Profit Targets

Risk-reward ratio: You can use a risk-reward ratio like 1:2, meaning for every dollar at risk, you aim to gain two dollars. If your stop-loss is $1,000 below your entry, you can set a take-profit $2,000 above.

Fibonacci levels: Another option is to apply Fibonacci retracement and extension tools to identify potential profit levels. For instance, the 1.618 fib extension level often acts as a key take-profit zone.

Advantages

Prevents greed-driven overtrading.

Helps achieve consistent profitability by focusing on predefined targets.

3. Trailing Stops

Trailing stops are stop-loss orders designed to move along with the price. The idea is to constantly update your stop-loss level to lock in profits as the price changes. For example, if you are long and the price falls by a specified percentage or dollar amount, trailing stops can help you exit the trade automatically.

How to use trailing stops

Set the trailing stop percentage or value. For instance, with a 5% trailing stop, if BTC moves from $40,000 to $50,000, your stop-loss adjusts to $47,500 (5% below $50,000). If it moves further to $60,000, your stop-loss adjusts to $57,000 (5% below $60,000).

Advantages

Allows participation in extended uptrends.

Minimizes losses during sudden market reversals.

4. Dollar-Cost Averaging (DCA) Out of Trades

DCA, commonly used for entering markets, can also be an interesting strategy for exiting positions gradually. Instead of selling all at once, you sell portions of your position at regular intervals or at different price points. This will average your exit price.

Example

Suppose you own 1 Bitcoin purchased at $20,000. During a bull run, BTC rises to $50,000. Instead of selling everything at $50,000, you sell 0.1 BTC at $50,000, another 0.1 BTC at $55,000, and so on. This reduces the risk of missing out on further gains while locking in some profits.

Advantages

Reduces the emotional impact of exiting too early or too late.

Smoothens profits over multiple price levels.

5. Technical Analysis Indicators

Some traders leverage technical analysis (TA) tools to define exits based on market signals rather than emotions. Some popular indicators include moving averages, RSI, and Parabolic SAR.

Moving averages

Example: If BTC's price crosses below its 50-day moving average, it could signal a bearish reversal. Exiting at this point helps avoid further losses.

Relative Strength Index (RSI)

Example: If Bitcoin's RSI rises above 70 (overbought), it may indicate a reversal. Exiting at this point locks in profits before a potential downturn.

Parabolic SAR (stop and reverse)

Example: The Parabolic SAR indicator plots points above or below the price. When the dots switch from below to above the price, it signals a potential exit point.

Advantages

Adapts to market conditions in real time.

Removes guesswork from decision-making.

Combining Strategies for Optimal Results

Each of these exit strategies has its merits, but they can be even more effective when combined. For example, you can use stop-loss orders alongside take-profit targets to define a clear range for your trade.

Alternatively, you may combine technical indicators with trailing stops to secure gains in trending markets. Or use technical indicators to define multiple price levels to DCA out.

For example, suppose you buy Bitcoin at $44,000:

Set a stop-loss at $42,000 to limit potential losses.

Place a take-profit order at $50,000 for partial profits.

Use a trailing stop to capture gains if BTC surges past $50,000.

If BTC hits $60,000 or more with an RSI of over 70, gradually DCA out to lock the remaining profits and reduce risks.

Closing Thoughts

Exit strategies are essential for successful trading, offering a structured approach to managing profits and losses. Whether you use stop-loss orders, take-profit targets, trailing stops, DCA, or technical indicators, having a clear plan will help you remain disciplined and adaptable.

Try experimenting with different combinations to find what works best for your trading style and objectives, and remember that long-term success comes from disciplined execution and risk management, not guesswork.

Further Reading

What Is Technical Analysis?

What Are Stop-Loss and Take-Profit Levels and How to Calculate Them?

Dollar-Cost Averaging (DCA) Explained

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

AI agents are self-operating programs that are able to analyze information, learn from their own experiences, and execute tasks on behalf of users.

AI agents differ from regular bots due to their increased capacity to operate and improve with little human intervention. AI agents are also able to interact with other agents and applications.

AI agents have various use cases. For example, they can help improve crypto by automating trades, managing risks, making NFTs more interactive, and simplifying blockchain, making Web3 easier to use.

Introduction

Artificial intelligence (AI) is transforming the way we live, work, and interact with technology. In the cryptocurrency space, AI agents represent a key innovation that is creating smarter systems that can be used in a variety of use cases, from trading to creating art.

What Are AI Agents?

We can think of AI agents as autonomous programs capable of making decisions, learning from their experiences, and taking action based on the tasks they’re given. For example, a good AI agent should be able to:

Manage a crypto investment portfolio.

Automate customer service by handling user queries.

Execute complex processes like smart contract audits or blockchain-based trades.

What makes these agents unique is their ability to continuously improve using machine learning. They’re designed to analyze data, predict outcomes, and adapt their behavior (all without a human hovering over them). Such properties make AI agents significantly different from regular bots.

How Do AI Agents Work?

At their core, AI agents rely on three main pillars:

Observation: They gather data from their environment. This could include real-time market data, user input, or blockchain transactions.

Processing: Using advanced algorithms and machine learning, AI agents can analyze a dataset and decide the best course of action. For example, a trading AI agent might use data to find potentially profitable entry points for crypto trades.

Action: They execute tasks based on their analysis, like buying crypto, sending a notification, or creating a digital asset.

These agents often incorporate natural language processing (NLP) to communicate with users in an intuitive way, making them more accessible to non-technical individuals. Large language models (LLMs) like GPT-4 enable them to understand and respond to complex queries, making blockchain and crypto feel less intimidating to newcomers.

AI Agents and Crypto

The cryptocurrency ecosystem thrives on automation, transparency, and decentralization—qualities that align perfectly with what AI agents bring to the table. Here’s how AI Agents are reshaping the blockchain industry:

1. Smarter DeFi tools

In decentralized finance (DeFi), managing trades, optimizing yields, or even understanding risk can be overwhelming. AI agents can handle these tasks more efficiently than humans. For instance:

Automated trading: AI-powered agents can monitor markets and execute trades in real time, capitalizing on opportunities far faster than a person could.

Risk management: They can assess potential vulnerabilities in a portfolio or smart contract, helping users avoid losses.

2. Generative art and NFTs

AI agents can also be used with NFTs (non-fungible tokens). They can create unique digital art pieces or intelligent NFTs (iNFTs) that interact with users. For example:

A collector could own an iNFT that evolves its personality based on interactions, making it not just a static image but an interactive experience.

Tools like Binance’s Bixel let users create AI-generated art and mint it directly on the blockchain.

3. Simplifying blockchain interactions

Blockchain technology can feel complex, especially for beginners. AI agents can simplify things by automating processes like crypto wallet management, transaction approvals, or even interacting with smart contracts. They can make crypto more approachable, which helps accelerate adoption.

AI agents can also act as delegates in decentralized autonomous organizations (DAOs), managing voting, proposing strategies, or automating operations based on the interests of token holders.

4. Making payments easier

Traditional systems like credit cards or payment processors aren’t well-suited for handling micropayments or frequent transactions. Cryptocurrencies solve this with low fees and fast transactions. 

AI agents can leverage crypto payment systems to enable pay-per-request models and seamless transfers:

Pay-per-request models: For example, an agent could pay small amounts to access real-time weather data or news on behalf of a user.

Seamless transfers: Agents can manage payments between parties instantly and without human intervention.

Challenges Faced by AI Agents in the Crypto Space

Of course, integrating AI into crypto isn’t all smooth sailing. There are still some major hurdles to overcome:

Scalability issues: Most blockchains weren’t designed for the rapid, real-time interactions required by AI agents. Although there are many scaling solutions in place, scaling these systems for seamless global use is still a work in progress.

Accuracy problems: AI agents aren’t perfect. Even small errors can lead to big problems, especially in tasks like trading or managing smart contracts. Developers are working on solutions like Retrieval-Augmented Generation (RAG) to reduce errors and make these systems more reliable.

Trust and transparency: Blockchain helps by creating transparent records of AI agent activity, but building decentralized trust systems for millions of autonomous agents remains a challenge. Data privacy, misuse, and the unintended consequences of AI agents require regulatory and ethical oversight.

The Future of AI Agents in Crypto

While we’re still in the early days, the potential of AI agents in blockchain is enormous. Here are a few possibilities that could shape the future:

Decentralized AI economies: Imagine a network of AI agents interacting with each other, each performing specialized tasks. Together, they could form a self-sustaining economy where agents trade services and manage resources autonomously.

Widespread Web3 adoption: By automating and simplifying blockchain interactions, AI agents could make Web3 technologies accessible to everyone, from tech enthusiasts to casual users.

Advanced DeFi applications: As AI tools improve, they might unlock new strategies for yield optimization, risk management, and even collaborative investing.

Closing Thoughts

By automating tasks, enabling smarter decision-making, and simplifying complex systems, AI agents are helping to push the boundaries of what’s possible in the digital economy. While challenges remain, the synergy between AI and blockchain has the potential to redefine industries far beyond cryptocurrency.

Further Reading

Top 5 Artificial Intelligence (AI) Cryptocurrencies

The Relationship Between Blockchain and AI

What Is NEAR Protocol (NEAR)?

Binance Research: Exploring the Future of AI Agents in Crypto

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Using exit strategies like stop-losses, take-profit targets, and trailing stops makes it easier for traders to manage risk and lock in profits without getting too emotional. 

Proper risk management and exit strategies are important for any trader who wants to stay disciplined and succeed in the long run, especially in the volatile crypto markets.

This article goes through five exit strategies for traders before discussing a few ways of combining different strategies.

Introduction

For traders, knowing when to exit a trade is as important as knowing when to enter. A well-planned exit strategy can help you protect profits, minimize losses, and reduce emotional decision-making. These are particularly useful during volatile market conditions.

In this article, we will go through five exit strategies for traders, including stop-loss orders, take-profit targets, trailing stops, dollar-cost averaging (DCA), and technical indicators. At the end, we will explore a few ways of combining different strategies.

1. Stop-Loss Orders

A stop-loss order automatically closes a trade when the price of an asset reaches a specific level. As the name suggests, stop loss orders are designed to limit potential losses in case the market moves against your positions. They are an essential tool for proper risk management.

How to use stop-loss orders

Percentage-based stops: Set a stop-loss at a specific percentage below your entry price. For example, if you buy Bitcoin at $40,000 and set a 5% stop-loss, your trade will close if BTC drops to $38,000.

Technical stop-loss: Place your stop-loss below a support level or a significant moving average. For instance, if BTC is trading above the 200-day moving average at $37,000, you might place your stop somewhere below $37,000.

Advantages

Provides a clear risk management plan.

Automates the exit process, reducing emotional involvement.

2. Take-Profit Targets

Take-profit orders are similar to stop-loss orders, but instead of cutting losses, they lock your profits. These orders are designed to automatically sell a position when the price reaches a certain profit level. Take-profit orders can help you secure gains without necessarily waiting for the "perfect" exit.

How to Set Take-Profit Targets

Risk-reward ratio: You can use a risk-reward ratio like 1:2, meaning for every dollar at risk, you aim to gain two dollars. If your stop-loss is $1,000 below your entry, you can set a take-profit $2,000 above.

Fibonacci levels: Another option is to apply Fibonacci retracement and extension tools to identify potential profit levels. For instance, the 1.618 fib extension level often acts as a key take-profit zone.

Advantages

Prevents greed-driven overtrading.

Helps achieve consistent profitability by focusing on predefined targets.

3. Trailing Stops

Trailing stops are stop-loss orders designed to move along with the price. The idea is to constantly update your stop-loss level to lock in profits as the price changes. For example, if you are long and the price falls by a specified percentage or dollar amount, trailing stops can help you exit the trade automatically.

How to use trailing stops

Set the trailing stop percentage or value. For instance, with a 5% trailing stop, if BTC moves from $40,000 to $50,000, your stop-loss adjusts to $47,500 (5% below $50,000). If it moves further to $60,000, your stop-loss adjusts to $57,000 (5% below $60,000).

Advantages

Allows participation in extended uptrends.

Minimizes losses during sudden market reversals.

4. Dollar-Cost Averaging (DCA) Out of Trades

DCA, commonly used for entering markets, can also be an interesting strategy for exiting positions gradually. Instead of selling all at once, you sell portions of your position at regular intervals or at different price points. This will average your exit price.

Example

Suppose you own 1 Bitcoin purchased at $20,000. During a bull run, BTC rises to $50,000. Instead of selling everything at $50,000, you sell 0.1 BTC at $50,000, another 0.1 BTC at $55,000, and so on. This reduces the risk of missing out on further gains while locking in some profits.

Advantages

Reduces the emotional impact of exiting too early or too late.

Smoothens profits over multiple price levels.

5. Technical Analysis Indicators

Some traders leverage technical analysis (TA) tools to define exits based on market signals rather than emotions. Some popular indicators include moving averages, RSI, and Parabolic SAR.

Moving averages

Example: If BTC's price crosses below its 50-day moving average, it could signal a bearish reversal. Exiting at this point helps avoid further losses.

Relative Strength Index (RSI)

Example: If Bitcoin's RSI rises above 70 (overbought), it may indicate a reversal. Exiting at this point locks in profits before a potential downturn.

Parabolic SAR (stop and reverse)

Example: The Parabolic SAR indicator plots points above or below the price. When the dots switch from below to above the price, it signals a potential exit point.

Advantages

Adapts to market conditions in real time.

Removes guesswork from decision-making.

Combining Strategies for Optimal Results

Each of these exit strategies has its merits, but they can be even more effective when combined. For example, you can use stop-loss orders alongside take-profit targets to define a clear range for your trade.

Alternatively, you may combine technical indicators with trailing stops to secure gains in trending markets. Or use technical indicators to define multiple price levels to DCA out.

For example, suppose you buy Bitcoin at $44,000:

Set a stop-loss at $42,000 to limit potential losses.

Place a take-profit order at $50,000 for partial profits.

Use a trailing stop to capture gains if BTC surges past $50,000.

If BTC hits $60,000 or more with an RSI of over 70, gradually DCA out to lock the remaining profits and reduce risks.

Closing Thoughts

Exit strategies are essential for successful trading, offering a structured approach to managing profits and losses. Whether you use stop-loss orders, take-profit targets, trailing stops, DCA, or technical indicators, having a clear plan will help you remain disciplined and adaptable.

Try experimenting with different combinations to find what works best for your trading style and objectives, and remember that long-term success comes from disciplined execution and risk management, not guesswork.

Further Reading

What Is Technical Analysis?

What Are Stop-Loss and Take-Profit Levels and How to Calculate Them?

Dollar-Cost Averaging (DCA) Explained

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

BFUSD is a special asset on Binance designed for Futures traders. It works as collateral for trades while offering daily USDT rewards.

By holding BFUSD, users can earn daily rewards in USDT, with additional rewards available for those actively trading USDⓈ-M Futures using BFUSD as collateral. These rewards are powered by Binance’s strategies like delta-neutral hedging and Ethereum staking.

To ensure stability during tough market conditions, a Reserve Fund—initially funded with 1 million USDT—supports BFUSD’s hedging mechanism, offering protection against negative funding rates.

What Is BFUSD?

BFUSD is a reward-earning asset designed exclusively for Binance Futures users. It’s a special tool that allows traders to earn extra rewards when using it as margin for futures trading. But what exactly is BFUSD and how does it work?

How Does BFUSD Work?

Binance Futures users can buy BFUSD to boost their trading power and earn passive income. In other words, when you buy BFUSD, you’re essentially converting your USDT into an asset that works as trading collateral while also generating rewards. 

Users can qualify for daily USDT rewards by simply holding BFUSD in their Binance USDⓈ-M Futures wallet. In addition, if they use BFUSD for futures trading, they can get even higher USDT rewards.

BFUSD Rewards

BFUSD rewards are based on Binance’s investment and hedging strategies, which consist mostly of delta hedging and ether (ETH) staking.

Delta hedging is a strategy that involves hedging ETH and other cryptocurrencies between the spot and futures markets. The idea is to collect funding fees by opening trading positions that offset each other and greatly reduce risks.

The ETH staking strategy involves using the funds collected from BFUSD sales to buy and stake ETH. The staking rewards are then used to fund the rewards given to BFUSD holders.

The Daily Reward Rates are calculated daily, but the exact rate varies depending on how much Binance earns from its hedging and staking activities.

Base Rate and Boosted Rate

Binance splits rewards into two categories:

Base Rate: USDT rewards for simply holding BFUSD in your Binance USDⓈ-M Futures wallet.

Boosted Rate: Higher reward rate for those who actively trade using BFUSD as collateral.

Reserve Fund

The BFUSD Reserve Fund is a special fund created by Binance to protect users from the potential impact of negative funding rates. The fund started with 1 million USDT, but it has grown over time as a portion of the income generated by Binance’s investment and hedging strategies are allocated to it.

How to Use BFUSD

BFUSD can be used as margin in Binance Futures markets, enabling traders to increase their leverage and trading power. You can start using BFUSD in a few simple steps:

Log in to your Binance account.

Navigate to the Futures page and find the BFUSD section.

Click [Buy] BFUSD, enter the amount of USDT you want to convert and click [Confirm].

Enable Multi-Asset Mode: This allows BFUSD to be used as margin in your trades.

Start earning: You can hold your BFUSD for passive earnings or boost your rewards by using BFUSD as margin when trading futures.

Redeeming BFUSD

If you decide you no longer want to hold BFUSD, you can redeem it back into USDT at a 1:1 ratio. Follow these steps to redeem your BFUSD:

Go to your Binance account, navigate to the Futures page, and find the BFUSD section.

Click [Redeem].

Enter the amount of BFUSD you want to convert and confirm.

Keep in mind, there are small fees for both buying and redeeming BFUSD. Also, in rare cases of high demand, Binance might delay redemptions for up to seven days.

Why Should You Use BFUSD?

Benefits for Traders

Earn passive rewards: You can earn USDT rewards every day by simply holding BFUSD in your Binance Futures wallet.

Boost your trading: By using BFUSD as margin, you can access more capital for your trades.

Flexibility: You can redeem BFUSD for USDT in just a few simple steps.

Protection from risks: Binance has set up a Reserve Fund to reduce risks and keep rewards relatively stable.

Things to Consider When Using BFUSD

While BFUSD is a great tool for futures traders, there are a few things to keep in mind:

Fees: Each time you buy or redeem BFUSD, there’s a small fee (usually 0.1%).

Market risk: Your rewards depend on market conditions. On bad days, you might earn less than expected.

Redemption delays: If lots of people try to redeem BFUSD at the same time, you might have to wait a few days for Binance to process it.

Closing Thoughts

BFUSD is a great tool for Binance Futures traders who want to maximize their trading potential while earning some extra income. It’s flexible, easy to use, and backed by solid investment strategies. Whether you’re a passive HODLer or an active trader, BFUSD can be a valuable addition to your trading toolkit.

That said, always keep an eye on fees, market risks, and Binance’s terms. If you’re ready to give BFUSD a try, head over to the Binance Futures section and start exploring its benefits today!

Further Reading

Your Guide to Binance Launchpad and Launchpool 

What Is a Stablecoin?

What Is Crypto Staking and How Does It Work? 

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

USDG is a stablecoin pegged to the US dollar at a 1:1 ratio. It’s issued by Paxos Digital Singapore and regulated by the Monetary Authority of Singapore.

As an ERC-20 token on the Ethereum blockchain, USDG supports fast transactions and is compatible with smart contracts and decentralized applications.

While promising, USDG still faces some challenges, such as limited adoption and competition from more established stablecoins.

Introduction

USDG, also called the Global Dollar, is a stablecoin backed by the US dollar. It’s designed to keep its value stable while being fast and easy to use for all kinds of financial transactions. USDG is issued by Paxos Digital Singapore Pte. Ltd., a company that’s regulated by the Monetary Authority of Singapore (MAS).

USDG Key Features

USDG has several features that make it an interesting stablecoin alternative:

Backed by real dollars. The value of USDG is pegged 1:1 to the US dollar, meaning one USDG is designed to mirror the value of one US dollar. To keep this balance, every USDG token is backed by reserves of cash or cash equivalents.

Regulated and compliant. USDG is fully compliant with Singapore’s stablecoin regulations. According to Paxos, MAS ensures that USDG meets high standards for reserve backing and operational security. Paxos also adheres to New York’s banking laws, making USDG a highly regulated stablecoin.

Technology integration. USDG is built on the Ethereum blockchain as an ERC-20 token, which means it’s compatible with smart contracts and decentralized applications (DApps). This makes USDG not just a currency but also a tool for developers to create new financial products. It’s also set to expand to other blockchain networks approved by MAS, increasing its versatility.

Fast payments. Traditional banking can take days to settle transactions, especially for international transfers. With USDG, payments are processed in minutes. This makes it ideal for cross-border payments, peer-to-peer (P2P) transactions, and decentralized finance (DeFi) applications.

How Does USDG Work?

The Global Dollar Network

The Global Dollar Network is the backbone of USDG’s adoption. It’s an ecosystem designed to make it easier for businesses, developers, and institutions to integrate USDG into their platforms. As of December 2024, the network is in an invite-only phase.

USDG use cases

Payments and settlements: USDG provides fast and affordable international payments. Instead of waiting days for traditional bank transfers, you can settle transactions in a few minutes. It’s a great option for anyone dealing with cross-border payments.

Institutional benefits: Institutions gain access to efficient trading, peer-to-peer settlements, and rewards for certain deposits. USDG is also accessible to developers seeking to create decentralized financial solutions​.

Ecosystem development: The Global Dollar Network aims to incentivize enterprises to adopt USDG by offering better revenue-sharing opportunities compared to traditional stablecoin models​.

Issuing and redeeming USDG

The Global Dollar Network offers a flexible process for USDG redemption, allowing users to convert USDG for US dollars on a 1:1 basis at any time. Upon redemption, USDG tokens are immediately removed from the supply.

Blockchain technology

Since USDG is built on Ethereum, it benefits from blockchain’s transparency and security. Each transaction is recorded on the blockchain, making it easy to follow and verify. The transactions are managed by smart contracts, so there’s no need for intermediaries.

Potential Challenges for USDG

While USDG has a lot of promising features, it’s important to recognize that it’s still in its early stages. Here are a few challenges and potential downsides that come with the project:

Small market cap

Compared to established stablecoins like USDT (Tether) or USDC, USDG’s market cap is still relatively small. A smaller market cap means it doesn’t have the same level of liquidity. For big players or traders needing large amounts for transactions, this might be a dealbreaker, at least for now.

Limited adoption

As a new player in the stablecoin space, USDG hasn’t reached a lot of users yet. It might take some time until a larger number of businesses and developers adopt it. Until adoption grows, its utility in mainstream applications may remain limited​.

Regulatory uncertainty in broader markets

While USDG is compliant with Singapore’s MAS regulations and other strict jurisdictions, the global regulatory landscape for stablecoins is still evolving. Expansion into regions with unclear or restrictive rules could present a new set of challenges, potentially slowing its growth.

Competition from established players

Big players like USDT, USDC, and even DAI have been around for years and dominate the space. USDG will need to work hard to stand out, especially since those coins already have strong user bases.

Dependence on Ethereum

As of now, USDG primarily operates on the Ethereum blockchain as an ERC-20 token. While Ethereum is widely used, its network can experience congestion and high transaction fees during periods of heavy activity. This could make USDG less appealing compared to stablecoins operating on more scalable networks.

Closing Thoughts

USDG is an interesting stablecoin project aimed at making digital finance more accessible, trustworthy, and innovative. Whether you’re a business owner, a developer, or just someone who wants an easier way to make payments, USDG has something to offer. 

While the project seems promising, we are yet to see if it will manage to compete with other established stablecoins to achieve widespread adoption and a higher market cap.

Further Reading

What Is a Stablecoin?

What Is BFUSD?

What Is First Digital USD (FDUSD)?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

The Movement Project builds on Ethereum to offer faster, more efficient transactions and advanced security through its MoveVM and Move programming language.

Developers can use Move Rollups to create tailored Layer 2 solutions for various applications like DeFi, gaming, and supply chains.

The MOVE token has multiple use cases, including staking, governance, and cross-chain liquidity.

In December 2024, Binance offered an exclusive MOVE token airdrop as part of Binance’s HODLer Airdrops program.

What Is the Movement Project?

Movement is a blockchain platform that builds on Ethereum’s foundation while adding its own innovations. It’s what’s called a Layer 2 (L2) solution, meaning it operates on top of Ethereum to process transactions faster and more efficiently.

At its core, the Movement Project aims to address challenges related to scalability, transaction speed, interoperability, and security vulnerabilities. The Move programming language was originally developed by Meta (formerly Facebook) for its Diem/Libra blockchain project. 

Move is known for its resource-oriented programming, which enhances security and efficiency in blockchain application development.

Key Features of the Movement Project

Interoperability

Movement connects MoveVM and Ethereum ecosystems, enabling developers to build DApps that operate across multiple blockchains. This composability is a game-changer for blockchain developers.

Security

Move is built with security in mind. It uses formal verification, a rigorous mathematical process that ensures smart contracts behave as intended. This approach reduces common vulnerabilities, like reentrancy attacks or accidental token duplication.

Speed and finality

One of the biggest pain points in blockchain today is waiting for transactions to be finalized. Movement's fast-finality system ensures transactions are confirmed in seconds. This is a massive improvement over traditional systems, where users might wait several minutes or even hours, depending on the type of rollup.

How the Movement Project Works

The Movement Project is built around a few key components:

MoveVM: A virtual machine that supports both Move and Ethereum-compatible code execution.

Decentralized Shared Sequencer (DSS): Ensures fair and censorship-resistant transaction processing.

Move Rollups: App-specific L2 solutions that enable developers to customize transaction settlement, data availability, and more.

MoveVM: the execution core

At the heart of the Movement Project is the MoveVM, a virtual machine that powers the execution of transactions. Unlike many blockchain systems that focus on one type of application or programming environment, the MoveVM is dual-compatible. It works with both:

Move Bytecode: For developers who want to use the cutting-edge features of the Move programming language.

Ethereum Virtual Machine (EVM) Bytecode: This ensures that existing Ethereum-based applications can be easily ported to the Movement ecosystem.

This means developers don’t have to choose between Move and Ethereum. They can use both simultaneously, building applications that take advantage of Ethereum’s large ecosystem while leveraging the advanced security and efficiency of the Move programming language.

Decentralized Shared Sequencer (DSS)

The DSS is like the traffic controller of the Movement ecosystem. It ensures that transactions are processed fairly, quickly, and without censorship. Some of its key benefits include:

Censorship resistance: No single entity can block or prioritize transactions.

Fairness: Protects users from front-running attacks, where someone jumps ahead in the transaction queue to gain an unfair advantage.

Interoperability: Enables seamless cross-chain operations within the Movement ecosystem.

DSS plays an important role in uniting Move-based and Ethereum-based networks, allowing liquidity and assets to flow across chains.

Move Rollups: custom L2 chains

Movement introduces a flexible architecture called Move Rollups, which are L2 solutions tailored for specific applications, such as DeFi, gaming, and supply chains. For example:

Developers can select from different settlement mechanisms like optimistic rollups, ZK-rollups, or Movement’s fast-finality system.

They can choose their preferred data availability services, such as Celestia or Ethereum's EIP-4844 blobs, to ensure their chains operate efficiently.

This modular approach means that whether you're building a DeFi app, a blockchain game, or a supply chain solution, you can tailor your blockchain setup to fit your needs.

The MOVE Token Use Cases

Staking: MOVE tokens can be staked to help secure the network and support decentralized transaction processing through the Decentralized Shared Sequencer (DSS).

Transaction fees: MOVE tokens can be used to pay transaction and smart contract execution fees within the Movement ecosystem.

Governance: MOVE holders can vote on proposals for protocol upgrades, operational changes, and community fund allocations.

Cross-chain liquidity: Facilitates asset transfers between Move-based and Ethereum-based chains, offering more interoperability.

Move Arena participation: MOVE can be used for staking and providing liquidity in the Move Arena, which supports application-specific chains.

Incentives and rewards: Distributed as rewards for developers and users through programs like Binance’s HODLer Airdrops.

Economic security: MOVE, alongside other tokens, is used in the multi-asset staking model to increase network security.

MOVE Airdrop on Binance

The MOVE token is a central part of the Movement project and ecosystem. In December 2024, Binance announced an exclusive MOVE airdrop for BNB HODLers. The airdrop was done through the Binance Airdrop Portal and part of Binance’s HODLer Airdrops program.

Eligibility: Binance users needed to stake their BNB in Simple Earn products. Historical snapshots of balances were used to calculate rewards.

Rewards: BNB holders received free MOVE tokens, which were distributed directly to their Spot Wallets.

Trading launch: MOVE was listed on Binance on December 9, 2024, with multiple trading pairs, such as MOVE/USDT, MOVE/BTC, and MOVE/BNB.

Closing Thoughts

The Movement Project is all about making blockchain faster, more secure, and easier to use. With tools like the Move programming language, MoveVM, and a decentralized sequencer, it connects Ethereum and Move ecosystems, giving developers many options to build cool apps.

Further Reading

What Are Modular Blockchains?

Optimistic vs. Zero-Knowledge Rollups: What’s the Difference? 

What Are Bitcoin Layer 2 Networks?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

Magic Eden is a marketplace for non-fungible tokens (NFTs) that supports multiple blockchains, including Solana, Ethereum, Polygon, and Bitcoin.

The Magic Eden platform offers a Launchpad for new NFT projects and customizable royalties, making it easier for creators to mint and monetize their work.

The ME token is an important part of the Magic Eden ecosystem. It can be used for governance, trading fee discounts, access to exclusive collections, and more.

In December 2024, Magic Eden announced a large airdrop to active users. In this article, we will go through the details of the airdrop, show you how to check if your wallet is eligible, and how to claim your ME tokens.

What Is Magic Eden?

Magic Eden, often called ME, is a marketplace where you can buy, sell, and even launch NFTs (non-fungible tokens). It started out on the Solana blockchain but has expanded to include Ethereum, Polygon, and Bitcoin. This move to support multiple blockchains makes it easier for a wider range of creators and collectors to get involved while keeping things simple and user-friendly.

What Can You Do on Magic Eden?

Magic Eden is essentially a hub for all things NFT. It’s built to be fast, cost-effective, and easy to navigate. Let’s take a closer look at its major offerings.

Launchpad for new NFT projects

The Launchpad feature is designed for creators who want to mint and promote their NFT projects. It simplifies the process, helping creators reach more people and connect with collectors.

A marketplace for trading

If you’re looking to buy or sell NFTs, Magic Eden has you covered. It’s built to make trading straightforward, whether you’re new to NFTs or a seasoned collector.

Customizable royalties

For creators, Magic Eden lets you set up royalties, which is essentially a percentage you earn every time your NFT is resold. This ensures you keep earning from your work over time.

Multichain compatibility

Magic Eden supports NFTs across multiple blockchains, including Solana, Ethereum, Polygon, and Bitcoin. This means users aren’t limited to a single blockchain and can explore a wider variety of projects.

How Does Magic Eden Work?

Magic Eden leverages the underlying blockchain technology of Solana and other chains to facilitate quick, low-cost transactions. Users interact with the marketplace via crypto wallets, such as Trust Wallet or Phantom. Whether minting a new NFT, purchasing an existing one, or trading across collections, Magic Eden offers an easy and simple way to do it.

The ME Token

Magic Eden’s native cryptocurrency, the ME token, has various use cases within the ecosystem:

Governance: Holders of ME tokens can participate in decisions regarding platform updates or community policies.

Utility: The token can be used for trading fee discounts and exclusive access to specific features or NFT collections.

Rewards: Magic Eden distributes ME tokens as incentives for platform activity, such as trading or campaign engagement.

According to the official channels, ME tokenomics are designed to reward active participation while saving resources for community initiatives and partnerships. The idea is to create a sustainable ecosystem for users and contributors.

Binance listing

On December 10, 2024, Binance listed Magic Eden (ME) with the Seed Tag applied. Binance applies the Seed Tag to projects that are relatively new and may present higher volatility risks when compared to other listed assets. At launch, the spot trading pairs available were ME/BTC, ME/USDT, ME/FDUSD, and ME/TRY.

Magic Eden (ME) Airdrop

Magic Eden has introduced an airdrop campaign to reward its active community members with ME tokens.

The airdrop is designed to distribute ME tokens to users who have contributed to the platform through activities like NFT trading, NFT launchpad minting, cross-chain token swaps, and Runes trading.

Eligible users were defined based on their interaction history with Magic Eden, with higher rewards for those who have been actively involved in the marketplace.

The airdrop is part of Magic Eden's strategy to strengthen its ecosystem. By rewarding active users, their goal is to build loyalty while increasing the adoption of the ME token as a utility and governance asset.

Magic Eden airdrop details

Claim window: December 10, 2024, at 2:00 PM (UTC) to February 1, 2025, at 11:00 PM (UTC).

Official contract address: MEFNBXixkEbait3xn9bkm8WsJzXtVsaJEn4c8Sam21u (Solscan)

Claim page: mefoundation.com. Be careful with fake websites and scams. Make sure to only visit the official pages.

How to claim the Magic Eden airdrop?

To check your eligibility and claim your airdrop, you have to connect all of your eligible wallets to the official page before finishing the process on the Magic Eden mobile app.

If you don’t have the Magic Eden app, you have to download, install it, and import the crypto wallet you used on the Magic Eden platform. If you already have the app, follow these steps:

Go to mefoundation.com and click the [Claim $ME] button. 

Next, click [Check Eligibility].

Scan the QR code using your Magic Eden app and connect your eligible wallets. You can connect multiple wallets.

Check the terms and conditions. If you agree and are not from a restricted country, check the box to continue.

On the next screen, you can link multiple wallets to check which ones are eligible for the airdrop.

The final step is to claim your airdrop using the Magic Eden app, which is available for iOS and Android. You will need some SOL in your wallet to pay for gas fees when claiming your airdrop.

Closing Thoughts

Magic Eden is a user-friendly NFT marketplace that supports multiple blockchains like Solana, Ethereum, Polygon, and Bitcoin. It offers features like a Launchpad for new projects, easy trading, customizable royalties, and the ME token for governance and rewards. The platform aims to make NFT buying, selling, and launching simple and accessible for everyone.

Further Reading

How to Set Up a Crypto Wallet

What Is Solana (SOL)?

What Is An NFT?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

Vana is a blockchain project that puts you in charge of your personal data, allowing you to decide how it’s used while keeping it safe and private.

Users can get token rewards when sharing their data to help train AI models. Vana uses a data liquidity pool that rewards users in proportion to their contribution.

Vana started as an MIT research project in 2018. The platform is fully open source and functions as a decentralized, permissionless network.

VANA tokens were launched through Binance Launchpool, with 4.8 million tokens available as rewards to Binance users.

Introduction

Vana is a blockchain project that lets users take back control of their digital data while still allowing their data to be used to train artificial intelligence (AI) models. In a nutshell, Vana focuses on keeping user data private, secure, and fairly rewarded.

What Is Vana?

Vana is a decentralized platform that changes the way data is used. Right now, big tech companies gather and use your data for free while they make money from it. Vana is working to change this reality. It allows individuals like you to own and control your data while sharing it in a way that’s safe and rewarding.

Instead of one company owning everything, Vana wants to build a user-centered AI ecosystem. With Vana, your data can help improve AI models, but you’ll stay in control, keep your privacy, and get rewarded for sharing it.

Vana Key Features

Vana addresses some of the biggest challenges in today’s data economy:

Data ownership: Users can regain control over their personal information.

Privacy: Secure technologies ensure data remains private and protected.

Fair compensation: Users are rewarded for the value their data generates.

Democratic AI: AI models are collectively developed and owned by the Vana community.

Open infrastructure: The Vana platform is open source and functions as a decentralized, permissionless network.

How Does Vana Work?

Vana uses smart technology to let people share their data safely while staying in control.

1. You own your data

With Vana, you’re in charge of your data. Instead of storing it on servers owned by companies, you can store it in your own personal servers or secure environments. You decide how and when your data is shared.

2. Data Liquidity Pools (DLPs)

Vana introduces something called Data Liquidity Pools (DLPs). These innovative pools let people group their data together so it can be used to train AI models. The more diverse the data, the better the AI. DLPs ensure that you still own your data, so no one can use it without your permission.

3. Privacy and security

Vana uses advanced privacy tools, like secure enclaves and cryptographic proofs, to keep your data safe. These tools ensure that even when your data is used for AI training, no one can see or misuse it without your consent.

4. Tokenized data rights

When you share your data through Vana, you’re rewarded with tokens. These tokens track your contributions and ensure you’re fairly compensated when your data is used to improve AI, creating an incentive for participation.

5. Collective ownership of AI models

Another interesting feature of Vana is that AI models trained using your data are collectively owned. Instead of a company profiting alone, everyone who contributed their data can enjoy the benefits. This approach can promote a more democratic AI economy.

6. Open infrastructure

The platform is fully open source and functions as a decentralized, permissionless network, ensuring accessibility for everyone. According to Vana’s official website, the so-called Open Data Foundation plays a key role in promoting the widespread adoption of the Vana protocol, while Corsali and other organizations contribute by advancing research and technical development.

Vana’s Launch on Binance Launchpool

On December 13, 2024, Binance announced Vana as the 62nd project on the Binance Launchpool platform. This launch marks a major milestone for Vana, offering new opportunities for users to engage with the project.

A total of 4,800,000 VANA tokens (4% of VANA’s maximum supply) were available as Launchpool farming rewards. Binance listed VANA for trading on December 16, 2024. The first available pairs included VANA/USDT, VANA/BNB, VANA/FDUSD, and VANA/TRY.

Closing Thoughts

Vana is a promising project that is focused on giving users more control over their data. Vana allows users to earn rewards while using their data in more secure and fair ways. By letting users contribute their data to train AI models, Vana is helping create a more inclusive and decentralized AI ecosystem.

Further Reading

Your Guide to Binance Launchpad and Launchpool 

Your Guide to Binance Spot Trading 

Top 5 Artificial Intelligence (AI) Cryptocurrencies

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

Pudgy Penguins started as a collection of 8,888 unique NFTs but later evolved into a broad Web3 ecosystem with real-world merchandise, business ventures, and a cryptocurrency called the PENGU token.

PENGU’s launch included a major airdrop to both holders and non-holders of Pudgy Penguins NFTs, with millions of tokens distributed to the community.

The PENGU airdrop started on December 17, 2024. Eligible wallets have until March 15, 2025, to claim their tokens.

In addition to the PENGU airdrop, the Binance HODLer Airdrop program also rewarded BNB holders with PENGU tokens. Users who kept their BNB on Binance Simple Earn during the promotion period received the Binance HODLer airdrop automatically.

Introduction

Pudgy Penguins is a well-known NFT (non-fungible token) project that started with a digital collection of cute, cartoon-like penguins. Over time, it has grown into a broader ecosystem that includes real-world applications, business ventures, and a new cryptocurrency called the PENGU token.

The Pudgy Penguins NFT Collection

At its core, Pudgy Penguins is a collection of 8,888 unique NFTs launched on the Ethereum blockchain in July 2021. Each NFT features a cartoon penguin with different traits like colors, accessories, and backgrounds. Some traits are rarer than others, making certain penguins more sought after by collectors.

The collection gained attention quickly, largely because of its fun design and the sense of community it built around its holders.

Source: https://pudgypenguins.com

Pudgy Penguins in the Real World

The team behind Pudgy Penguins has expanded the project beyond digital collectibles. They’ve found ways to bring these cartoon penguins into everyday life and use them as the foundation for a business.

Merchandise

Pudgy Penguins released physical products, like plush toys and clothing, based on their penguin designs. These items appeal to fans of the project and helped introduce the brand to a broader audience outside the crypto space.

Licensing opportunities

If you own a Pudgy Penguin NFT, you also own the intellectual property (IP) rights to that specific penguin. This means you can use it for your own projects, like printing it on merchandise, using it in marketing, or even building a business around it.

Community events

The project organizes events where holders can meet in person. These gatherings help strengthen the community and give members a chance to connect on a personal level.

Business model

The Pudgy Penguins project earns money through multiple streams, including:

NFT sales: When the collection first launched, buyers paid to mint the NFTs, generating revenue for the team.

Royalties: Every time a Pudgy Penguin NFT is resold on a secondary marketplace, the team earns a percentage of the sale.

Merchandise sales: Selling physical products like toys and apparel creates another source of income.

Partnerships: Collaborating with other companies and brands can also bring in revenue while increasing the project’s visibility.

What Is the PENGU Token?

In 2024, Pudgy Penguins introduced the PENGU token, its own cryptocurrency. The token is designed to add more functionality to the ecosystem and give holders new ways to interact with the project.

PENGU is an ERC-20 token built on the Ethereum blockchain. It works alongside the Pudgy Penguins NFTs to offer additional benefits and opportunities for holders.

PENGU Airdrop

In December 2024, Pudgy Penguins launched a big airdrop to distribute PENGU tokens to the community. The list of eligible wallets included holders of the Pudgy Penguins and Lil Penguins NFT collections as well as non-holder wallets that were previously involved with the NFT space.

How to Claim Your PENGU Airdrop

Source: https://claim.pudgypenguins.com

Go to https://claim.pudgypenguins.com/. Make sure you are visiting the correct website. The claim page will be live until March 15, 2025. Unclaimed tokens will be locked in the smart contract forever.

Link your Ethereum or Solana wallet to check if it’s eligible for the PENGU airdrop.

Double-check the URL and approve the connection to your wallet.

Sign the request to prove ownership of your wallet address.

You should now see the total PENGU claimable for the wallet you connected. You can connect multiple wallets to check for eligibility.

Next, you can choose to create an account name or simply skip to claim.

Regardless if you are using an Ethereum wallet or a Solana wallet, you will be asked to provide a Solana wallet to receive the PENGU tokens.

PENGU on the Binance HODLer Airdrop

PENGU was also part of the Binance HODLer Airdrop program, which rewards BNB holders with tokens based on snapshots of their BNB balances. The airdrops are automatically given to those who subscribe BNB to Simple Earn.

The HODLer Airdrop program distributed PENGU to users who subscribed their BNB to Simple Earn products from December 9 to 12, 2024. PENGU was listed for trading on December 17, 2024, with the Seed Tag applied.

Closing Thoughts

Pudgy Penguins started as a simple NFT collection but has grown into something much bigger. It’s a mix of digital collectibles, real-world products, and cryptocurrency, all tied together by a strong community. Pudgy Penguins shows how digital ownership can be combined with real-world applications to create something unique.

Further Reading

Your Guide to Binance Launchpad and Launchpool 

Your Guide to Binance Spot Trading 

Top 5 Artificial Intelligence (AI) Cryptocurrencies

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

Simon’s Cat is a popular book and animated series created by Simon Tofield that features a funny cat.

The Simon’s Cat brand has grown beyond its animation roots, branching out into mobile games, merchandise, and now the crypto space with the launch of its CAT token.

The CAT token blends Simon's Cat's humor and charm with Web3, offering fans interactive and fun blockchain experiences. 

CAT is officially recognized by the Banijay Group, the company that owns the Simon’s Cat intellectual property.

The Simon's Cat Series

Simon’s Cat is a popular book and animated series created by British animator Simon Tofield that shows the funny and troublesome behavior of a fat (and often hungry) cat.

Since its debut in 2008, the series has garnered over 1.6 billion views on YouTube and more than 25 million followers across various social media platforms.

In 2024, the brand expanded into the cryptocurrency space by launching the CAT token, aiming to combine entertainment with blockchain technology and introduce Web3 opportunities to its fanbase.

What Is the Simon's Cat Token (CAT)?

Inspired by the series, the Simon’s Cat Token (CAT) token was launched in August 2024. According to their whitepaper, the CAT project represents the seamless integration of the Simon’s Cat intellectual property (IP) into the Web3 world.

The CAT project secured $6.85 million in funding through two sales: a private sale raising $2.6 million at $0.00222 per 1000 tokens and a public sale that brought in $4.25 million at $0.00278 per 1000 tokens.

CAT was initially launched on the BNB Smart Chain (BSC) and later made available on the Solana blockchain as well. As of December 2024, CAT’s total supply is roughly 8.1 trillion tokens, with a circulating supply of approximately 6.75 trillion.

CAT and 1000CAT: what’s the difference?

Since CAT’s token supply is high, Binance adopted 1000CAT as a separate version of the original CAT token. As the name suggests, a single 1000CAT token represents 1,000 CAT tokens. So, if CAT’s trading price is around $0.000038, 1000CAT should be trading around $0.038.

Simon’s Cat Mission

Hybrid integration

CAT combines the familiarity of Web2 with the innovation of Web3 to offer a user-friendly experience for fans at all levels of blockchain proficiency, from beginners to advanced users.

Community-driven engagement

One of the core goals of the CAT project is to provide Simon’s Cat’s large audience with exclusive events, interactive content, and unique opportunities to connect with the brand and Web3 community.

Global accessibility

Another mission of the project is to leverage popular blockchain platforms like BNB Chain and Solana to maximize trading liquidity and accessibility for fans worldwide.

Social responsibility

Staying true to Simon’s Cat’s values, CAT uses a percentage of its token supply to actively support animal welfare through strategic partnerships and charitable initiatives.

Simon’s Cat Key Products

1. Animated series with millions of followers and more than 4 billion views across social media platforms like Instagram, YouTube, and Facebook.

2. Mobile games with millions of downloads on Google Play and Apple Store:

Telegram Mini-App: Interactive quest game.

Crunch Time: A match-3 puzzle game.

Pop Time: A fun bubble shooter game with Simon’s Cat humor.

Story Time: A narrative-driven puzzle game.

3. Books and merchandise:

Branded collaborations with Primark and other retail companies.

Bestselling books include "Simon’s Cat in His Very Own Book" and "Simon’s Cat vs. the World."

4. Digital content: In addition to the series, the brand also works on comics and interactive content to keep fans engaged.

1000CAT on the Binance HODLer Airdrop

CAT was also part of the Binance HODLer Airdrop program, which rewards BNB holders with tokens based on snapshots of their BNB balances. The airdrops are automatically given to those who subscribe BNB to Simple Earn.

The HODLer Airdrop program distributed 1000CAT tokens to users who subscribed their BNB to Simple Earn products from December 9 to 12, 2024. 1000CAT was listed for trading on December 17, 2024, with the Seed Tag applied.

Closing Thoughts

Simon’s Cat has grown way beyond its animation roots, branching out into mobile games, merchandise, and now the crypto space with the CAT token. The brand’s business model uses Simon’s Cat’s popular IP to bring together the physical and digital worlds in an interesting way.

By combining Web2 and Web3 experiences, the CAT project keeps the fun spirit of Simon’s Cat alive while offering new engagement opportunities for fans worldwide. The roadmap also highlights real-world initiatives, such as community events and charity campaigns.

Further Reading

Your Guide to Binance Launchpad and Launchpool 

What Are Pudgy Penguins (PENGU)?

What Is a Crypto Wallet and How to Choose the Right One?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Disclaimer: This article is for educational purposes only. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

Key Takeaways

BIO is a curation and liquidity protocol dedicated to advancing Decentralized Science (DeSci). 

Its mission is to accelerate biotechnology by giving patients, scientists, and biotech professionals the ability to collectively fund, develop, and own tokenized biotech projects and intellectual property (IP).

The BIO token serves as a utility and governance tool, enabling holders to support DAOs, vote on key decisions, and fund network growth. Holders may also get access to rewards, early funding, and new products.

What Is BIO?

BIO is a curation and liquidity protocol dedicated to advancing Decentralized Science (DeSci). Its mission is to accelerate biotechnology by empowering patients, scientists, and biotech professionals worldwide with the ability to collectively fund, develop, and own tokenized biotech projects and intellectual property (IP).

The BIO team includes professionals who helped create Molecule and VitaDAO. Molecule is a tokenization platform for biomedicine projects, and VitaDAO is a decentralized community focused on longevity science.

What Is BIO Trying to Solve?

Traditional biotech research often faces challenges like high costs, slow funding processes, and limited access to intellectual property for smaller players. BIO’s approach is to break down these barriers using blockchain. 

The Bioconomy

Their vision, dubbed the “Bioconomy,” is all about creating a community-driven ecosystem where innovation can thrive without being bottlenecked by outdated systems.

By decentralizing the way biotech projects are funded and developed, BIO wants to make it easier for new ideas to gain traction. Instead of relying on a few big players, they’re empowering a global network of people to pool resources, vote on promising projects, and share ownership of the resulting breakthroughs.

The BIO Protocol

At its core, the BIO project runs on the BIO Protocol, a framework that lays out the structure for decentralized biotech development. Some of its key components include:

BioDAOs: These are decentralized organizations that focus on specific areas of biotech. Think of them as specialized communities working on projects like gene editing, cancer research, or vaccine development. Members of a bioDAO pool their resources, make collective decisions, and share in the outcomes.

Curation: With so many projects out there, deciding which ones to prioritize can be tricky. That’s where BIO’s curation mechanism comes in. Community members vote to determine which projects have the most potential, ensuring resources are used wisely.

Bio/Acc Rewards: To keep the community active and engaged, BIO offers rewards through its Bio/Acc Rewards program. Whether you’re contributing expertise, funding, or ideas, you can earn tokens based on your contribution.

IP tokens: One of BIO’s standout features is the tokenization of intellectual property. Instead of biotech breakthroughs being locked up in corporate vaults, IP is turned into digital tokens. These tokens allow for fractional ownership, meaning more people can invest in and benefit from scientific advancements.

Ecosystem and Governance

By bringing together stakeholders from across the biotech spectrum (researchers, investors, and patients), BIO creates a space where everyone has a voice. Governance is decentralized, with token holders having a say in the project’s direction. This model ensures transparency and keeps decision-making aligned with the community’s interests.

BIO Token

Essentially, the BIO token acts as both a utility and a governance tool within the BIO ecosystem. For example, BIO holders can show support for specific bioDAOs, vote on decisions about how new BIO tokens are created or distributed, and help fund programs to grow and improve the network. 

BIO holders can also gain access to governance rights, early funding rounds, financial rewards for health data contributions and clinical trial participation, and new products funded by bioDAOs.

BIO Launchpad

BIO's Launchpad is a platform designed to facilitate the initiation and funding of new biotech projects. It provides tools and resources for project teams to launch their initiatives within the BIO ecosystem, connecting them with a community of supporters and potential collaborators.

BioDAO Incubator

To support the development of new bioDAOs, BIO offers an incubator program that provides guidance, resources, and a structured framework for emerging decentralized organizations. The goal is to foster innovation and ensure the successful launch and growth of bioDAOs within the BIO ecosystem.

Closing Thoughts

The BIO project offers a more open and collaborative approach to biotech research. Instead of being locked into traditional structures where only a few major players have control, BIO provides a way for diverse communities to come together and drive progress.

By tokenizing intellectual property and using decentralized governance, BIO opens up opportunities for innovation that might otherwise be overlooked. For researchers, it’s a chance to access funding more quickly and equitably. For patients and advocates, it’s a way to directly support the breakthroughs that matter to them.

Further Reading

Binance Beginner's Guide 

Your Guide to Binance Launchpad and Launchpool 

What Is a Crypto Wallet and How to Choose the Right One?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

CoW DAO is a DeFi project that aims to enhance user experience and safety. It has three main tools: CoW Protocol, MEV Blocker, and CoW AMM.

CoW Protocol is a trading tool that provides efficient pricing mechanisms and protection against unfavorable trading setups.

MEV Blockers is a transaction protection tool that helps users avoid frontrunning and sandwich attacks.

The CoW AMM is an automated market maker that adopts a new model to protect liquidity providers from price exploitation.

What Is CoW DAO?

CoW DAO is focused on creating products on Ethereum that can enhance the safety and trading experience of Web3 users. The project features three main tools: CoW Protocol, MEV Blocker, and CoW AMM. They also offer development support, grants, and other resources for these projects.

CoW Protocol: A trading tool that uses group-based trades to find the best prices and improve liquidity.

MEV Blocker: A transaction protection tool that prevents attacks on trades while offering rebates to users.

CoW AMM: An automated market maker (AMM) that protects liquidity providers from price exploitation.

CoW DAO adopts a decentralized model of governance that allows community members to control the protocol’s development.

CoW Protocol

Intent to trade

When trading with the CoW Protocol, instead of placing a trade directly, you sign an “intent to trade.” This intent describes what and how much you want to trade, and solvers then find the best way to fulfill it.

Financial benefits

Solvers try to get you the best prices by matching peer-to-peer trades (called Coincidence of Wants) or finding off-chain deals. This method cuts fees and avoids price manipulation while offering protection from MEV (Maximal Extractable Value) attacks.

Technical benefits

The protocol supports batch auctions, letting users submit multiple trades and even pay gas fees in tokens other than ETH. It also eliminates fees for failed transactions.

Solvers and Batch auctions

Solvers compete to process your trade intents in batches, aiming to get you the best deal. Batch auctions offer protection from manipulation and allow for uniform pricing across trades. This system prevents bots from exploiting the order of transactions and supports peer-to-peer trade matches, reducing costs and improving trade efficiency.

Order processing

The CoW Protocol processes orders in four major steps:

Intent submission: Instead of placing an order directly, users submit a signed "intent to trade" with details on assets and amounts.

Batching: CoW Protocol groups multiple trade intents into a batch.

Solver competition: Solvers have a short time to propose solutions, aiming to get users the best prices. The solver with the best offer wins.

Execution: The winning solver executes the trades, and users receive their tokens.

This method is designed to reduce fees, improve prices, and offer MEV protection.

Order types

As of November 2024, CoW offers six order types: market orders, limit orders, TWAP orders, Programmatic orders, Milkman orders, and CoW Hooks.

1. Market orders

Aim to buy or sell immediately at the current price.

Solvers must fulfill the entire order or wait for liquidity.

Users set a slippage tolerance to account for price changes during execution.

2. Limit orders

Buy or sell at a specific price before an expiration date.

If prices hit the target, the order executes; otherwise, it expires.

CoW Protocol handles these without gas fees and optimizes for the best possible prices.

3. TWAP orders

Break large orders into smaller trades over time to minimize price impact.

Users set assets, price limits, split count, and duration to control order execution.

4. Programmatic orders

Automated trades based on specific conditions (e.g., price triggers).

Useful for complex strategies, DAOs, and protocol-level transactions.

5. Milkman orders

Created by Yearn Finance in collaboration with CoW Protocol, Milkman orders rely on real-time price feeds instead of fixed prices.

Milkman orders can be executed at a fair market price even if the orders are significantly delayed.

Useful for DAOs and governance-dependent trades.

6. CoW Hooks

CoW Hooks allows users to run custom actions before or after trades, like bridging funds, staking, or claiming rewards. 

CoW Hooks executes a combination of actions as a single transaction, allowing users to pair any Ethereum-related action with their CoW orders.

Developers and traders are able to express their intent.

MEV Blocker

Developed by CoW DAO, Beaver Builder, and Gnosis DAO, the MEV Blocker is a tool that protects users from frontrunning and sandwich attacks. It sends transactions to a secure network, avoiding public pools that attract bots.

Frontrunning happens when bots spot a big transaction in the queue and place their order before it, taking advantage of the expected price change. This often leaves the original trader with a worse price.

Backrunning occurs when bots place trades right after a major transaction so they can cash in on price shifts left by the original trade. This is less harmful since it doesn’t impact the original trader’s price.

Sandwich Attacks are a combination of both, where a bot places a trade before and after a user’s transaction, inflating the price and profiting at the user’s expense.

These tactics exploit the transparent nature of blockchain networks, but they can be combated with tools like the CoW MEV Blocker.

With MEV Blocker, users can also earn a rebate of up to 90% from backrunning trades created by their own transactions. This tool is faster than standard transaction processes and gives users real-time tracking and transparency. Many Web3 wallets, like Uniswap and Trust Wallet, have integrated the MEV Blocker for safer, more efficient trading.

CoW AMM

The LVR problem

Liquidity providers (LPs) often lose out because most AMMs don’t adjust quickly enough to match the latest prices on major exchanges, leaving outdated prices that arbitrage traders exploit. This is known as the "loss-versus-rebalancing" (LVR) problem, which reduces profits for LPs.

To solve the LVR problem, the CoW AMM uses a novel mechanism called the Function-Maximizing AMM (FM-AMM). This mechanism batches trades and sets a single clearing price for each batch, ensuring trades happen at a fair, up-to-date price.

COW Token

The COW token is central to the CoW Protocol, acting as a governance token that lets stakeholders take part in decision-making for the protocol's growth and changes. This governance system is designed to align the interests of users, developers, and supporters, fostering a community-driven approach.

Closing Thoughts

CoW DAO offers innovative solutions to keep Ethereum users safe from manipulation, ensuring better trading, liquidity protection, and decentralized governance. Through CoW Protocol, MEV Blocker, and CoW AMM, users can enjoy lower fees, reduced risk, and increased control over transactions.

Further Reading

What Is a Decentralized Exchange (DEX)?

What Is an Automated Market Maker (AMM)?

What Are Web3 Wallets?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Binance Wealth meets the growing demand from private wealth sectors for reliable and integrated crypto investment solutions directly on a crypto exchange.

It offers an intuitive platform for wealth managers to support their high-net-worth clients’ crypto investment journey with confidence, including their account opening and investment recommendations.

Binance Wealth replicates traditional wealth management frameworks while leveraging Binance’s security, providing secure access to deep crypto liquidity for wealth managers and their clients.

Introduction

Binance Wealth is a special solution designed exclusively for wealth managers and their high-net-worth clients who are ready to explore the world of crypto. It gives wealth managers an easy-to-use platform to help their clients get into digital assets with confidence directly on the world’s largest cryptocurrency exchange by trading volume.

Binance is the world’s only digital asset exchange to offer such a solution, built on its security infrastructure to provide wealth managers with convenience and peace of mind to oversee their clients’ crypto investment journey.

Increasing Interest in Digital Assets

The past year has seen notable growth in interest from institutional investors and private wealth sectors in digital assets. The demand for a secure, efficient solution to include cryptocurrency in wealth management portfolios led to the development of Binance Wealth. 

Binance Wealth is designed to make it easier than ever for wealth managers to expose their high-net-worth clients to digital assets and provide crypto advisory directly through the Binance platform. By providing the tools and infrastructure for wealth managers to take charge of their clients’ onboarding and investment recommendations, Binance Wealth brings a familiar, premium experience for high-net-worth clients, and gives wealth managers all the tools they need to support clients through their crypto investment journey. 

Binance Wealth supports both active and passive investing with access to a suite of trading and yield products. Once clients are onboarded through their wealth managers, they can decide to manage their portfolios independently or rely on their manager’s guidance, retaining final approval on all investments recommended by their trusted advisor.

Who Is Binance Wealth For?

As of November 2024, only corporate wealth managers with a business entity registered to provide wealth advisory or investment services are eligible to access Binance Wealth. Applications are not currently available for individual users.

Insights from Binance VIP & Institutional

Catherine Chen, Head of Binance VIP & Institutional, commented on the increasing interest from institutional investors in digital assets, emphasizing the demand from wealth managers worldwide for crypto solutions providing convenient and secure exposure to digital assets:

Binance Wealth significantly lowers entry barriers by providing them with direct access to the deepest crypto liquidity within a secure, regulatory-compliant platform that both managers and their clients can trust.

Integrating Traditional Wealth Management with Digital Innovation

As the only platform of its type developed by a cryptocurrency exchange, Binance Wealth reinforces Binance’s role in connecting traditional and crypto markets. 

This new service builds on prior successes, such as the triparty banking solution launched in 2023, and aims to onboard more private clients and institutions into the digital asset space.

How to Get Started With Binance Wealth

Wealth managers looking to access Binance Wealth can follow these steps:

Registering: Managers must register their interest via the official contact form. Alternatively, they may also reach out to a Binance VIP representative they may already be in touch with.

KYB onboarding: Eligible wealth managers must then complete a Know Your Business (KYB) process before getting access to Binance Wealth.

Client onboarding: Once onboarded, wealth managers can begin assisting high-net-worth clients interested in exploring digital assets with their account opening process.

Closing Thoughts

As more people look to add crypto to their portfolios, there’s been a clear need for a platform that wealth managers can trust – and that’s exactly why Binance Wealth was created. Wealth managers now have an opportunity to offer digital asset exposure to their clients while leveraging Binance’s liquidity and security.

Further Reading

Binance Beginner's Guide 

Your Guide to Binance Deposit/Withdrawal

What Is Binance P2P and How to Use It?  

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Basis trading is about taking advantage of price gaps between what something costs now (spot price) versus what it’s expected to cost later (futures price).

Farmers, investors, and crypto traders can use basis trading strategies to hedge risks or make profits. It’s popular in commodities, bonds, and Bitcoin markets.

Basis trading involves risks and can be confusing for beginners. It requires understanding market dynamics and managing risks due to unexpected price movements or eventual liquidity issues.

What Is Basis Trading?

Imagine you’re buying apples at the grocery store for $1.50 each. But your friend is offering to sell you a batch of apples, which they will deliver next month for $1.30 each. That 20-cent difference is what traders call the basis. In financial markets, the basis is the difference between the spot price and the futures price.

In basis trading, investors try to make money by predicting how this gap (the basis) will change over time. If you think the gap will grow, you “long the basis.” If you think it will shrink, you "go short." It’s a game of strategy, analysis, and sometimes luck.

How Basis Trading Works

Spot and futures prices

The spot price is what you’d pay right now, while the futures price is what’s agreed upon for a future date. These prices often differ because they account for multiple factors, such as storage, interest rates, or expectations about supply and demand.

For example, let’s say corn costs $5 a bushel today (spot price), and the futures price for corn three months from now is $5.50. The basis, in this case, is -$0.50. If you believe the spot price will rise faster than the futures price, you might "go long" on the basis.

Types of basis trades

Traders can go long or short, depending on their analysis. They often use a mix of market trends, historical data, and economic factors to make their predictions.

Long: Betting that the spot price will increase relative to the futures price.

Short: Betting that the spot price will fall or that the futures price will rise faster.

Why Is Basis Trading Such a Big Deal?

For hedgers

Basis trading can be a lifesaver for people who produce or rely on commodities. Think about a wheat farmer. They know they’ll harvest 10,000 bushels in three months, but they’re worried about prices dropping. By selling futures contracts now, they lock in a price and reduce their risk.

On the flip side, a bread factory might use basis trading to secure future wheat supplies at a predictable cost. Both parties are protecting themselves from unpleasant surprises.

For speculators

Speculators are in it for the profits. They study market trends and bet on where the basis is heading. For example, if a trader thinks strong demand will push up the spot price of oil, they’ll "go long" and cash in if their prediction comes true.

Where Do Traders Use Basis Trading?

1. Commodities

This is where basis trading shines. Farmers, miners, and energy producers use it to hedge risks while speculators look for profits. Basis trading can be done with grains, oil, gold, or any other commodity that has a spot and futures market.

2. Fixed income (bonds)

In bond markets, traders often look at the difference between cash bonds and derivatives like credit default swaps (CDS). A "negative basis trade" happens when the spread on CDS is smaller than the bond’s spread. This creates arbitrage opportunities for traders.

3. Cryptocurrencies

In the context of cryptocurrencies, the basis trading relies on the gap between the price of a crypto asset in the spot market and the price of their contracts in futures markets. 

Crypto basis trading became significantly more popular after the launch of spot Bitcoin ETFs in early 2024. Since then, many traders started exploring price differences between spot ETFs and major futures markets such as the CME Bitcoin Futures.

Bitcoin basis trading example

Bitcoin basis traders look for price differences between the spot market (where BTC is traded instantly) and futures contracts (which track the cryptocurrency’s future prices). 

For example, if BTC is trading at $80,000 in the spot market, but futures contracts for delivery in three months are priced at $82,000, Alice could buy bitcoin on the spot market while selling the same amount of BTC in the futures market.

Spot price: $80,000 per BTC.

Futures price: $82,000 per BTC for delivery in 3 months.

Basis: $2,000.

Rationale: Alice believes this $2,000 gap (basis) will shrink over the next few weeks due to increasing spot demand or decreasing futures premium.

Strategy: Alice executes a cash-and-carry arbitrage, buying BTC in the spot market for $80,000 and selling a BTC futures contract for $82,000. 

Outcome: If the prices converge as expected, Alice uses the BTC bought in the spot market to fulfill the futures contract, effectively locking a $2,000 profit per BTC minus fees and operational costs.

Risks and Challenges of Basis Trading

1. Basis risk

One of the biggest headaches for basis traders is when the spot and futures prices don’t move as expected. For instance, a farmer hedging corn prices might lose money if unpredictable weather disrupts supply and demand.

2. Market liquidity

If the market doesn’t have enough liquidity, traders might struggle to enter or exit positions at the desired prices. This is especially true in volatile markets or during financial crises.

3. Complexity

Basis trading can be complicated at times. Understanding market dynamics, analyzing trends, and managing risks effectively requires expertise. Beginners might find themselves overwhelmed.

Closing Thoughts

Basis trading might sound complex, but at its core, it’s all about making smart bets on price differences. Whether you’re managing risks in commodities, hunting for profits in bonds, or navigating the world of crypto, this strategy offers plenty of opportunities.

If you’re an investor, understanding basis trading can open up new opportunities to protect your portfolio or boost profits. For producers and manufacturers, it’s a way to ensure stability in unpredictable markets. And if you’re a speculator, basis trading can be an interesting (and profitable) strategy—as long as you know what you are doing.

Further Reading

What Are Carry Trades and How Do They Work?

What Are Bonds and How Do They Work?

Interest Rates Explained

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Michael J. Saylor is a popular entrepreneur, business executive, and Bitcoin advocate. He is the co-founder and executive chairman of MicroStrategy.

Michael Saylor advocates bitcoin as a "digital gold" and leads MicroStrategy's crypto investments strategy. As of November 2024, the company holds more than 1.4% of the total BTC supply, with over 330,000 bitcoins.

MicroStrategy uses bold debt strategies, including convertible notes, to fund its Bitcoin purchases. Saylor's approach has driven institutional interest and influenced cryptocurrency market dynamics.

Who Is Michael Saylor?

Michael J. Saylor is a prominent entrepreneur, business executive, and Bitcoin advocate. Best known as the co-founder and executive chairman of MicroStrategy, Saylor has played a very important role in raising awareness and increasing corporate adoption of Bitcoin and blockchain technology. He also contributed extensively to MicroStrategy’s growth and development throughout the years.

Saylor was born in Lincoln, Nebraska, and attended the Massachusetts Institute of Technology (MIT) on an Air Force ROTC scholarship. He earned dual degrees in aeronautics and astronautics.

Saylor’s View on Bitcoin

Saylor often calls bitcoin the "apex property of the human race," saying it’s better than gold or any other traditional store of value. According to him, bitcoin is the most secure and portable asset you can own due to its resilience against inflation and government interference.

What Is MicroStrategy?

Saylor co-founded MicroStrategy in 1989, along with Sanju Bansal. MicroStrategy is a development company that offers business intelligence (BI), mobile software, and cloud-based solutions. The company went public in 1998 via an initial public offering (IPO). Its ticker symbol on NASDAQ is MSTR.

MicroStrategy and Bitcoin

Although MicroStrategy was, for many years, focused on producing software for data mining and BI solutions, the company became increasingly popular when it started investing in bitcoin as a treasury reserve asset.

In 2020, Michael Saylor made headlines when he decided to steer MicroStrategy into the world of cryptocurrency. At the time, the world was dealing with economic uncertainty due to the COVID-19 pandemic, and Saylor was concerned about inflation eating into MicroStrategy's cash reserves.

In August 2020, MicroStrategy purchased its first $250 million worth of bitcoin. Saylor justified the investment, stating that bitcoin is not just another digital trend but a "digital gold" that can protect wealth from inflation and offer long-term value. Since then, the company has kept buying bitcoins and now holds more than 300,000 BTC (more than 1.4% of the max supply). 

Debt offerings to buy bitcoin

What really sets MicroStrategy apart from other companies dabbling in bitcoin is its bold strategy of using debt to fund its BTC purchases. The company has raised billions of dollars by selling convertible notes, which are basically IOUs that investors can later exchange for cash, MicroStrategy stock (MSTR), or a mix of both.

For example:

In late 2020, MicroStrategy raised $650 million and used it all to buy bitcoin. It followed up with more rounds of borrowing, including a $500 million secured note offering in 2021.

In October 2024, MicroStrategy announced its plan to raise $42 billion to buy more bitcoin over the next three years.

In November 2024, they announced the pricing of a convertible senior notes offering set to raise approximately $2.6 billion. The sale ended up raising $3 billion of notes with maturity to 2029.

As of November 2024, the company has issued six convertible notes, maturing from 2027 to 2032.

This strategy is seen by many as risky, but Saylor argues it’s worth it because bitcoin is the “scarcest asset” in the world. He compares it to owning “digital real estate,” emphasizing its resilience against inflation.

High reward, high risk

While Saylor’s strategy has been lucrative in bull markets, it also has inherent risks. MicroStrategy’s heavy investment in bitcoin means its financial health is closely related to bitcoin’s volatile price. For instance, when bitcoin’s value dropped in 2022, some worried the company might face a “margin call” on its loans, but it eventually managed to ride out the storm.

How many bitcoins does MicroStrategy hold?

As of November 2024, MicroStrategy holds 331,200 bitcoins, which are worth more than $32.5 billion. MicroStrategy acquired BTC throughout the years using a dollar-cost averaging (DCA) strategy. The 331,200 bitcoins were bought for roughly $16.5 billion, with an approximate average cost of $50,000 per BTC.

The Broader Impact of Saylor’s Bitcoin Advocacy

Institutional adoption

Saylor’s outspoken advocacy has had a ripple effect across the corporate world. By showcasing the feasibility of holding bitcoin as a treasury reserve, he has inspired other companies to explore cryptocurrency investments. Tesla, Square, and other firms have followed similar paths, lending legitimacy to bitcoin as an institutional asset.

Market Dynamics

MicroStrategy’s large-scale acquisitions have also influenced bitcoin’s market price. The company’s purchases often involve substantial volumes, occasionally causing price surges and heightened market activity. This highlights the growing role of institutional investors in shaping cryptocurrency markets.

Michael Saylor’s Net Worth

As of November 2024, Michael Saylor’s net worth is above $11 billion. Notably, MicroStrategy’s aggressive bitcoin purchases helped drive the MSTR stock up more than 450% in 2024.

Closing Thoughts

As cryptocurrencies become more integrated into mainstream finance, Michael Saylor is likely to remain a leading voice in the space. At MicroStrategy, the focus is clear: keep acquiring bitcoin and champion its potential as the future of money.

For Saylor, bitcoin is more than just a business strategy; it’s a belief in a decentralized financial system that can empower individuals worldwide. Whether you see him as a visionary or a risk-taker, there’s no denying that Michael Saylor is a prominent figure in the finance and crypto spaces.

Further Reading

What Is Bitcoin and How Does It Work?

Is Bitcoin a Store of Value?

Dollar-Cost Averaging (DCA) Explained

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

AI agents are self-operating programs that are able to analyze information, learn from their own experiences, and execute tasks on behalf of users.

AI agents differ from regular bots due to their increased capacity to operate and improve with little human intervention. AI agents are also able to interact with other agents and applications.

AI agents have various use cases. For example, they can help improve crypto by automating trades, managing risks, making NFTs more interactive, and simplifying blockchain, making Web3 easier to use.

Introduction

Artificial intelligence (AI) is transforming the way we live, work, and interact with technology. In the cryptocurrency space, AI agents represent a key innovation that is creating smarter systems that can be used in a variety of use cases, from trading to creating art.

What Are AI Agents?

We can think of AI agents as autonomous programs capable of making decisions, learning from their experiences, and taking action based on the tasks they’re given. For example, a good AI agent should be able to:

Manage a crypto investment portfolio.

Automate customer service by handling user queries.

Execute complex processes like smart contract audits or blockchain-based trades.

What makes these agents unique is their ability to continuously improve using machine learning. They’re designed to analyze data, predict outcomes, and adapt their behavior (all without a human hovering over them). Such properties make AI agents significantly different from regular bots.

How Do AI Agents Work?

At their core, AI agents rely on three main pillars:

Observation: They gather data from their environment. This could include real-time market data, user input, or blockchain transactions.

Processing: Using advanced algorithms and machine learning, AI agents can analyze a dataset and decide the best course of action. For example, a trading AI agent might use data to find potentially profitable entry points for crypto trades.

Action: They execute tasks based on their analysis, like buying crypto, sending a notification, or creating a digital asset.

These agents often incorporate natural language processing (NLP) to communicate with users in an intuitive way, making them more accessible to non-technical individuals. Large language models (LLMs) like GPT-4 enable them to understand and respond to complex queries, making blockchain and crypto feel less intimidating to newcomers.

AI Agents and Crypto

The cryptocurrency ecosystem thrives on automation, transparency, and decentralization—qualities that align perfectly with what AI agents bring to the table. Here’s how AI Agents are reshaping the blockchain industry:

1. Smarter DeFi tools

In decentralized finance (DeFi), managing trades, optimizing yields, or even understanding risk can be overwhelming. AI agents can handle these tasks more efficiently than humans. For instance:

Automated trading: AI-powered agents can monitor markets and execute trades in real time, capitalizing on opportunities far faster than a person could.

Risk management: They can assess potential vulnerabilities in a portfolio or smart contract, helping users avoid losses.

2. Generative art and NFTs

AI agents can also be used with NFTs (non-fungible tokens). They can create unique digital art pieces or intelligent NFTs (iNFTs) that interact with users. For example:

A collector could own an iNFT that evolves its personality based on interactions, making it not just a static image but an interactive experience.

Tools like Binance’s Bixel let users create AI-generated art and mint it directly on the blockchain.

3. Simplifying blockchain interactions

Blockchain technology can feel complex, especially for beginners. AI agents can simplify things by automating processes like crypto wallet management, transaction approvals, or even interacting with smart contracts. They can make crypto more approachable, which helps accelerate adoption.

AI agents can also act as delegates in decentralized autonomous organizations (DAOs), managing voting, proposing strategies, or automating operations based on the interests of token holders.

4. Making payments easier

Traditional systems like credit cards or payment processors aren’t well-suited for handling micropayments or frequent transactions. Cryptocurrencies solve this with low fees and fast transactions. 

AI agents can leverage crypto payment systems to enable pay-per-request models and seamless transfers:

Pay-per-request models: For example, an agent could pay small amounts to access real-time weather data or news on behalf of a user.

Seamless transfers: Agents can manage payments between parties instantly and without human intervention.

Challenges Faced by AI Agents in the Crypto Space

Of course, integrating AI into crypto isn’t all smooth sailing. There are still some major hurdles to overcome:

Scalability issues: Most blockchains weren’t designed for the rapid, real-time interactions required by AI agents. Although there are many scaling solutions in place, scaling these systems for seamless global use is still a work in progress.

Accuracy problems: AI agents aren’t perfect. Even small errors can lead to big problems, especially in tasks like trading or managing smart contracts. Developers are working on solutions like Retrieval-Augmented Generation (RAG) to reduce errors and make these systems more reliable.

Trust and transparency: Blockchain helps by creating transparent records of AI agent activity, but building decentralized trust systems for millions of autonomous agents remains a challenge. Data privacy, misuse, and the unintended consequences of AI agents require regulatory and ethical oversight.

The Future of AI Agents in Crypto

While we’re still in the early days, the potential of AI agents in blockchain is enormous. Here are a few possibilities that could shape the future:

Decentralized AI economies: Imagine a network of AI agents interacting with each other, each performing specialized tasks. Together, they could form a self-sustaining economy where agents trade services and manage resources autonomously.

Widespread Web3 adoption: By automating and simplifying blockchain interactions, AI agents could make Web3 technologies accessible to everyone, from tech enthusiasts to casual users.

Advanced DeFi applications: As AI tools improve, they might unlock new strategies for yield optimization, risk management, and even collaborative investing.

Closing Thoughts

By automating tasks, enabling smarter decision-making, and simplifying complex systems, AI agents are helping to push the boundaries of what’s possible in the digital economy. While challenges remain, the synergy between AI and blockchain has the potential to redefine industries far beyond cryptocurrency.

Further Reading

Top 5 Artificial Intelligence (AI) Cryptocurrencies

The Relationship Between Blockchain and AI

What Is NEAR Protocol (NEAR)?

Binance Research: Exploring the Future of AI Agents in Crypto

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Using exit strategies like stop-losses, take-profit targets, and trailing stops makes it easier for traders to manage risk and lock in profits without getting too emotional. 

Proper risk management and exit strategies are important for any trader who wants to stay disciplined and succeed in the long run, especially in the volatile crypto markets.

This article goes through five exit strategies for traders before discussing a few ways of combining different strategies.

Introduction

For traders, knowing when to exit a trade is as important as knowing when to enter. A well-planned exit strategy can help you protect profits, minimize losses, and reduce emotional decision-making. These are particularly useful during volatile market conditions.

In this article, we will go through five exit strategies for traders, including stop-loss orders, take-profit targets, trailing stops, dollar-cost averaging (DCA), and technical indicators. At the end, we will explore a few ways of combining different strategies.

1. Stop-Loss Orders

A stop-loss order automatically closes a trade when the price of an asset reaches a specific level. As the name suggests, stop loss orders are designed to limit potential losses in case the market moves against your positions. They are an essential tool for proper risk management.

How to use stop-loss orders

Percentage-based stops: Set a stop-loss at a specific percentage below your entry price. For example, if you buy Bitcoin at $40,000 and set a 5% stop-loss, your trade will close if BTC drops to $38,000.

Technical stop-loss: Place your stop-loss below a support level or a significant moving average. For instance, if BTC is trading above the 200-day moving average at $37,000, you might place your stop somewhere below $37,000.

Advantages

Provides a clear risk management plan.

Automates the exit process, reducing emotional involvement.

2. Take-Profit Targets

Take-profit orders are similar to stop-loss orders, but instead of cutting losses, they lock your profits. These orders are designed to automatically sell a position when the price reaches a certain profit level. Take-profit orders can help you secure gains without necessarily waiting for the "perfect" exit.

How to Set Take-Profit Targets

Risk-reward ratio: You can use a risk-reward ratio like 1:2, meaning for every dollar at risk, you aim to gain two dollars. If your stop-loss is $1,000 below your entry, you can set a take-profit $2,000 above.

Fibonacci levels: Another option is to apply Fibonacci retracement and extension tools to identify potential profit levels. For instance, the 1.618 fib extension level often acts as a key take-profit zone.

Advantages

Prevents greed-driven overtrading.

Helps achieve consistent profitability by focusing on predefined targets.

3. Trailing Stops

Trailing stops are stop-loss orders designed to move along with the price. The idea is to constantly update your stop-loss level to lock in profits as the price changes. For example, if you are long and the price falls by a specified percentage or dollar amount, trailing stops can help you exit the trade automatically.

How to use trailing stops

Set the trailing stop percentage or value. For instance, with a 5% trailing stop, if BTC moves from $40,000 to $50,000, your stop-loss adjusts to $47,500 (5% below $50,000). If it moves further to $60,000, your stop-loss adjusts to $57,000 (5% below $60,000).

Advantages

Allows participation in extended uptrends.

Minimizes losses during sudden market reversals.

4. Dollar-Cost Averaging (DCA) Out of Trades

DCA, commonly used for entering markets, can also be an interesting strategy for exiting positions gradually. Instead of selling all at once, you sell portions of your position at regular intervals or at different price points. This will average your exit price.

Example

Suppose you own 1 Bitcoin purchased at $20,000. During a bull run, BTC rises to $50,000. Instead of selling everything at $50,000, you sell 0.1 BTC at $50,000, another 0.1 BTC at $55,000, and so on. This reduces the risk of missing out on further gains while locking in some profits.

Advantages

Reduces the emotional impact of exiting too early or too late.

Smoothens profits over multiple price levels.

5. Technical Analysis Indicators

Some traders leverage technical analysis (TA) tools to define exits based on market signals rather than emotions. Some popular indicators include moving averages, RSI, and Parabolic SAR.

Moving averages

Example: If BTC's price crosses below its 50-day moving average, it could signal a bearish reversal. Exiting at this point helps avoid further losses.

Relative Strength Index (RSI)

Example: If Bitcoin's RSI rises above 70 (overbought), it may indicate a reversal. Exiting at this point locks in profits before a potential downturn.

Parabolic SAR (stop and reverse)

Example: The Parabolic SAR indicator plots points above or below the price. When the dots switch from below to above the price, it signals a potential exit point.

Advantages

Adapts to market conditions in real time.

Removes guesswork from decision-making.

Combining Strategies for Optimal Results

Each of these exit strategies has its merits, but they can be even more effective when combined. For example, you can use stop-loss orders alongside take-profit targets to define a clear range for your trade.

Alternatively, you may combine technical indicators with trailing stops to secure gains in trending markets. Or use technical indicators to define multiple price levels to DCA out.

For example, suppose you buy Bitcoin at $44,000:

Set a stop-loss at $42,000 to limit potential losses.

Place a take-profit order at $50,000 for partial profits.

Use a trailing stop to capture gains if BTC surges past $50,000.

If BTC hits $60,000 or more with an RSI of over 70, gradually DCA out to lock the remaining profits and reduce risks.

Closing Thoughts

Exit strategies are essential for successful trading, offering a structured approach to managing profits and losses. Whether you use stop-loss orders, take-profit targets, trailing stops, DCA, or technical indicators, having a clear plan will help you remain disciplined and adaptable.

Try experimenting with different combinations to find what works best for your trading style and objectives, and remember that long-term success comes from disciplined execution and risk management, not guesswork.

Further Reading

What Is Technical Analysis?

What Are Stop-Loss and Take-Profit Levels and How to Calculate Them?

Dollar-Cost Averaging (DCA) Explained

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

BFUSD is a special asset on Binance designed for Futures traders. It works as collateral for trades while offering daily USDT rewards.

By holding BFUSD, users can earn daily rewards in USDT, with additional rewards available for those actively trading USDⓈ-M Futures using BFUSD as collateral. These rewards are powered by Binance’s strategies like delta-neutral hedging and Ethereum staking.

To ensure stability during tough market conditions, a Reserve Fund—initially funded with 1 million USDT—supports BFUSD’s hedging mechanism, offering protection against negative funding rates.

What Is BFUSD?

BFUSD is a reward-earning asset designed exclusively for Binance Futures users. It’s a special tool that allows traders to earn extra rewards when using it as margin for futures trading. But what exactly is BFUSD and how does it work?

How Does BFUSD Work?

Binance Futures users can buy BFUSD to boost their trading power and earn passive income. In other words, when you buy BFUSD, you’re essentially converting your USDT into an asset that works as trading collateral while also generating rewards. 

Users can qualify for daily USDT rewards by simply holding BFUSD in their Binance USDⓈ-M Futures wallet. In addition, if they use BFUSD for futures trading, they can get even higher USDT rewards.

BFUSD Rewards

BFUSD rewards are based on Binance’s investment and hedging strategies, which consist mostly of delta hedging and ether (ETH) staking.

Delta hedging is a strategy that involves hedging ETH and other cryptocurrencies between the spot and futures markets. The idea is to collect funding fees by opening trading positions that offset each other and greatly reduce risks.

The ETH staking strategy involves using the funds collected from BFUSD sales to buy and stake ETH. The staking rewards are then used to fund the rewards given to BFUSD holders.

The Daily Reward Rates are calculated daily, but the exact rate varies depending on how much Binance earns from its hedging and staking activities.

Base Rate and Boosted Rate

Binance splits rewards into two categories:

Base Rate: USDT rewards for simply holding BFUSD in your Binance USDⓈ-M Futures wallet.

Boosted Rate: Higher reward rate for those who actively trade using BFUSD as collateral.

Reserve Fund

The BFUSD Reserve Fund is a special fund created by Binance to protect users from the potential impact of negative funding rates. The fund started with 1 million USDT, but it has grown over time as a portion of the income generated by Binance’s investment and hedging strategies are allocated to it.

How to Use BFUSD

BFUSD can be used as margin in Binance Futures markets, enabling traders to increase their leverage and trading power. You can start using BFUSD in a few simple steps:

Log in to your Binance account.

Navigate to the Futures page and find the BFUSD section.

Click [Buy] BFUSD, enter the amount of USDT you want to convert and click [Confirm].

Enable Multi-Asset Mode: This allows BFUSD to be used as margin in your trades.

Start earning: You can hold your BFUSD for passive earnings or boost your rewards by using BFUSD as margin when trading futures.

Redeeming BFUSD

If you decide you no longer want to hold BFUSD, you can redeem it back into USDT at a 1:1 ratio. Follow these steps to redeem your BFUSD:

Go to your Binance account, navigate to the Futures page, and find the BFUSD section.

Click [Redeem].

Enter the amount of BFUSD you want to convert and confirm.

Keep in mind, there are small fees for both buying and redeeming BFUSD. Also, in rare cases of high demand, Binance might delay redemptions for up to seven days.

Why Should You Use BFUSD?

Benefits for Traders

Earn passive rewards: You can earn USDT rewards every day by simply holding BFUSD in your Binance Futures wallet.

Boost your trading: By using BFUSD as margin, you can access more capital for your trades.

Flexibility: You can redeem BFUSD for USDT in just a few simple steps.

Protection from risks: Binance has set up a Reserve Fund to reduce risks and keep rewards relatively stable.

Things to Consider When Using BFUSD

While BFUSD is a great tool for futures traders, there are a few things to keep in mind:

Fees: Each time you buy or redeem BFUSD, there’s a small fee (usually 0.1%).

Market risk: Your rewards depend on market conditions. On bad days, you might earn less than expected.

Redemption delays: If lots of people try to redeem BFUSD at the same time, you might have to wait a few days for Binance to process it.

Closing Thoughts

BFUSD is a great tool for Binance Futures traders who want to maximize their trading potential while earning some extra income. It’s flexible, easy to use, and backed by solid investment strategies. Whether you’re a passive HODLer or an active trader, BFUSD can be a valuable addition to your trading toolkit.

That said, always keep an eye on fees, market risks, and Binance’s terms. If you’re ready to give BFUSD a try, head over to the Binance Futures section and start exploring its benefits today!

Further Reading

Your Guide to Binance Launchpad and Launchpool 

What Is a Stablecoin?

What Is Crypto Staking and How Does It Work? 

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.