Binance Dismisses BFUSD as a Stablecoin With 19.55% APY

On November 14, 2024, Binance got here ahead to clear the fog round ‘BFUSD’ after the small print of its new asset launch leaked on X.

As per the report, the tweet was posted from Zoomer, claiming that Binance is planning to launch a brand new stablecoin with 19.55%. This viral put up was time-sensitive as Bitcoin is at the moment crusing by one of many largest rallies of its historical past.

BFUSD Remembers Reminiscence of Terra

The assure of 19.55% APY has raised skepticism about BFUSD on X, recalling the reminiscence of as soon as the largest stablecoin TerraLUNA, which turned out to be a catastrophe later. 

https://x.com/RunnerXBT/standing/1858581361864401141

UST, the algorithmic stablecoin of the Terra ecosystem, was designed to take care of a 1:1 peg with the USD through LUNA, its companion foreign money. The 20% APY promise was a key half, which was maintained by the Anchor Protocol, a lending and borrowing platform. 

Nonetheless, panic promoting and UST depeg created a failure in Terra’s algorithmic mechanism, forcing its undertaking to wind up operations. This occasion has realized that the flowery promise of 20% APY is an unsustainable lure. 

Quickly after, Binance Buyer Help responded to the put up. Binance clarified that BFUSD isn’t but launched and the undertaking continues to be within the pipeline. Additionally, Binance has refused to name BFUSD  a stablecoin, as a substitute, claiming it to be a reward-bearing margin asset for futures buying and selling. 

Typically, a reward-bearing margin asset in crypto futures buying and selling refers to a margin asset that not solely leverages as collateral but additionally generates extra rewards, corresponding to curiosity or staking yields. These property permit merchants to maximise their utility whereas having fun with future buying and selling on the identical time. 

Based mostly on customers’ VIP stage, customers’ quota for BFUSD holdings can be determined. Customers will be capable to buy BFUSD straight from the ‘UM pockets’ through USDT. Energetic merchants may even get an opportunity to take part in every day airdrops despatched to their “UM Futures Pockets” based mostly on snapshots.

Additionally Learn: US DOJ Seeks to Seize $16 Million from Binance Account Linked to FTX