While part of the crypto community compared Binance's future BFUSD to UST, the exchange made a clarification. The trigger for this controversy is the return of 19.55% per year. What do we know?
Binance clarifies how its BFUSD works
Yesterday on X, crypto investors expressed their surprise after Binance introduced BFUSDan asset supposed to provide 19.55% returns per year thanks to compound interest. In addition, this famous BFUSD can be used as collateral on the exchange's futures trading platform.
💡 How to use the Binance cryptocurrency platform?
Given its name, the asset was quickly likened to a new stablecoin, and its impressive yield reignited past trauma surrounding the collapse of UST. Thus, many users have made the connection between the two assets, highlighting in passing a lack of clarity on how these returns were generated.
Faced with the controversy, the company was forced to react, in an attempt to calm the critics. So, Binance customer support clarified that BFUSD is not a stablecoin and it was not yet launched:
BFUSD is not yet launched. To be clear, this is not a stablecoin, but a margin-earning asset for trading futures. We're happy to see interest from the community and will share more details soon, including how the APY is determined.
👉 On the same subject — Binance Launchpool: How to participate to win USUAL tokens?
At the same time, the page that announced the arrival of the asset on the Binance website is now no longer online. However, it appears that the maximum amount of BFUSD that can be held per user will depend on the user's VIP level and that its use as collateral will only be available in multi-asset mode.
Under these conditions, the analogy with the UST thus seems less relevant. To find out more about this new feature, however, you will have to wait a little longer for Binance to reveal more information.
Open an account on Binance, the world’s #1 crypto platform
Source:
The #1 Crypto Newsletter 🍞
Receive a summary of crypto news every day by email 👌
What you need to know about affiliate links. This page may feature investment-related assets, products or services. Some links in this article may be affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you can even get a bonus using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Since 2021, I have devoted my free time to seriously educating myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyzes on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
1455 items
