Binance has clarified that its new high-yield asset, BFUSD, is not a stablecoin and has yet to be launched.
BFUSD is not yet launched.
To be clear, it is not a stablecoin but a reward-bearing margin asset for futures trading.
We are glad to see the community’s interest and will be sharing more details soon including how APY is determined
— Binance Customer Support (@BinanceHelpDesk) November 18, 2024
The clarification comes after a post on X by crypto news aggregator Zoomerfied on November 17, which suggested that Binance would release a stablecoin offering a 19.55% annual yield. This announcement led many users to draw comparisons with Terraform Labs’ failed algorithmic stablecoin, TerraClassicUSD, which was once tied to similar yield promises.
In response to the growing confusion, Binance customer support explained that BFUSD is not a stablecoin but a reward-bearing margin product designed for futures trading.
According to Binance, BFUSD will allow users to deploy it as collateral without needing to lock or stake their funds. Instead, traders can hold BFUSD in their “UM wallet” and receive daily airdrops to their “UM Futures Wallet” based on periodic snapshots. Additionally, users’ BFUSD quotas will depend on their social ranking, or VIP level, within the Binance ecosystem.
Scepticism from the crypto community emerged due to the high yields associated with BFUSD. Many recalled the fallout of Terraform Labs’ Anchor Protocol, which offered a 20% yield before its collapse. Pseudonymous trader RunnerXBT and others questioned the sustainability of such returns, while Bitcoin advocate Jameson Lopp also expressed doubts about the proposed yield model.
Meanwhile, Binance has introduced merged mining on its pool mining platform, allowing users to mine Bitcoin and earn rewards in Fractal Bitcoin (FB), the native token of a Layer 2 sidechain project. The project’s mainnet, which launched in September 2024, is expected to help scale unlimited layers on top of Bitcoin and enhance its functionality. Its genesis block featured the same message originally embedded by Bitcoin creator Satoshi Nakamoto in Bitcoin’s first block.
Binance, however, clarified that adding the FB mining feature does not imply that it will list the token on its platform anytime soon.
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