coinengineer.io
After Binance announced its new BFUSD token, promising an annual yield of 19.55%, the news quickly spread on social media. This sparked comparisons to Terra‘s collapse, with its algorithmic stablecoin USTC facing a similar fate. In response, Binance clarified that BFUSD is not a stablecoin and has not yet been launched.
How Will BFUSD Work?
BFUSD will be held in UM wallets, with users receiving daily airdrops without needing to lock up their funds. The amount of BFUSD users can earn will depend on their VIP level on Binance. According to the official launch page, BFUSD will be used as collateral for futures trading.
The promise of high yields led some users to express doubts, drawing parallels with the failed Anchor protocol from Terra, which also promised high returns. In May 2022, UST lost its dollar peg, causing the entire Terra ecosystem to collapse, resulting in billions in losses.
Might interest you: Who Could Replace Gary Gensler as SEC Chairman?
One user asked, “Are we repeating the same mistakes?” while another questioned the sustainability of the yields: “Are we the ones providing the yield?”
Why Binance is Confident in BFUSD
Binance defends BFUSD, stating that it complies with existing regulations and allows users to earn rewards without locking their assets. However, given past failures in the crypto world, promises of high returns are often met with skepticism.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.