Binance announced that the upcoming product BFUSD is not actually a stablecoin, after a news site compared it to the failed UST asset of Terra Luna on the cryptocurrency Twitter community.
The cryptocurrency exchange Binance is trying to allay concerns about its new "BFUSD" token, emphasizing that it is not a stablecoin and has not yet been launched.
In a post on November 19 on X, the Zoomerfied news site reported that Binance will launch a stablecoin with an annual yield of 19.55%, causing many to compare it to the failed algorithmic stablecoin of Terra, now known as TerraClassicUSD.
Binance later clarified that BFUSD is actually an unreleased leveraged trading reward product. "BFUSD has not been launched. To be clear, it is not a stablecoin but a leveraged trading reward asset," the Binance customer support team explained.
According to Binance's official information page, users will be able to use BFUSD as collateral without the need for "staking or locking" funds. Instead, users will hold BFUSD in the "UM wallet" and receive daily rewards through Airdrop based on their VIP ranking on the Binance platform.
Before Binance clarified, many in the cryptocurrency community had quickly compared BFUSD to Do Kwon's failed algorithmic stablecoin, which had promised a 20% yield. Some have also expressed skepticism about the mysterious source of profits similar to Terra.
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The article Binance clarifies that BFUSD is not a stablecoin first appeared on CoinMoi.
