Terra

Crypto exchange Binance has attempted to cool some concerns over its new high-yield&nbsp; “BFUSD” token — clarifying that it is not a stablecoin nor has it launched.&nbsp;
In a Nov. 17 <a data-ct-non-breakable="null" href="https://x.com/zoomerfied" rel="null" target="null" text="null" title="null">post</a> to X, crypto news aggregator Zoomerfied told users that Binance would be launching a stablecoin with a 19.55% annual yield, sending many on X to make comparisons to Terraform Lab’s failed algorithmic stablecoin, now known as TerraClassicUSD (<a data-ct-non-breakable="null" href="https://cointelegraph.com/terraclassicusd-price-index" rel="null" target="null" text="null" title="null">USTC</a>).
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 <img alt="Stablecoin, Terra, Do Kwon" src="https://s3.cointelegraph.com/uploads/2024-11/019342e1-abb4-7e57-b5d2-f5bea357bf0b" title="">
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 Source: <a data-ct-non-breakable="null" href="https://x.com/zoomerfied" rel="null" target="null" text="null" title="https://x.com/zoomerfied">Zoomer</a>
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Binance confirmed in a comment on X that BFUSD is actually an unreleased reward-bearing margin trading product.&nbsp;
“BFUSD is not yet launched. To be clear, it is not a stablecoin but a reward-bearing margin asset for futures trading,” said Binance Customer Support in response.&nbsp;
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 <img alt="Stablecoin, Terra, Do Kwon" src="https://s3.cointelegraph.com/uploads/2024-11/019342e2-512d-7eaf-b18e-6fd12f73d85b" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/BinanceHelpDesk/status/1858613807494688975" rel="null" target="null" text="null" title="https://x.com/BinanceHelpDesk/status/1858613807494688975">Binance Customer Support</a>
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According to the asset’s official launch <a data-ct-non-breakable="null" href="https://www.binance.com/en-AU/futures/BTCUSDT" rel="null" target="null" text="null" title="null">page</a> on Binance, traders will be able to deploy BFUSD as collateral without “staking or locking up” their funds.&nbsp;
Instead, traders will hold the BFUSD asset in a “UM wallet” and accrue daily airdrops sent to their “UM Futures Wallet” based on snapshots, and users will have a limited quota of BFUSD based on their social ranking, dubbed their “VIP level,” on the Binance platform.
Before Binance clarified, many crypto commentators quickly drew parallels to Do Kwon’s <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/terra-luna-crash-anniversary-community-reflects-on-the-lessons-learned" rel="null" target="null" text="null" title="null">now-defunct algorithmic stablecoin</a>, which once promised a 20% yield.
“How...how much did Anchor... did.... Yield?” asked pseudonymous trader RunnerXBT. Anchor was the protocol responsible for delivering a 20% yield on Terra Luna’s algorithmic stablecoin.
“Can we not?” he added moments later.&nbsp;
In May 2022, the price of the then-$18-billion stablecoin USTC <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/breaking-terra-blockchain-officially-halted-following-luna-price-collapse" rel="null" target="null" text="null" title="null">plummeted from its $1 peg</a> to below $0.01 in less than a month as the Terra Money ecosystem experienced the decentralized finance (DeFi) <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/analysts-assess-the-aftermath-of-the-terra-luna-collapse-cointelegraph-interview" rel="null" target="null" text="null" title="null">equivalent of a bank run</a>, with thousands of users rushing to withdraw their tokens all at once.&nbsp;
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/quantoz-eurq-usdq-micar-stablecoins-launch" rel="null" target="null" text="null" title="null">Tether, Kraken, Fabric Ventures back new MiCA-compliant stablecoins</a>
UST was part of a broader ecosystem of tokens, including Terra (<a data-ct-non-breakable="null" href="https://cointelegraph.com/terra-price-index" rel="null" target="null" text="null" title="null">LUNA</a>), its companion asset that was supposed to stabilize UST’s peg. Similarly, LUNA plummeted from a price of $80 to below $0.001 within a week.&nbsp;
Several other users also appeared to suffer immediate flashbacks to lofty promises with a mysterious source of yield.&nbsp;
“Are we the yield?” <a data-ct-non-breakable="null" href="https://x.com/TraderYunt/status/1858580936914620687" rel="null" target="null" text="null" title="null">asked</a> another user.&nbsp;
The initial post also raised eyebrows for OG Bitcoiner Jameson Lopp.
<figure>
 <img alt="Stablecoin, Terra, Do Kwon" src="https://s3.cointelegraph.com/uploads/2024-11/019342e0-efff-7a26-bbd6-1a56f050fb45" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/lopp/status/1858609316929974340" rel="null" target="null" text="null" title="https://x.com/lopp/status/1858609316929974340">Jameson Lopp</a>&nbsp;
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Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/hype-ai-agents-crypto-just-turned-into-reality/" rel="null" target="null" text="null" title="null">AI agents trading crypto is a hot narrative, but beware of rookie mistakes</a>

Binance clarifies BFUSD isn’t a stablecoin as X gets Terra flashbacks

Cointelegraph

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