Binance launched a new product called BTC Yield on the Earth Board for users who already hold Bitcoin. The product does not require the user to sell the BTC, but rather to use the bitcoin deposited as collateral for the systematic sale of BTC to see an increase in options to obtain additional revenue.
The product works by selling up options.
Such practices are part of a readiness-for-tat strategy that is more common in both traditional financial and encrypted markets. Participants used spot assets as a base position, while selling the corresponding increase options. If the right of option is not exercised, the seller may retain the right money; if the price of a bitcoin increases too quickly and triggers the right to move, the strategic gain will be limited.
Binance is responsible for the implementation of specific operations in the product, including the sale of options, the processing of royalties and the distribution of proceeds, without the need for users to manage their own options positions. CoinDesk reported that this meant a more specialized option-benefit strategy, packaged into exchange products in which ordinary currency users could also participate.
Proceeds are distributed weekly and net Tired. Jack.
BTC Yield's potential returns come mainly from two parts:
- Some of the money will be converted to bitcoin.
- The related proceeds will be released on a Friday to the user's spot Accounts Household
- And the other part of the money stays within the strategy.
With the increase in retention rights, the actual amount of bitcoin per BTCY unit will gradually increase. The number of BTCs recovered may be higher than the initial corresponding share when the user is redeemed, which constitutes the potential benefit of the second part.
The return on the rise may be limited.
Such products do not provide a fixed return. It was mentioned that if the price of bitcoin clearly went up, the sale of an increased option might be subject to the right to do so, which would limit the upper space available to users. This is also the most common trade-off in the reserve-for-up strategy: a part of the gain is raised in exchange for relatively stable rights-based income.
Binance Shunyet Jan, Head of Exchanges and Transactions, states that the readiness strategy has long existed in traditional financial markets, but that the general user is directly involved in the threshold Higher, BTC Yield aims to simplify these income-type strategies to Bitcoin holders.
Traditional management is also putting together similar products.
CoinDesk mentioned in the report that traditional financial institutions had recently promoted similar thinking. BlackRock recently introduced a bitcoin-based ETF, which also seeks additional returns for its holders through a stand-by-up strategy.
As exchanges and regulatory agencies simultaneously advance such products, the bitcoin revenue strategy is moving from professional options to more standardized retail and institutional product patterns.