BounceBit, a cryptocurrency infrastructure provider, has initiated a robust bitcoin derivatives trading strategy using BlackRock’s yield-generating fund, BUIDL, to enhance investor returns.
Strategy Overview:
- BounceBit executed a successful bitcoin basis trade combined with short positions in BTC put options, with both involving BUIDL tokens as collateral.
- The strategy aims to boost yields beyond those earned in stablecoin collateralized strategies.
- Soon, this trading method will be accessible to both institutional and retail users, creating a new segment of CeDeFi applications.
Key Highlights:
- The basis trade generated an annual yield of 4.7%, augmented by a 15% contribution from put option writing, leading to a total yield surpassing 24%.
- Utilizing BUIDL as collateral significantly outperforms traditional stablecoin strategies, which offer no returns.
Insights from Leader:
Jack Lu, BounceBit’s CEO mentioned:
“This strategy allows investors to capture both Treasury Bill yields and funding rate arbitrage returns.”
BounceBit represents a connection point between traditional asset issuers in the West and crypto markets in Asia, focusing on yield generation options. BUIDL, launched in March 2024 and supported by short-term U.S. government bonds, boasts a market cap of $2.88 billion, with its value pegged at one dollar per token.
