Binance introduced a product for Bitcoin Holders are looking to earn additional returns on their investment without selling anything, joining with companies like BlackRock to help them maximize returns.
The product, BTC Yield, is available in Binance Earn and is designed exclusively for people who already hold Bitcoin.
Users deposit their bitcoin into the product and receive an internal position called BTCY, which tracks their stake in the strategy. Everything remains denominated in BTC and the product cannot be funded with stablecoins or other assets.
Binance holds the deposited bitcoin as collateral while systematically selling BTC call options, i.e. it takes out insurance against rising BTC prices. The call seller, or writer, is paid a bonus. Binance collects these bounties and shares most of them with participants.
This covered call approach, common in crypto and traditional finance, typically requires extensive knowledge of the options to execute. Binance’s version makes it accessible to regular traders by managing everything behind the scenes.
Two types of return
The product generates potential returns in two ways.
First, a portion of the collected bounties is converted into Bitcoin and distributed to users’ spot accounts every Friday in the form of a possible weekly payment.
