Binance has introduced a product for bitcoin holders who want to earn extra returns on their investment without selling any of it join BlackRock to help them maximize returns.
The product, BTC Yield, is available in Binance Earn and is designed exclusively for people who already have 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 it systematically sells BTC call options, that is, it writes insurance against price increases in BTC. The call salesperson, or writer, is compensated with a premium. Binance collects these prizes and shares most of them with participants.
This covered call approach, common in crypto and traditional finance, has typically required deep knowledge of options to execute. Binance’s version makes it accessible to regular traders by handling everything behind the scenes.
Two types of return
The product generates potential returns in two ways.
First, a portion of the collected prizes is converted to bitcoin and distributed to users’ spot accounts every Friday as a possible weekly payout.
