BounceBit, a centralized Bitcoin restaking protocol that offers institutionalized DeFi investing products, today announced the launch of a new dual-yield strategy through a partnership with BlackRock’s BUIDL.
BounceBit partnered with BlackRock’s Tokenized Fund, popularly known as BUIDL, to integrate BlackRock’s yield-bearing US Treasury bill into its platform.
What is this dual-yield strategy?
This dual-yield strategy is a Bitcoin derivative trading strategy powered by BlackRock’s income-generating tokenized money fund, BUIDL, to enhance profitability.
The strategy, which is set to be introduced to retail and institutional investors, is made up of two key components: a short position in Bitcoin BTC put options and a Bitcoin basis trade that capitalizes on longing in the spot market and shorting in the futures market, both collateralized by BUIDL assets.
As per the report, the basis trade generates an annual return of 4.7% while the put option produces an extra 15%. Together with the 4.25% yield from BUIDL utilized as collateral, the entire return is over 24%.
According to a BounceBit representative, the move to integrate BUIDL is significantly beneficial as it helps produce greater gains than strategies collateralized by stablecoins. This strategy enables investors to capture both Treasury bill returns and Bitcoin derivatives yields.
The role of real-world assets in DeFi
The partnership is important it has paved the way for institutional and retails investors to use the BlackRock’s tokenized money market fund as a collateral for BounceBit’s dual-yield investment product accessible across the globe.
With this partnership, BounceBit provides a solution that allows global investors to gain US market exposure through US Treasury yields while also earning returns from Bitcoin derivatives trading strategies.
This integration comes at a time when global users, including Asian clients, are increasingly looking to interact with the US markets.
This dual-yield strategy is set to play an essential role in BounceBit’s ecosystem, which merges the benefits of centralized finance and DeFi.
This collaboration strengthens BounceBit’s status as a major player in DeFi adoption. By incorporating its centralized DeFi system with RWA (real-world asset) collateralization, the platform is creating opportunities for investors to engage with profit-generating products through the traditional finance system.
