BFUSD (BFUSD)
BFUSD (BFUSD): Guide to the Binance-Peg BUSD Token
BFUSD (BFUSD) is the token designation for Binance-Peg BUSD, a wrapped version of the BUSD stablecoin that operates on the BNB Smart Chain (BSC) as a BEP-20 token. It was created to allow users to transact with a USD-pegged asset within the BSC's fast and low-cost environment. Each BFUSD was designed to be backed 1:1 by BUSD held in reserve, which in turn was backed 1:1 by U.S. dollars held by its issuer, Paxos. This structure made it a cornerstone of the DeFi ecosystem on BNB Chain, widely used in liquidity pools, lending protocols, and as a primary trading pair.
However, the landscape for BUSD and its wrapped derivatives like BFUSD has fundamentally changed. In February 2023, the New York Department of Financial Services ordered Paxos to cease minting new BUSD tokens. Consequently, Binance announced it would gradually phase out support for BUSD products. This directly impacts BFUSD, as its underlying asset is no longer being created. The circulating supply is expected to decrease over time as users redeem BUSD or convert their BFUSD holdings into other stablecoins like USDT or FDUSD.
Given these developments, holding BFUSD (BFUSD) carries increasing risks, including potential de-pegging and declining liquidity on decentralized and centralized exchanges. Users are strongly encouraged to monitor official announcements from Binance and consider migrating their funds from BFUSD to other stablecoins to mitigate potential losses and ensure their assets remain liquid and usable within the broader digital asset ecosystem. The primary action for holders is now to exchange or sell BFUSD rather than to buy or hold it for the long term.
Technology
BFUSD (BFUSD) functions as a BEP-20 token on the BNB Smart Chain, a blockchain known for its high throughput and low transaction fees. Its technology is not that of a native blockchain but of a wrapped asset. The process involved locking BUSD (an ERC-20 token on Ethereum) in a designated address and minting an equivalent amount of BFUSD on the BNB Smart Chain. This cross-chain bridge mechanism ensured that the supply of BFUSD was collateralized. The BNB Smart Chain utilizes a Proof of Staked Authority (PoSA) consensus mechanism, which combines elements of Delegated Proof of Stake (DPoS) and Proof of Authority (PoA) to achieve network security and performance.
Tokenomics
The tokenomics of BFUSD (BFUSD) were straightforward and tied directly to its underlying asset, BUSD. The total supply of BFUSD was designed to mirror the amount of BUSD locked on the Ethereum blockchain for wrapping onto the BNB Smart Chain. Its primary utility was to serve as a stable medium of exchange, unit of account, and store of value within the BNB Chain ecosystem. Since Paxos has halted the issuance of new BUSD, no new BFUSD can be created. The supply is now deflationary, decreasing as users convert their BFUSD to other assets. There is no governance or staking utility associated with BFUSD itself.
Ecosystem
Historically, BFUSD (BFUSD) was a vital component of the BNB Smart Chain ecosystem. It was one of the most liquid and widely integrated stablecoins for DeFi applications, including decentralized exchanges like PancakeSwap, lending platforms, and yield farming protocols. Its deep liquidity made it a preferred trading pair against countless other BEP-20 tokens. However, with the cessation of BUSD minting, its role is rapidly diminishing. Other stablecoins, such as USDT and the recently introduced FDUSD, are actively being promoted as replacements, and liquidity is migrating away from BFUSD pairs. Its position has shifted from a cornerstone asset to a legacy token that users should transition away from.
Frequently Asked Questions
BFUSD (BFUSD) is the ticker for Binance-Peg BUSD, a wrapped version of the BUSD stablecoin on the BNB Smart Chain. It was designed to be a BEP-20 token pegged 1:1 to the US dollar, enabling its use in the BNB Chain's DeFi ecosystem.
Support is ending because its issuer, Paxos, was ordered by U.S. regulators to stop minting new BUSD tokens in February 2023. As a result, Binance is phasing out all BUSD-related products, which includes the wrapped BFUSD (BFUSD) version.
You can exchange BFUSD (BFUSD) on decentralized exchanges (DEXs) on the BNB Smart Chain like PancakeSwap, or on centralized exchanges that still support it. Binance encourages users to convert their BUSD and BFUSD holdings to other stablecoins like FDUSD or USDT before support is fully removed.
Holding BFUSD (BFUSD) carries significant risks, including de-pegging from the US dollar, decreasing liquidity making it hard to sell, and the eventual delisting from exchanges. It is strongly recommended to convert your BFUSD to another stablecoin.
The main use case for BFUSD (BFUSD) was as a primary stablecoin within the BNB Smart Chain DeFi ecosystem. It was used for trading, providing liquidity to earn fees, lending, borrowing, and as a stable store of value for transacting on the network.
BUSD is the original stablecoin issued by Paxos on the Ethereum blockchain (ERC-20). BFUSD (BFUSD) is a wrapped version of BUSD created by Binance for use on the BNB Smart Chain (BEP-20). BFUSD represented BUSD locked on the Ethereum chain.
While it may still be possible to buy BFUSD (BFUSD) on some decentralized exchanges, it is not advisable. The asset is being phased out, and buying it carries a high risk of financial loss due to declining liquidity and support.
If you do not sell or convert your BFUSD (BFUSD), you risk holding an asset with very low or no liquidity, making it impossible to trade. It may also de-peg significantly from its intended 1:1 value with the USD. Binance has set deadlines for auto-conversion for remaining balances on its platform.