TL;DR
- BounceBit closed a bitcoin derivatives trading operation using BUIDL as collateral, achieving an annualized return of over 24%.
- The strategy combined a basis trade, put option selling, and BUIDL token yield, outperforming returns from stablecoin-backed schemes.
- The project plans to offer this model to institutional and retail users through BB Prime, its new line of CeDeFi products.
BounceBit announced the successful execution of a bitcoin derivatives trading strategy using BUIDL, BlackRock’s tokenized fund, as collateral.
The operation combined a basis trade with BTC put option selling, reaching an annualized yield above 24%. The company confirmed it will soon offer this model to institutional and retail investors as part of its upcoming product line, BB Prime.
Higher Returns Than Stablecoins
The basis trade, which involves holding a long position in the spot market while shorting futures, generated a 4.7% annualized yield. This was supplemented by a 15% return from selling put options and an additional 4.25% from the yield of BUIDL used as collateral. This combination delivered a return higher than that of strategies backed by stablecoins, which typically don’t generate additional yields.
Jack Lu, founder and CEO of BounceBit, pointed out that this strategy enables users to combine Treasury bond yields with arbitrage profits from derivatives markets. He also emphasized that the model links traditional asset issuers in the West with crypto infrastructure and operators in Asia, providing more options for yield generation in markets that have historically operated in isolation.
BounceBit Expands the Utility of Tokenized Assets
BounceBit is a network specialized in bitcoin restaking, with over $500 million currently locked on its platform. The project allows BTC holders to earn yields through native validator staking, decentralized finance services, and CeFi-style products supported by providers like Ceffu and Mainnet Digital.
The integration of BUIDL as collateral addresses one of the key limitations of tokenized fixed-income assets: their limited utility beyond delivering Treasury bond returns. This new strategy proves that these instruments can be incorporated into trading and arbitrage schemes, increasing their appeal to investors through expanded use cases.
Launched in March 2024, BUIDL operates on networks like Ethereum, Aptos, and Polygon. It’s backed by short-term U.S. Treasury bonds and maintains a stable value of $1 per token. Its current market capitalization exceeds $2.88 billion.
