BounceBit Pilots High-Yield Bitcoin Strategy Using BlackRock’s BUIDL Token as Collateral
BounceBit, a crypto infrastructure platform combining centralized and decentralized finance, has launched a bitcoin derivatives trading strategy that uses BlackRock’s yield-bearing tokenized money market fund, BUIDL, as collateral to boost returns.
The strategy, soon to be made available to both institutional and retail investors, consists of two key components: a bitcoin basis trade—long spot BTC paired with short futures—and selling short BTC put options. Both positions are collateralized with BUIDL tokens.
The basis trade generated an annualized yield of 4.7%, while put option writing added about 15%. Combined with the 4.25% return from BUIDL collateral, the overall yield exceeds 24%.
Using BUIDL as collateral provides a clear advantage over stablecoins, which typically offer no yield.
Jack Lu, BounceBit’s CEO, told CoinDesk, “This approach allows investors to earn returns from Treasury Bill yields alongside funding rate arbitrage.”
BounceBit serves as a native BTC restaking chain secured by staking bitcoin and BounceBit tokens, offering multiple yield opportunities through validator staking, DeFi protocols, and CeFi-like features powered by Ceffu and Mainnet Digital. The platform currently holds over $500 million in crypto assets.
The company plans to roll out the BUIDL-backed strategy soon under its new BB Prime product line, aimed at retail and institutional investors. A spokesperson said, “BB Prime represents a new wave of CeDeFi applications built on real-world assets, overcoming the typical utility limitations tied to Treasury Bill yields.”
BUIDL, launched in March 2024 by Securitize and BlackRock, is a multi-chain tokenized fund backed by short-term U.S. government bonds, maintaining a stable value pegged at $1 per token with a market cap of $2.88 billion.
