BounceBit Pilots Bitcoin Trading Strategy Using BlackRock’s BUIDL as Collateral
BounceBit, a crypto infrastructure provider blending CeFi and DeFi features, has successfully implemented a bitcoin (BTC) derivatives trading strategy leveraging BlackRock’s BUIDL tokenized money market fund to boost returns. This strategy, soon to be offered to institutional and retail clients, combines a bitcoin basis trade and short BTC put options, both secured by BUIDL tokens.
The basis trade, a long spot/short futures approach (cash and carry arbitrage), yielded an annualized 4.7%. Shorting put options added another 15%, resulting in a total return exceeding 24% when combined with BUIDL’s 4.25% return. Using BUIDL as collateral proved superior to stablecoin-collateralized strategies due to BUIDL’s yield-generating nature.
BounceBit’s CEO, Jack Lu, highlights the strategy’s ability to capture both Treasury Bill yields and funding rate arbitrage returns. He emphasizes BounceBit’s role in bridging Western real-world asset issuers with Asian crypto trading infrastructure, opening new yield generation avenues.
BounceBit’s native BTC restaking chain, secured by staked bitcoin and BounceBit tokens, allows BTC holders to earn yields through validator staking, DeFi ecosystem participation, and a CeFi-like mechanism powered by Ceffu and Mainnet Digital. Currently, over $500 million in crypto assets are locked on the BounceBit network.
The successful pilot program serves as a proof of concept for BounceBit’s upcoming BB Prime product line, designed for both retail and institutional users. BB Prime represents a novel category of CeDeFi applications built upon real-world assets (RWAs). The company believes this strategy addresses the limited utility and hindered mass adoption often associated with RWAs traditionally held solely for treasury bill yields.
BUIDL, a tokenized investment fund launched in March 2024 by Securitize and BlackRock, operates across multiple blockchains including Ethereum, Aptos, and Polygon. Backed by short-term U.S. government bonds, its value is pegged at one dollar per token, and it currently boasts a $2.88 billion market cap.
