Is the Era of "Transaction is Investment" Here? CEX Launches Interest Subsidy Battle

Original Article Title: "Breaking Down the Barriers Between Trading and Yield, CEX Wealth Management Paradigm Is Undergoing a Huge Change"

Original Article Author: Azuma, Odaily Planet Daily

Today, news about "Coinbase updating derivative rules, offering gradient subsidies to USDC used as collateral in contracts, with a maximum annualized subsidy of up to 12%" has sparked widespread discussion in the community.

Chinese KOL benmo.eth was the first to disclose this update on X, with his assessment stating: "This product is directly benchmarking against BFUSD and USDE-type funding rate products. In the current low-rate environment, rewards have already struck back. For example, if you have a $1 million USDC collateral and opened a $2 million BTC long position, then your $1 million USDC collateral will naturally carry an 8% annualized return; if your collateral is $10 million USDC and you opened a $20 million contract, then your $10 million USDC will receive a 12% annualized return. In this increasingly competitive derivative landscape, Circle, in conjunction with Coinbase, is directly cash subsidizing the major market, with the former seeking USDC in the derivative market. This move has significant strategic significance and immediately further drags the entire funding rate market into a red sea battleground."

As described, Coinbase's update actually targets Binance's BFUSD, but since it does not involve coin conversion, the model is relatively more direct.

The so-called BFUSD is a reward-based margin asset BFUSD introduced by Binance at the end of last year for exclusive contract users. Users only need to hold BFUSD to continuously earn rewards, and the stablecoin is also used as collateral for contract accounts, achieving "earn while using." As shown in the following figure, although the current basic annualized return of BFUSD is "only" 5.82%, historical data also shows numerous instances of exceeding 10%.

Coincidentally, OKX recently also launched a similar feature to break down the barrier between trading and wealth management, with a more aggressive approach—extending beyond just futures to cover spot trading as well.

On August 15, OKX announced the launch of the "Trade Account Auto Earn" feature for VIP users. This feature allows users to automatically lend assets in their trading accounts to earn rewards without affecting the assets used for staking or trading margins—most importantly, assets used for placing orders or full-margin collateral can also earn rewards automatically. This feature initially only supports USDT and is applicable to spot, futures, cross-currency margin, portfolio margin, and other account modes, with more coins gradually being made available in the future.

For a long time, due to the need for risk isolation, major centralized exchanges have generally adopted an account partition design — where the trading account and the asset management account are mutually independent (even to the extent that spot trading and futures trading under the trading account are also independent). Although there is no hindrance to fund transfer between different accounts, this isolation design has caused users to not be able to balance between "trading" and "asset management". In a typical scenario, users can choose to "trade during active hours and manage assets during idle hours," but when placing orders and opening positions, they must forego the corresponding idle asset management income.

In short, this is a "decision-making dilemma" that exchange users generally face, whether to keep their assets in the trading account ready to capture market opportunities at any time or transfer them to the asset management account to earn stable returns. Pursuing returns means that the funds cannot be flexibly used for a certain period of time, while maintaining liquidity inevitably means giving up potential interest returns.

Over the years, although users have become accustomed to this paradigm, habit does not mean perfection, and from a product perspective, there is obviously room for optimization.

As Binance, Coinbase, OKX, and other leading exchanges have successively launched targeted new features, this long-standing paradigm is being completely overturned. From a user's perspective, this means that the above "decision-making dilemma" will be broken, and funds will achieve higher utilization efficiency and interest-earning capabilities; from the exchange's perspective, this may herald that new product standards are taking shape, and the boundary between the trading account and asset management account may gradually blur, with "trading as asset management" expected to become a standard feature of exchanges in the future.

In summary, the ability to balance trading and asset management needs in a simpler way is obviously good news for countless exchange users, and all of this is benefiting from exchanges competing for users and funds — in the ongoing competition on the trading track, whoever can better empower users will win their favor. Looking ahead, with the deepening of cryptocurrency compliance, more and more new players will enter the market, and the competition on the track will only become more intense. As an ordinary user, one can only hope for "more excitement in their competition."

Original Article Link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia