# Currency Standard Perpetual Contract

## **Margin and Contract Specifications**

### **1. Margin Currency**

#### **USDT-Margined Perpetual Contracts**

* Use **USDT** as the margin and settlement currency.
* Users only need to hold **USDT** to open and maintain positions across all contract types (e.g., BTC/USDT, ETH/USDT).
* Collateral value remains stable, as USDT is a stablecoin.

#### **Coin-Margined Perpetual Contracts**

* Use the **underlying asset** (e.g., BTC) as the margin.
* Users must **hold and deposit the corresponding coin** to trade (e.g., BTC for BTC/USD contracts).
* Collateral value fluctuates in tandem with market prices, introducing an additional layer of risk.

### **2. Risk Exposure from Collateral Depreciation**

Due to the differences in collateral currencies, the **risk exposure during a market downturn** differs:

* In **coin-margined contracts**, if the price of the underlying asset drops (e.g., BTC), the required margin in BTC **increases**, and the value of the held collateral **decreases**, amplifying risk.
* In **USDT-margined contracts**, the value of the collateral (USDT) remains constant in USD terms, providing **greater stability** in volatile markets.

### **3. Valuation Unit**

* **USDT-margined contracts** are **denominated and settled in USDT**.
* **Coin-margined contracts** are **denominated in USD** but **settled in the underlying asset**.

#### Example:

* **BTC/USDT**: Uses BTC/USDT spot price as its index, calculated from BTC-to-USDT trades across major exchanges.
* **BTC/USD**: Uses BTC/USD spot price from exchanges quoting BTC in USD.

### **4. Contract Face Value**

* **USDT-Margined Contract**:\
  Each contract represents a fixed quantity of the **underlying asset**.\
  Example:

$$
\text{BTC/USDT Contract Face Value} = 0.001\ \text{BTC}
$$

* **Coin-Margined Contract**:\
  Each contract is typically valued in **USD terms**.\
  Example:

$$
\text{BTC/USD Contract Face Value} = 100\ \text{USD}
$$

### **5. Profit and Loss Settlement Currency**

* **USDT-Margined Contracts**:
  * Profit and loss (PnL) are **calculated and settled in USDT**.
* **Coin-Margined Contracts**:
  * PnL is **calculated and settled in the underlying coin**.
  * For example, profits from a BTC/USD contract are settled in **BTC**.

### **Summary Table**

<table><thead><tr><th width="227">Feature</th><th width="236.2000732421875">USDT-Margined Contracts</th><th>Coin-Margined Contracts</th></tr></thead><tbody><tr><td><strong>Collateral Currency</strong></td><td>USDT</td><td>Underlying Coin (e.g., BTC)</td></tr><tr><td><strong>Price Stability</strong></td><td>Stable</td><td>Volatile (coin-dependent)</td></tr><tr><td><strong>Settlement Currency</strong></td><td>USDT</td><td>Underlying Coin</td></tr><tr><td><strong>Valuation Unit</strong></td><td>USDT</td><td>USD</td></tr><tr><td><strong>PnL Settlement</strong></td><td>USDT</td><td>Underlying Coin</td></tr></tbody></table>