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

Feature	USDT-Margined Contracts	Coin-Margined Contracts
Collateral Currency	USDT	Underlying Coin (e.g., BTC)
Price Stability	Stable	Volatile (coin-dependent)
Settlement Currency	USDT	Underlying Coin
Valuation Unit	USDT	USD
PnL Settlement	USDT	Underlying Coin