Introduction
1. Margin Requirements
In USDT-margined perpetual contracts, all contracts across different trading pairs use USDT as the collateral asset. Users only need to hold USDT to participate in any USDT-standard perpetual contract (e.g., BTC/USDT, ETH/USDT, etc.).
By contrast, coin-margined perpetual contracts require users to hold the underlying cryptocurrency as collateral. For example, to trade the BTC/USD coin-margined perpetual contract, the user must deposit BTC as collateral.
Collateral Risk Comparison
Due to the difference in margin currencies, the risk of asset depreciation during market downturns varies:
In coin-margined contracts (e.g., BTC/USD), if BTC falls in price, users need to provide more BTC to maintain their position, exposing them to collateral depreciation.
In USDT-margined contracts, users post USDT as margin, which remains stable in value. Therefore, the collateral is not affected by the underlying asset's price movements.
2. Valuation Unit
USDT Perpetual Contracts are denominated in USDT.
Coin-Margined Perpetual Contracts are denominated in USD.
Example:
The BTC/USDT index price reflects the average BTC price quoted in USDT across various exchanges.
The BTC/USD index price reflects the average BTC price quoted in USD across exchanges.
3. Contract Face Value
In USDT-margined contracts, the face value is based on the underlying asset.
Example:
In coin-margined contracts, the face value is typically quoted in USD.
Example:
4. Profit and Loss Settlement Currency
For USDT-margined contracts, PnL (profit and loss) is calculated and settled in USDT.
For coin-margined contracts, PnL is calculated and settled in the underlying asset.
Example:
In BTC/USDT, all profits and losses are realized in USDT.
In BTC/USD, profits and losses are realized in BTC.
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