USDT Perpetual Contract Introduction

Margin

USDT standard perpetual contracts, across all varieties, use the denominated currency USDT as collateral assets. Users only need to hold USDT to participate in trading any of the contract varieties. Currency-based perpetual contracts, on the other hand, use the underlying currency as the collateral asset. Users need to hold the corresponding currency to trade the specific contract symbol. For example, in the BTC/USD currency-based perpetual contract, users need to transfer BTC as the collateral asset.

Due to the different currencies used as collateral assets, the risk of collateral depreciation varies between the two contract types when prices fall. In the case of the BTC/USD currency-based perpetual contract, a higher collateral requirement is imposed on the user's position, necessitating the holding of more BTC as collateral. However, for the USDT standard perpetual contract, the value of the USDT collateral asset remains unaffected because the required collateral is USDT.

Valuation Unit

A USDT standard perpetual contract is denominated in USDT, while a currency-based perpetual contract is denominated in US dollars. Consequently, the index prices between the two also differ. For example, the BTC/USDT index price is derived from the BTC spot price against USDT on each exchange, whereas the BTC/USD currency-based perpetual contract's index price is derived from the BTC spot price against USD on each exchange.

Contract Face Value

The face value of each USDT standard perpetual contract is expressed in the corresponding underlying currency. For instance, the BTC/USDT contract has a face value of 0.001 BTC.

Profit and Loss Currency

All varieties of USDT standard perpetual contracts calculate profits and losses in the denominated currency USDT. Currency-based perpetual contracts, on the other hand, calculate profits and losses in the underlying currency.