USDT-Margined Contracts and Coin-Margined Contracts
Below are the key features of both types of contracts:
| Category | Coin-Margined Contract | U-Margined Contract |
| Collateral | Cryptocurrency (e.g., BTC, ETH) | USDT or USDC |
| Leverage Type | Isolated / Cross | Isolated / Cross |
Key Features of Binance Coin-Margined Contracts
• Settled in cryptocurrency: The contracts are priced and settled in the underlying cryptocurrency, eliminating the need to hold stablecoins as collateral.
• Contract multiplier: The contract multiplier represents the contract’s value. Each BTC contract represents $100, while each ETH contract represents $10.
• For example, a $1,000 BTCUSD contract is equivalent to 100 USD * 10 contracts.
• A $1,000 ETHUSD contract is equivalent to 10 USD * 100 contracts.
• Contract duration: Perpetual contracts.
Key Features of USDT-Margined Contracts
• Settled in USD-pegged assets: The contracts are priced and settled in USDT or USDC.
• Contract duration: Includes perpetual and quarterly contracts.
• Clear pricing rules: Each contract specifies the quantity of the underlying asset per unit contract, also known as the “contract unit”.
• For instance, BTC/USDT, ETH/USDT, and BCH/USDT contracts each represent one unit of their respective underlying asset, similar to the spot market.
Advantages of Coin-Margined Contracts
Binance Coin-Margined Contracts are priced and settled in cryptocurrency. For example, if you want to open a BTCUSD 1225 Quarterly Contract, you can use BTC as the initial margin.
This type of contract is an ideal choice for miners or long-term holders. Since the contracts are settled in the underlying cryptocurrency, any profits contribute to your long-term holdings. Additionally, during a bull market, the value of your collateral will increase accordingly.
You can also hedge your positions in the contract market without converting your holdings to USDT or USDC. This means you won’t need to sell your cryptocurrency at an unfavorable price.
To hedge a position, you simply open a short position in any Binance Coin-Margined Quarterly Contract. If the underlying asset price drops, the profit from your contract position will offset the losses in your portfolio.
Advantages of USDT-Margined Contracts
USDT-Margined Contracts are linear contracts priced and settled in USDT or USDC. One key advantage of using USDT or USDC as settlement is that you can estimate returns in fiat currency, making USDT-Margined Contracts more intuitive.
For example, if you earn 500 USDT, you can estimate that your profit is approximately $500, since 1
USDT is closely pegged to $1 USD.
Additionally, you can use the same settlement currency across multiple contracts (e.g., BTC, ETH, XRP). Even if you need to fund different contract positions, you don’t need to buy multiple underlying assets. Since trading with USDT or USDC eliminates the need for extra conversions, excessive fees are avoided.
Friendly Reminder: Coin-Margined Contracts are currently under development. Stay tuned!