Hey there folks,
We are taking Margin Trading to the next level. And there are three big announcements regarding Margin Trading on Bitbns.
First
So far, Margin Trading has been open only for 13 cryptocurrencies on Bitbns. We are happy to announce that our users will now be able to use Margin Trade for a total of 28 cryptocurrencies. With this, Bitbns has become the world’s only cryptocurrency exchange to offer 28 digital assets for Margin Trading, which are:
BTC, ETH, XRP, XLM, EOS, ADA, LTC, USDT, TRX, BCHABC, NEO, DOGE, ETC, ONT, DOGE, ZIL, SC, ETN, POLY, GAS, DENT, XVG, DBC, NCASH, OMG, PHX, NPXS, ZRX
Second
You can now enjoy the freedom to define the rate of interest at which you want to borrow or lend funds on Bitbns. Unlike before, when the rate of interest for borrowing or lending funds was fixed for different cryptocurrencies, this update unlocks more flexibility and control for margin traders. We recommend checking the open order book, which can be found in the margin trade window, to get a rough idea of the interest rate at which you should borrow or lend margin. This is same like the open order book for trade for margin lending and borrowing. Same trade execution rules apply here.
Third
Earlier, users could take a margin loan only for the cryptocurrencies they already hold. From now on, users can take a margin loan against their net worth, even for cryptocurrencies they do not hold.
Let us take an example to understand better. Let us say you:
- Hold only 100 XRP in your crypto wallet
- Have Rs. 10,000 in your INR wallet
- Want to borrow BCHABC against your net worth
NOTE:
- We have taken BCHABC and XRP merely for demonstrative purpose. Margin Loan can be availed for any pair of cryptocurrencies from among the 28 listed for Margin Trading on Bitbns.
- The maximum value of margin loan cannot exceed your net worth. The minimum value of margin loan has been predefined for each cryptocurrency, which you can find in their respective margin trade dashboard.
Here is how Margin Trading works better after the update!
Borrow
Essentially, Net Worth = Total value (in INR) of the cryptocurrencies you hold + INR balance.
As per the preconditions listed above, your net worth is the sum of Rs. 10,000 and the value of 100 XRP in terms of INR. Assuming that the current value of 1 XRP is Rs. 30, your net worth amounts to Rs. 13,000 (10,000+3,000).
Trading and withdrawals for the amount you borrow will be paused for the period starting from the time you place the margin borrow request till the margin borrow request is executed. Once the margin loan is allocated to you, trading and withdrawals will resume like usual. You can also resume withdrawals and trading by cancelling the margin borrow open order.
We have also added an ‘Open-order Book’ in the margin trading window, which displays all open order requests related to margin borrowing and lending.
Allocation
Since different cryptocurrencies have different dynamics and factors that affect their markets, the margin loan granted could differ from crypto to crypto. A panel in the Margin Trade window would display the exact amount of margin loan to be allocated. In the same window, you get to define the rate of interest at which you to borrow or lend.
The BCHABC Margin Loan sanctioned against the value of Rs. 13,000 INR, could be upto BCHABC worth Rs. 13,000. Let’s say the margin loan sanctioned in this case is BCHABC worth Rs. 12,400. So if we go by the current BCHABC price (at press time) i.e 16,500 INR per BCHABC, you will be allocated with a loan of 0.751 BCHABC.
Any margin borrow request fulfilled partially will be cancelled after 15 minutes.
For instance — if you had applied for a loan for 0.751 BCHABC and there is a lender who can lend only 0.60 BCHABC, your order will be ‘Partially Fulfilled’, crediting your BCHABC wallet with 0.60 BCHABC. The order for the remaining 0.151 BCHABC will stay open, which will be displayed to other lenders. If within 15 minutes, another lender lends you 0.151 BCHABC, your order will be executed; and if not it will be cancelled automatically.
Settlement
You have to settle the margin loan with the same cryptocurrency that you borrowed on margin. So if you borrowed BCHABC, the margin loan has to be settled with BCHABC itself. The interest as well has to be repaid in terms of the cryptocurrency you borrow.
So if you took a margin loan of 0.751 BCHABC at 1% interest rate for 7 days, your interest per day amounts to 0.00751 BCHABC, which means the total amount to be settled after 7 days would be 0.80357 (0.751 + 7 x 0.00751) BCHABC.
For lenders, 15% of their profit will be deducted by Bitbns as commission. After the tenure of the loan completes, if a lender wishes to, he/she can renew the same loan and relend either the principal amount or the net amount (sum of principal and interest) they received.
*The rate of interest will remain the same in both the cases.
Liquidation
Here are the conditions under which Bitbns holds the right to liquidate your funds:
- If you lose 80% of the margin loan that you took (expressed in INR) or your net worth falls below the amount required to settle the margin funds, we will pause your withdrawals, and liquidate your funds with us to repay the loan with interest. Borrowers alternatively can deposit INR or crypto and get out of the liquidate zone.
- If the users have not returned the margin loan on time the interest would be keep accruing on the same and withdrawals would be paused until settled.
For more insights on Margin Trading, check out this article.
The lenders have a risk free way of earning interest on their crypto. HODL the coin you ❤
Traders have an amazing way to multiply their outcomes using margin. A profit of x can become 2x with margin.
We hope the changes we have come up with will help you make the most of Margin Trading and gain crazy profits every day!
With Love
Team Bitbns
