AMA Recap: Huobi USDT-margined Swaps

Following on from the successful launch of coin-margined swaps in March with 24h trading volume reached world-first rank in just 2 months, Huobi launched USDT-margined swaps at the end of October to satisfy our users’ needs, as well as to enrich its product variety.

Many of you may be curious why Huobi launches the new product at this time. As what we noticed, the crypto space is getting more accepted and mature and we can see a lot of people from traditional finance investing in the crypto, like most professionals, they think more in dollar. Whereas in the old system, if we look back a few years ago, it was really popular that people who have Bitcoin wanted to get more, and their sole purpose is to accumulate more Bitcoin.

However, the crypto space is changing rapidly. The plummet in March 12 this year intensified traders’ desire for USDT-margined swaps that could be used to hedge and arbitrage by merely using USDT with comparably lower risk especially in the downward market. This seems contradictory but is one of the main reason that why Huobi launches USDT-margined swaps at this time. Today we invited Tom Wong, the COO of Huobi Futures, to share us more about this product and let’s guess how it will change the current derivatives market.

Guest Speaker Introduction

Tom Wong is the COO at Huobi Futures. He was a serial Entrepreneur before joining Huobi Group. After years of technical experience in Huawei, he started his journey in the blockchain industry first as a miner in Thunder and later moved onto starting businesses of his own. Currently, he takes the full range of operation and marketing as COO at Huobi Futures and becomes a crypto derivatives pioneer by introducing the VIP Client Sharing Program which was modeled later on across the industry.

Q&A

Q1: Could you give us a brief introduction on Huobi USDT-margined swaps?

A: OK, I will introduce the product in simple words. Similar to coin-margined swaps, USDT-margined swaps are digital asset derivatives that can be used to gain profits or hedge against risks. They have no delivery date; therefore, there is no time limit on holding period as long as no liquidation occurs.

But differently, a USDT-margined swap is margined in USDT, giving a linear payoff and a clear P&L. For those new to crypto trading, USDT-margined contracts are more intuitive. For example, when traders make 100 USDT in profit, they can directly see that this profit is worth approximately $100.

Besides, traders can open positions faster since USDT-margined swaps eliminate the need to buy the underlying coins, which also cuts down on trading fees.

Q2: What advantages do USDT-margined swaps have compared to coin-margined swaps? Is USDT-margined Swaps a better instrument than the existing futures?

A: I’d like to say that on Huobi Futures, each product has its special features so we can’t simply tell which one is better. What we do is always listen to users’ voices and keep updating the product, so that you can always find the needed products and perform different trading strategies on Huobi. Now with USDT-margined swaps, Coin-margined swaps, coin-margined futures and options, Huobi Futures has been a one-stop derivatives platform for you.

USDT-margined swaps have advantages of convenient operation and clear PnL, and it is good for shorting since the USDT margin will not get devalued in the falling trend; while coin-margined swaps are ideal products for miners who hold coins and want to hedge the risk of falling prices.

Q3: We’re curious about why Huobi introduces USDT-margined swaps and what is its strategic position？

A：After the March 12 plummet, almost all cryptocurrencies experienced a big slump, and the market shorting sentiment was high. Though coin-margined swaps can be used for shorting, users still have to bear the loss from falling margin price. However, using stablecoin USDT — an asset that has price stability characteristics, as margin, the problem can be solved. To satisfy the needs of trades and to follow the market trend, we launched USDT-margined swaps. Now on Huobi Futures, you can trade various swaps with only USDT, which could avoid the “best time delay” and the hassle of managing multiple tokens.

Q4: What are USDT-margined Swaps trading fees on Huobi Futures?

A: The normal fee rates of our USDT-margined swaps are 0.02% for maker and 0.04% for taker.

It‘s also worth to mention that we give preferential policies aiming to lower trading fees for professional and institutional traders. The best fee rates are -0.025% for maker, and 0.026% for taker, which is the most preferential among top digital assets derivatives exchanges.

You can join and enjoy the preference by depositing assets in Huobi Futures accounts or showing your VIP level from competing platforms. More details can be found here:

Q5: How many types of USDT-margined Swaps products have Huobi listed currently and what are they?

A: Users now can trade 15 USDT-margined swaps via APP, Web and API with leverage up to 125x supported, namely BTC, ETH, BCH, BSV, EOS, XRP, LTC, TRX, LINK, DOT, FIL, UNI, YFI, YFII, and BNB swaps.

To give Huobi Futures users better trading experience, we have insurance fund specific to each trading pair to reduce the clawback risks. For example, the initial insurance funds for USDT-margined swaps are vary from 100,000~500,000 USDT. You can also check the real-time insurance fund balance on our website.

More tokens are also considered to be added soon, so please stay tuned.

Q6: What are advantages of Huobi USDT-margined swaps when compared with that in other exchanges?

A: I’ll briefly introduce its main advantages here:

1. Rich experience: Our core team members are all from top investment banks, and we successfully launched coin-margined swaps and options earlier this year, which turned out to have excellent market feedbacks.

2.Low par value: the face value of each BTC/USDT swaps is 0.001 BTC, which is around 15 USDT; while for BTC/USD swaps, the face value of each contract is 100 USD.

3.Diversified functions such as switchable leverage when holding positions, follow a Maker & Taker, locked margin optimization and partial liquidation.

4. Security: Users assets safety is our top concern. Huobi protect methods include cold and hot wallets separation, multi-signatures, anti-DDOS protection systems.

5. User-friendly mechanism: We will never reduce the positions of profitable users and we promise no clawback will be triggered as long as the insurance fund is positive.

Q7: Are there any events to welcome the launch of USDT-margined swaps on Huobi?

A: Of course, to feedback communities, we hold an activity that you will not want to miss it. There is a $100,000 prize pool to be shared until Nov.15.

To enter, users could complete Huobi USDT-margined swaps related tasks such as open the service and trade, and points will be awarded for each completed task. The higher the points, the higher the award will be at the end. Activity included USDT-margined swaps are BTC, ETH, BSV, LINK, DOT, UNI, FIL, YFI and BNB.

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