What is sustainable future?

*What is sustainable future?

Perpetual futures are derivatives used to invest in digital currencies, similar to traditional futures futures. The biggest difference is that the perpetual future has no expiry date or settlement date. Users only need to focus on buying up (long) or down (short), which is more convenient to use and provides greater functionality than traditional futures contracts. of leverage.

In order to ensure long-term convergence between the perpetual future price and the mark price, we use the "Funding Rate" to balance the price. Perpetual futures have the following key concepts to note:

Mark Price: To avoid market manipulation and ensure that the perpetual future price matches the spot price, we use the mark price to calculate unrealized P&L for all traders.

Initial & Maintenance Margin: Traders should be very familiar with initial and maintenance margin ratios, especially maintenance margin. Once the user's margin falls below the maintenance margin, the system will force liquidate the position. It is strongly recommended that you close your position when it is above the maintenance margin ratio to avoid higher fees due to forced liquidation.

Funding rate: Fund settlement between all long and short positions in the perpetual future market. The payer and receiver of the funding rate are determined by the positive or negative nature of the rate: if the rate is positive, longs pay funds to shorts; if it is negative, shorts pay funds to longs.

Risk: Unlike the spot market, the future market allows traders to trade in excess of their principal, that is, there is leverage. BiFinance supports a maximum future leverage of 125 times. Traders need to carefully evaluate their risk tolerance and choose an appropriate leverage ratio.

We have a series of policies and measures to prevent traders from going bankrupt and protect the interests of the exchange, which we will explain further in future articles.