The differences between USD-M Futures and Coin-M features
- Different pricing units. USD-M Futures are denominated in USDT. COIN-M futures are a type of derivative that derives value from an underlying cryptocurrency.
- The types of assets that act as collateral vary. All varieties of USD-M Futures use the valuation variety USDT as a security asset, and users only need to hold USDT to participate in the transaction of various different contract types. The currency standard contract takes the underlying currency as the guarantee asset, and the user needs to hold the corresponding underlying currency to participate in the contract transaction. For example, the BTC/USD coin-based perpetual contract requires the user to transfer to BTC as a guaranteed asset. Because of the different types of collateral assets, the risk of depreciation of the collateral assets of the two contracts is also different when the price falls. The assets covered by Coin-M Futures will be affected by the rise and fall of the price of the corresponding currency; The guaranteed asset required by the USD-M Futures is USDT, and the rise and fall of the currency price will not affect the value of the USDT guaranteed asset.
- There are different types of profit and loss calculation. USD-M Futures All variety contracts use the valuation variety USDT to calculate profit and loss; Coin-M Futures are based on the calculation of profit and loss of the underlying variety.
For users, choosing between the two not only depends on the user's personal preferences, but is also based on the current market situation as a whole. For example, USD-M FUTURES can effectively reduce the risk of large price fluctuations when the market is highly volatile. Compared with Coin-M features, USD-M FUTURES can effectively reduce the risk of large price fluctuations in times of severe market volatility. This is because USD-M FUTURES are denominated and settled in USDT, and the prices of these stablecoins are usually more stable than cryptocurrency prices. In the event of large price fluctuations, the settlement currency of USD-M FUTURES can stabilise the value of the contract, thus reducing the risk to investors. In addition, USD-M FUTURES' settlement currencies make trading more intuitive. For example, the value of one USDT is almost equal to 1 USD, which makes it easier for investors to calculate their gains or losses. During trading, USD-M FUTURES use a common settlement currency (e.g. USDT) for pricing and settlement, which also increases trading flexibility. At the same time, multiple contracts can use the same settlement currency and there is no need to purchase base tokens as margin for contract positions, thus saving cost. It is also important to note that when going long, the returns on USD-M FUTURES are less than those on Coin-M Futures, but USD-M FUTURES are less risky. When short, the return on USD-M FUTURES is greater than the return on Coin-M Futures, but the risk on USD-M FUTURES is greater. In conclusion, both USD-M FUTURES and Coin-M features have their own advantages and characteristics. Investors can choose the contract type that suits them according to their risk tolerance and investment objectives.
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