Dear 58COIN users,
In May 2018, the industry was caught in the enthusiasm of “transaction & mining”. In the first half of 2019, “IEO” became the new market favorite. However, 58COIN did not choose to follow the trends and constantly tried their best to empower digital asset derivatives through “Blockchain + Finance”. Along the way, 58COIN innovated the traditional delivery contract and first launched “perpetual contract”. Although the digital contract is not exclusive to 58COIN, the contract market is developing towards the positive side because of 58COIN’s efforts:
1. Old-fashioned exchanges with “traditional delivery contracts” as the main products have started to launch perpetual contracts;
2. The new contract exchanges have sprung up;
3. The old-fashioned exchanges that have never been involved in “contracts” began to lay out contracts;
4. The contract platform focusing on the European and American markets has also begun to penetrate the Asian region.
The market is unprecedentedly active due to contracts, and competition among the industry is getting fierce. Therefore, industry standards are urgently needed. As a pioneer and innovator of the perpetual contract, the platform, controversial but has been running steadily for more than 600 days. We are proposing the following initiatives: The key indicator that investors are most concerned with the liquidation - maintenance margin, requires a more pertinent, more reasonable, and more scientific standard. Our recommendation is 0.5%.
Why should we develop this standard? Compared with the 0.5% standard, excessively high maintenance margin on other platforms will make the liquidation probability to 99%, this is what most investors are experiencing, resulting in unnecessary asset losses.
The reasons are: 1) investors are not aware of the true role of the maintenance margin; 2) 99% of the exchanges have not explained clearly to their users and tried to fool investors by using the omission; 3) exchanges that expect the reasonable standard choose silence.
This time, we choose to speak and break the silence.
Whether being “estimated liquidation price”, “risk level” or “margin” as the liquidation indicator, the essence is that the position will enter the liquidation process when the position margin is lower than the maintenance margin, in short, liquidation happens when the margin is lower than the maintenance margin.
Taking BTCUSD (BTC Standard Contract) as an example. Under the isolated margin model, investors use the BTC worthy of $1,000 as the margin, liquidations of multiple platforms are shown as follow (taken their published rate intervals):
Note: Since Huobi Pro irregularly adjusts the coefficient and is inconsistent with the industry's general indicators, therefore it is not included.
Seen from the above, all the main platforms contain the standard of 0.5% but the overall standard is above this, which means that users need to pay a higher margin if they want to maintain the position of the same value, and easier to be liquidated under the premise of the same margin. In the example, some platform will liquidate the position when a margin of $25 left and some will implement the liquidation even when $935 left in the margin. If the standard is unified to 0.5%, investors do not have to suffer from such non-standard losses.
More urgently, however, the actual standard of some platforms exposed to be higher than the published rate interval, which will further damage the mutual trust between investors and the trading platform, thus hinder the healthy development of the industry.
To free the investor’s efforts to study the different standards of major platforms, and to protect the interests of investors and promote the positive development of the industry, we reiterate the initiative: we hope the whole industry will jointly establish a more open and transparent, more scientific and friendly maintenance margin standard! Our recommendation is 0.5%.
To this end, 58COIN decided to take out 2,000 BTC to launch the “Contract Standard Funds” to promote the formation and development of contract market standards. From now on, all investors who encounter “non-standard liquidations” on the popular platforms due to the maintenance margin higher than 0.5%, if standards met, can apply for the “non-standard liquidation compensation” from “contract standard funds”. Please pay attention to the follow-up announcements for details.
If you hate the "Non-Standard Liquidation", or support the initiative, or need to apply for compensation, you can add the customer service WeChat, and the IDs are: Echo-jinpaixiaomi, woshitongpai, QIJI58COIN, and remark "contract standard funds".
58COIN is not afraid of controversy and is willing to work hard with the people who care, to promote the sound development of the contract market.