A Brief about BUSD-Margined Futures Contracts

 



What is BUSD?

BUSD is a regulated, fiat-backed stablecoin pegged to the U.S. dollar. For every unit of BUSD, there is one U.S. dollar held in reserve. In other words, the supply of BUSD is pegged to the U.S. dollar at a 1:1 ratio. Holders can swap their tokens for fiat and vice versa. Paxos, the project’s owner, releases monthly audits of BUSD’s reserves.

As a stablecoin, BUSD is designed to maintain a stable market value. It allows investors and traders to hold a low-volatility asset on the blockchain without the need to exit the crypto space.

Introduction

If you’ve purchased or traded crypto with Binance, you’ll likely have already come across BUSD. The token is common among the trading pairs Binance offers on its exchange. In short, BUSD acts as a digital version of the U.S. dollar and is pegged at its value.

For newcomers, it’s not always obvious why traders and investors hold BUSD. The role of BUSD and other stablecoins is, however, an essential part of the crypto ecosystem.


BUSD-Margined contracts

Binance Futures has launched BTCBUSD Perpetual Contracts, users will be able to select leverage. The BTCBUSD Perpetual Contracts are BUSD-margined futures contracts that use BUSD as collateral, quoted and settled in BUSD.

A BUSD-Margined contract is a contract that uses BUSD as a margin for position opening and Profit and loss settlement (P&L).

In this case opening a trade requires you having BUSD as your available margin, whereby linear futures are quoted and settled in BUSD.

Examples of  BUSD-MARGINED Contracts includes; BTC/BUSD, BNB/BUSD.

How to trade?
  1. Transfer BUSD to futures wallet.


2. Search “BTCBSUD Perpetual” and click to trade.


BUSD-Margined contracts available on Binance Futures

After explaining BUSD-Margined Contracts above, it will be nice to get acquainted with the available BUSD Pegged Contracts on Binance Futures.

BUSD-Margined future Contracts are found in Binance futures interface when you click on BUSD Perpetual option.

They include; BTC/BUSD, BNB/BUSD, ETH/BUSD, XRO/BUSD, DOGE/BUSD etc.


Advantages of trading BUSD-Margined contracts 

The following are the advantages of BUSD Futures Contracts.

  • Trading fee discounts and maker abatement

Trading BUSD-margined contracts incurs lower fees. For example trading ADA/BUSD, BTC/BUSD will incur lower fees unlike other pegged contracts.

This sweet discount will be valid till September 7th, 2021.

The fee structure for all VIP levels is given below;

Maker: -0.0100%

Taker: 0.0170%

  • Easy to calculate Profits and Loss (P&L)

BUSD as said earlier is pegged to U.S. dollar which means that, 1 BUSD will always be equal to $1 USD (1:1).

Therefore, it will be easy to calculate your fiat money trading BUSD futures contracts.

For example, checking the exchange rate of 1USD to the value of your desired currency (Fiat money) can be  confidently used to determine your fiat money in BUSD since BUSD (Binance USD) is a regulated stable coin pegged to the U.S. dollar.

  • No conversion Charges

Converting your assets to BUSD is free of charge, no extra charges are incurred when converting from either USDT to BUSD or other assets to BUSD.


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