1. Product definition
Index Futures is a derivative contract that supports any digital currency as the settlement unit. Users can directly use the tokens they hold (such as ET, SHIB, TRUMP, BONK, etc.) as the margin, and conduct long-short transactions with the index price of mainstream assets (BTC/ETH) as the target. The profit and loss are directly settled by the number of margin tokens.
Core features:
Multi-currency settlement: Supports using minor currency tokens as contract margin and using these tokens for profit and loss settlement.
Index price anchoring: based on the real-time index price (weighted average price of multiple exchanges) of mainstream currencies such as BTC/ETH.
Go to USDT: there is no need to transit through stable currency in the whole process, which reduces the cost of exchange rate friction.
Leverage: Leverage amplification of a specific digital currency can be achieved at only a fraction of its total cost. With the help of leverage, you can amplify small price changes and get benefits.
Term of contract: perpetual contract
Lever type: warehouse by warehouse/all warehouses
Note: The specific supported margin currency is subject to the platform configuration.
2. The detailed explanation of the core mechanism
2.1. Description of Index Futures process
(1) Transfer of assets into a full-currency contract account.
Transfer the target token (such as SHIB) from the spot account.
Example: deposit 10000SHIB.
(2) Select the currency of the anchored index price.
If the selected index is BTC/USDT index price.
(3) Set the lever multiple/position mode
If you choose 10 times lever, full warehouse mode.
(4) Confirm the opening quantity and direction.
Such as opening a position of 500000SHIB, and opening more.
To sum up: select BTC/USDT index, open position price: 100000USDT, with SHIBBI as margin currency, open position mode: full position, leverage multiple: 10 times open position quantity: 500000 SHIB direction: long position.
(5) Position management
Monitor the price fluctuation of anchor currency in real time, and take the opportunity to close the position.
(6) liquidation operation
According to the index price of BTC/USDT, take the opportunity to close the position.
Example: When the price of BTC/USDT index rises to 110000USDT, unrealized profit and loss: 50000 SHIB, choose to close the position at this time.
(7) domestic currency settlement
The profit and loss are directly settled by SHIB, and the funds are immediately received.
Realized profit and loss of settlement: 50000 SHIB
Note: The above is the main process description, and the actual operation will be affected by handling fees, position fees and price spreads.
2.2. Core parameters and formulas
| parameter | Calculation formula/explanation | Example (A settlement) |
| initial margin | Number of positions opened/leverage multiple | 1000 A/10 = 100 A |
| Unrealized profit and loss | Go long: Unrealized profit and loss = [latest index price-average price of opening index]/average price of opening index * number of positions. Short selling: Unrealized profit and loss = [average price of opening index-latest index price]/average price of opening index * number of positions. | Go long, open a position of 1000 A, and the average price of the bitcoin index is 100000USDT T. The latest bitcoin index price is 110,000 USD. Unrealized profit and loss = (110000-100000)/100000 * 1000 = 100000. |
| Realized profit and loss | Go long: realized profit and loss = [closing index price-average opening index price]/average opening index price * positions. Short: Unrealized profit and loss = [average price of opening index-price of closing index]/average price of opening index * number of positions. | Go long, open a position of 1000 A, open a position with an average price of 100,000 USD T, close a position with a price of 110,000 USD. Unrealized profit and loss = (110000-100000)/100000 * 1000 = 100000. |
Note: The above formula is only the core formula, and it will actually be affected by the expenses of formalities, positions and price spreads (slippage).
3. product advantages and risks
Advantages:
Frictionless cross-currency transaction: directly use shanzhai currency to participate in mainstream asset speculation, without exchanging USDT.
High capital utilization rate: when users hold bullish currencies with small market value, they can use them as margin to establish low-volatility mainstream currency contract positions, so as to realize the double appreciation of position appreciation and arbitrage income.
Risk:
Risk of currency fluctuation: If the price of A/USD plummets, the USD value of total assets may shrink even if the user makes a profit in BTC direction.
Influence of leverage ratio: high leverage will amplify profit and loss, so it needs to be set carefully.
4. Suggestions on applicable scenarios
Small currency holders: use idle shanzhai coins to participate in BTC/ETH trend trading and obtain excess returns.
Long-term bullish positions: select currencies with high volatility and small market value to establish spot long positions, and implement cross-product leveraged arbitrage through the price inertia characteristics of the mainstream currency low liquidity contract market.