Introduction

One of the fastest developing payment methods across the crypto ecosystem is BUSD, a new concept and a future contract available on Binance. It is considered as tenth most prominent cryptocurrency in the market. It is the third-most stable coin in the crypto ecosystem. If you haven't heard this concept of future contracts on Binance, you might be wondering what the main feature of BUSD is?

BUSD is a USD-backed stable coin and is pegged as each BUSD to one USD. It is one of the faster ways to trade your funds. It is accepted as a medium of exchange and payment method across the crypto ecosystem. It is one of the best revolutionary products and is a novel addition to Binance. But how? Let me explain the concept of BUSD-margined futures contracts in more detail.

BUSD-Margined contract demands to own a BUSD as a stable coin to do everything on this contract. Suppose you want to open positions on specific perpetual contracts. In that case, BUSD is required, and you cannot open margin positions without having this stable coin. Other than this, if you want to add a margin to your positions or manage your profit or loss position or wish to settle maintenance fees in your BUSD-Margined contract. BUSD is the centre of all these requirements. 

How does a BUSD-margined contract works?

BUSD-Margined contracts are a type of futures product that is quoted, collateralized and settled in BUSD. These make the entire transaction process reasonably easy and can ease the method of calculating into USD. As a user, you don't need to spend extra effort to learn BUSD-margined contracts and is easy to use, just like USDT-margined contracts.

Here are some of the characteristics that BUSD-Margined perpetual contracts can offer you:

● There is a universal settlement currency across the BUSD-Margined futures product line. All the contracts are denominated and settled in BUSD.

● There is no need to keep a record of various delivery months like the traditional future contracts. You can hold your positions without an expiry date.

● It prevents the continuing divergence in the price of the spot as every eight hours. You can pay funding rates either to the long or short based on differences with the spot right.

● There are clear pricing rules, and each future contract will specify the base asset's quantity delivered for a single contract known as the contract unit.

Types of BUSD-Margined Contracts

BUSD-Margined contracts can be opened on different modes and include different assets, including BTC, DOGE, and BNB. BUSD-Margined contracts include two types, including isolated and cross variants.

✔         The isolated Margin Mode

The preference for this type is common due to its stand-alone nature. It involves the phenomenon which says that there is no need to worry about NUSD in your future account once you open this model. Once you use the BUSD margin to open your position in isolated margin mode, you cannot take it out unless or until you decide to close the entire trade.

Suppose you want to add or remove the margin after opening a margin contract. In that case, it will depend on the status of the position and available BUSD margin in your futures account. You could not change it afterwards if you had open a BUSD-margined contract in isolated margin mode on specific leverage.

✔         The cross margin mode

You can also open the BUSD-margined contract in Cross margin mode. The entire BUSD is used to fuel the open positions in your future account. An open position going wrong for you can also ruin the party for others in Cross margin mode. It all depends on your equity size and worsens when all the positions look bad. There is a lower possibility of liquidating your position if you have more BUSD in your future account. To keep all the open positions active in Cross margin mode is applied only to BUSD-margined perpetual contracts. If you are planning to open a coin-margined position, then it will not work here.

Why Should You Trade BUSD-Margined Futures Contracts?

You should use a BUSD-Margined future contract for trading as it provides new perspectives and strategies to crypto-future traders.

1. Free discounts and maker rebates

If you are a trader, you can enjoy lower fees, and the maker rebated using BUSD-margined contracts. The discount period is valid for a specific time. It is applied to any trader, including BUSD such as ETH/BUSD perpetual contract or BTC/BUSD perpetual contract. 

2. Versatility

As a trader, you can open any contract in the crypto choosing and settle in a stable coin on the backend. BUSD is a universal settlement, and it allows you to trade multiple contracts such as BTC, ETH, BNB at any given time. It eliminates the need for the traders to purchase the underlying cryptocurrencies which they use for funding any future position. No exchange conversion takes place to settle. It minimizes the fee for the trader too. As a user, you can also diversify yourself across various stable coins and increase capital efficiency with the Multi-assets mode. As a user, you can also share your margin across the USD-Margined products available on Binance futures.

3. Ease of Calculating Returns

As we have mentioned above, the fiat currency price is required to peg a stable coin price. The top three most widely adopted stable coins are pegged to the US dollar, meaning one BUSD should always be equal to one USD. So, we can conclude that BUSD-margined futures trade is a straightforward way to calculate in terms of fiat money. BUSD is linked directly to the exact exchange rate of one USD and is easy for those traders who do not want to calculate the USD dollars.

Key takeaways

BUSD-Margined contracts are linear futures products collateralized and settled in BUSD. They'll make the entire transaction easy to calculate in USD or any other fiat currency. The traders can use lower fees and maker rebates using BUSD-Margined contracts. A fee discount is applied to all of the trading pairs. It includes ETH/BUSD or BTC/BUSD perpetual contracts. It is one of the fantastic options available in the world of crypto future, which you can choose to trade futures contracts.

Interested in starting your Futures Journey?

• Join Binance: Click Here
• Trade Binance Futures: https://www.binance.com/en/futures