CoinEx丨Amid the Mayhem in Leveraged Tokens, CoinEx Outperforms Its Counterparts
In 2010, a systematic spot trading system began to emerge for cryptocurrency when cryptocurrency occupied only a small capital volume with a limited number of users. At the same time, the currency prices fluctuated wildly, and it was like taking a rollercoaster ride for crypto holders. Since 2013, based on the value of cryptocurrency itself, derivatives have gradually shown their edge with the functions to hedge risks, achieve arbitrage, and gain huge profits from small investments.
However, at the end of last March, Binance issued an announcement, stating to delist all FTX leveraged tokens because users did not understand the operating mechanism of LT.
Before the announcement, Binance’s margin trading suffered a stroke. After the leveraged token sell-off at the beginning of that month, Binance’s EthereumDown had seen many unusual changes during the decline in ETH prices, as well as many long wick candles. The abnormal situation continued for more than 30 minutes. In the afternoon after the incident, while the price of ETH fell further, EthereumDOWN did not seem to respond in time but maintained repeated fluctuations in price. Many investors were likely to have suffered losses due to this incident.
According to Binance’s official explanation, some of its users had not timely liquidated the positions but held the leveraged tokens for a prolonged period. As the market fluctuates, leveraged tokens will depreciate over time, rendering long-term holding unwise. For those who wanted to recover the unrealized loss, the bad news was the price was unlikely to rebound. The main reason for delisting FTX was, according to Binance, that many users were unaware of its potential risk. Despite a pop-up window warning users of the possible risks from time to time, no one took a serious look. FTX is one of the most popular LTs. Delisting it is not an easy choice, but Binance believes that user protection should be paramount.
Therefore, in the case of insufficient market funds, if users want to achieve assets growth, spot trading alone wouldn’t be sufficient, and only derivatives can meet the market demand.
Since 2019, crypto derivatives such as margin trading have taken shape increasingly. That year, a system of derivative services has gradually formed. CoinEx, Huobi, OKEx, Binance, FTX, and other well-known trading platforms at home and abroad have successively laid out new crypto derivatives, while the emerging derivative platforms represented by CoinEx are constantly innovating on the basis of the old-school derivatives.
In addition, trading platforms have started to scramble for limited market shares. Whoever better meets the trading needs of users will harvest a larger user base. Now that margin trading has become the most popular choice, a better trading experience is the key to sustainable growth.
Compared to its counterparts, CoinEx’s innovative margin trading service has shown better performance in terms of trading convenience, beginner friendliness, and asset security.
CoinEx has innovated an automatic borrow/settle mechanism for its margin trading service. With any margin in the account, users can freely borrow any type of leveraged tokens. With no special manual procedure required, when the transaction amount exceeds the principal, the insufficient part will be automatically covered by borrowed funds. And assets credited to the user’s account if in the same coin type of the loans, will be automatically used to settle the loan, thereby eliminating the trouble of manual operation.
CoinEx users can enjoy a 10-day interest-free period when they borrow cryptos for the first time, as well as 3X, 4X, 5X, or 10X leverage. They can reasonably use leverage in margin trading, adjust the positions, and timely liquidate the positions to take profits or cut losses. CoinEx offers cost-effective services by charging a reasonable service fee for closing positions, supporting a variety of currency types, and calculating market-making rates based on daily interest rates.
At the same time, CoinEx has made a very user-friendly improvement to its risk control mechanism. The platform employs a unique mark price for position closing. When the market fluctuates sharply, it will spontaneously take over the open positions to reduce users’ losses. For users, leverage is a good hedging channel, and CoinEx boasts obvious advantages in the margin market relying on its incomparable liquidity.
In margin trading, the most feared is that the platform’s price fluctuations will lead to forced liquidation. In order to avoid this situation, CoinEx takes an average of the latest cryptocurrency prices (the highest and lowest prices removed) on many popular trading platforms as the fair price to avoid accidentally forced liquidation, thereby effectively safeguarding users’ assets.
The margin market constantly poses challenges to leveraged tokens. All the LT products of different exchanges seem similar, and each appears trustworthy under usual market conditions. But few of them could withstand black swan incidents. So an exchange with reasonable rules, plenty of liquidity, and a good reputation might be more important to investors than the service itself since such a platform can protect their interests.
Recently, CoinEx plans to adjust the interest rate system for margin trading to improve liquidity and better serve its users. With its abundant LT types and excellent user experience, CoinEx has harvested popularity among users and maintained healthy development.
The competition among exchanges has become increasingly intense. In addition to basic trading functions and good user experience, the key to success also lies in distinctive and differentiated quality services and mechanisms. Being innovation-oriented, CoinEx has topped the margin trading market relying on its keen market sense and solid financial background. Furthermore, it has also listed a large group of popular cryptocurrencies. We have every reason to believe that, with such a steady and down-to-earth development strategy, CoinEx will outshine all of its competitors.