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A leading exchange launches stablecoin settlement for TradFi perpetual contracts
Source: DefiPlanet Original Title: Binance Launches TradFi Perpetual Contracts Settled in Stablecoin Original Link:
Quick Breakdown
The world’s largest cryptocurrency exchange, a leading platform, has launched TradFi perpetual contracts allowing users to trade traditional assets like gold and silver through perpetual contracts settled in USDT.
Connecting Traditional Finance and Crypto Markets
This launch aims to provide continuous 24/7 exposure to traditional markets while leveraging the flexibility and accessibility of crypto trading.
The initial contracts, XAUUSDT and XAGUSDT, correspond to gold and silver respectively. The exchange plans to expand the range of TradFi trading pairs, further bridging traditional finance and crypto markets. The product is offered through an entity under the exchange, regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). This makes the exchange the first global platform to offer regulated TradFi derivatives settled in stablecoins.
Features and Risk Management
TradFi perpetual contracts are designed without expiration dates, eliminating the need for rollovers and allowing traders to hedge, diversify, or amplify their portfolio strategies. Users can utilize leveraged positions and apply strategies suited to different risk preferences, while gaining access to 24/7 markets beyond traditional trading hours.
The exchange employs robust pricing and risk mechanisms to manage volatility. Price indices aggregate data from multiple sources and update every second during market hours. Outside market hours, prices remain fixed to maintain stability. The use of exponential weighted moving averages (EWMA) smooths the mark prices to prevent sudden swings, and deviation limits help maintain risk control.
Contracts can be accessed via the exchange’s web platform, mobile app, and API, providing a seamless user experience across devices. This reflects the exchange’s commitment to expanding product offerings, connecting crypto users with traditional financial instruments, and adhering to high regulatory standards.