Dual Currency Product - FAQ
Updated at:41 days 3 hours ago
Q1. How to view the details of your purchase?
You can view the details of your purchases by clicking "My Holdings" in the upper right corner of the Dual Currency Product page. You can also click on "Wallet" - "Classical Account" - "Spot Account" on the homepage upper bar to view all the financial products you have purchased.
Q2. Is the purchase revocable?
No, the purchase is irrevocable, and payment will be done automatically when the product is due for delivery.
Q3. Is early redemption supported after a successful purchase?
Early redemption is not supported after a successful purchase, and the payment will be settled automatically when the product is delivered at maturity.
Q4. How is the return calculated?
Example 1: Investing in BTC to buy a BTC_USDT dual currency product
User A invested in $1 BTC to buy a Gate.io Dual currency product with a linked price of $20,000. When the product expired on February 1, 2021, user A would receive:
(1) If the settlement price of BTC_USDT < 20,000 USDT, the payment will be settled in BTC, and the payment amount is = 1 BTC * (1+100%/365*31)=1.0849 BTC
(2) If the settlement price of BTC_USDT is ≥ 20,000 USDT, the payment will be settled in USDT and the payment amount is = 1 BTC * 20,000 * (1+100%/365*31) = 21698.63 USDT
Example 2: Investing in USDT to buy a BTC_USDT dual product
User B bought $20,000 USDT on Gate.io Dual currency product at $20,000. When the product expired on February 1, 2021, user B would receive:
(1) If the settlement price of BTC_USDT ≤ $20,000 USDT, the payment will be settled in BTC and the amount of the payment is = $20,000USDT/20,000*(1+100%/365*31)=1.0849 BTC
(2) If the settlement price of BTC_USDT > $20,000 USDT, the payment will be settled in USDT, and the payment amount is = 20,000 USDT*(1+100%/365*31) = $21,698.63 USDT
In summary, when the product is settled, users can get 108.49% of the collection of payment. However, the numerical relationship between the settlement price and the linked price can change the final currency collected by the user. That is, the user may finally receive the profits in a different currency.
Q5. How to receive the returns?
Once the purchase is completed, you will receive the principal and interest after the product expires. The repayment will be issued to your spot account automatically.
Q6. Why is the investment currency inconsistent with the settlement currency?
The settlement currency is determined by the numerical comparison between the price of the linked currency and the linked price when the product expires. Take investing in BTC to buy Dual Currency Product BTC_USDT as an example: when the settlement price is ＜ the linked price, the settlement is done in BTC; when the settlement price is ≥ the linked price, the settlement is done in USDT.
Q7. When is the best time for users to get started with a Dual Currency product?
Users can subscribe to a Dual Currency product when they want to realize the following goals:
- Make profits: To earn part of the investment profit and obtain higher income, users can sell the cryptocurrency held at the target price;
- Buy at a low price: When the market is going down, users can buy cryptocurrency at the target price, that's, to obtain higher yields by "buying the dip";
- Increase cryptocurrency holdings: Users can buy more cryptocurrencies when they have already held some cryptocurrencies and want to continue profiting from them;
- Hold more stablecoins: Users can purchase more stablecoins when they have already owned some stablecoins and want to continue profiting from them.
Q8. Why is the APR of Dual Currency Products so high?
A Dual Currency Product is a financial product derived from selling options. When you sell options, you will get the premium from the buyer, and the premium will be used to pay interest to users. The amount of premium varies with the difference between the underlying price and the linked price. The closer the underlying price is to the linked price, the higher the APR and the higher the risk.
Q9. What are the risks of Dual Currency Products?
- It doesn't allow users to withdraw assets within the holding period, which will decrease the liquidity of the asset.
- According to the product rules, the settlement currency is determined by the comparison between the price of the linked currency and the linked price at the time of expiry and delivery. When the market fluctuates drastically, it is difficult to predict the comparison outcome of the settlement price and the linked price at expiration. This puts currency-based investment users at the risk of investment currency being converted. However, Dual Currency products also provide yield compensation for currency conversion risks. The higher the probability of currency being converted, the higher the yield of the product.