What is Dual Currency-B-USDⓈ, and how to invest?
Written by Tracy Chen
Updated at July 6th, 2023
Dual Currency Product is a non-principal protected investment product with floating return. The yield of the product is secured at the time of purchase, while the currency in which the product will be settled changes depending on how the Settlement Price compares with the Linked Price.
A short-term investment product, Dual Currency could potentially provide very high return. We have also designed it with a selection of tenors, catering to your varying risk appetite.
Dual Currency-B-USDⓈ : The Investment Currency is USDC. You could also purchase with USDT, and the USDT will be automatically converted into USDC. The Settlement Currency can either be BTC or USDC, depending on how the Settlement Price compares with the Linked Price: if the Settlement Price is lower than the Linked Price, you will receive your return in BTC; instead, if the Settlement Price is higher than the Linked Price, you will receive the return in USDC.
Payment Currency with which you purchase an investment product. For Dual Currency-B-USDⓈ products, it could be either USDC or USDT.
Investment Currency is the currency in which the investment will be made into the purchased product. For Dual Currency-B-USDⓈ products, it would always be USDC. If you buy the product in USDT, it’ll be automatically converted into USDC based on the price at the time of purchase.
Settlement Currency is the currency that you will receive when the product expires. For Dual Currency-B-USDⓈ products, it could be USDC or BTC, depending on how the Settlement Price compares with the Linked Price.
Expiry Date is the date when your investment products are settled. Your return from this product will be automatically credited into your account on this day.
Yield is the income returned on an investment. It is expressed in percentage and is used to calculate the Settlement Amount.
Annualized Yield is the equivalent annual return you would get if you continue purchasing this product with the given yield for a whole year. Its calculation formula is: Annualized Yield = Yield / (Expiry Date - Today) * 365
Linked Price is a benchmark price. On the Expiry Day, the Settlement Price will be compared against this benchmark price. If the Settlement Price is above the Linked Price, the product will be settled in the Investment Currency (i.e. USDC in this case); otherwise, it will be settled in BTC.
Settlement Price is the average of the Settlement Index in the last 30 minutes before 16:00 (UTC+8) on Expiry Date.
Settlement Index is derived from seven leading BTC-USD exchanges, including Bittrex, Bitstamp, Coinbase Pro, Gemini, Kraken, Itbit and LMAX Digital. It is the average of bid-ask prices from these exchanges after removing the highest and lowest values.
Let's take a look at how the Dual Currency-B-USDⓈ Product works:
Here we have a product with the parameters as follows:
- Linked Price: 8,000
- Expiry Date: 25-Jan-2020
- Yield: 5%
- Investment Currency: USDC
On 9-Jan-2020, Alice bought 10,000 USDC notional of the above product.
On 25-Jan-2020
- If BTC rallies between January 9 and January 25, and the Settlement Price is above 8,000 USD, Alice receives her original investment + 5% yield in USDC. Therefore, she receives 10,000 + 5%*10,000 = 10,500 USDC.
- If BTC weakens against USD between January 9 and January 25 and the Settlement Price is at or below 8,000 USD, Alice receives her original investment and 5% return in BTC. Therefore, she gets 10,000/8,000 + 10,000/8,000*5% = 1.3125 BTC.
Simply put, it is guaranteed that Alice will get 5% yield on the expiry date. The only uncertainty is whether she will receive it in BTC or USDC, depending on where BTC/USD stands on the expiry date.
There is no prerequisite on your Identity Verification level to purchase this product. Once you have assets no less than the minimum purchase quantity in your account, you are free to invest. However, we do suggest that you review the product specifications closely. You will also be asked to take a quick quiz before making the first investment to ensure that you have fully understood the product.
The minimum investment amount is 80 USDC/USDT. There is no maximum limit for investors as long as there is quota left for the product.
It is irrevocable after the purchase is successful. You will hold the product till the Expiry Date.
No early redemption is allowed. It will be settled by 16:30 UTC+8 on the Expiry Date.
You will get your settlement amount by 16:30 UTC+8 on the Expiry Date. It will be credited into your wallet automatically and there is no need for manual redemption.