How many times is the U standard 2 times equivalent to the U standard? What is the difference between U standard and currency standard?

Coin standard and U standard perpetual contract: conversion and risk analysis of leverage multiples

The pricing methods of perpetual contracts are mainly divided into two types: currency standard and U standard. The currency standard contract is settled in the transaction cryptocurrency (such as BTC, ETH), with the goal of obtaining more of the cryptocurrency; the U standard contract is settled in the stablecoin (such as USDT), with the goal of earning more stablecoins, similar to the traditional gold standard system. Many investors are curious: How many times the leverage at the currency standard is equivalent to the U standard?

Conversion between 2 times leverage at the currency standard and U-standard leverage

Simplely put, 2 times leverage at the currency standard is roughly equivalent to 2 times leverage at the U-standard. However, this equivalence relationship is not absolute, as currency price fluctuations significantly affect the actual leverage effect. The risk of currency standard leverage will be amplified as currency price fluctuates, while the risk of U-standard leverage is relatively small due to the use of stablecoins. Therefore, in actual operations, it is necessary to consider the impact of currency price volatility on risk. When the market fluctuates violently, the actual leverage effect of the currency standard may be far beyond expectations and need to be extra cautious.

Key differences between currency standard and U standard

The main differences between currency standard and U standard contracts are reflected in the following aspects:

1. Settlement unit: The U standard is settled in a stable currency (such as USDT), and the profit and loss are calculated in a stable currency; the currency standard is settled in a transactional cryptocurrency, and the profit and loss are calculated in the cryptocurrency.

2. Volatility and Risk: U standard is relatively stable, with low risk, suitable for investors who pursue stable returns; the currency standard has high volatility and high risk, and is more suitable for experienced investors and requires a deep understanding of the market.

3. Applicable scenarios:

   U standard is suitable for investors with low short-term trading and risk tolerance; currency standard is suitable for investors with high long-term trading and risk tolerance, and has a strong grasp of market trends.

Risk warning

Whether it is currency standard or U standard leveraged trading, there are high risks, especially when the currency price fluctuates violently, it may lead to rapid reduction of margin or even overturning positions. Investors should choose appropriate trading methods based on their own risk tolerance, set reasonable stop-profit and stop-loss points, and strictly control risks. Before conducting any leveraged trading, be sure to fully understand its risks and operate with caution.

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