Can leverage and borrowing really be used? An article that explains everything.
Recently, Binance launched a high annual reward event with $USD1 . The core question that many people are concerned about is just one:
The information online is very chaotic, with some saying 'completely unworkable'.
This article is based on the official announcement and clear statements from customer service, systematically sorting out the path.
1. What is the core logic of the event settlement?
The most critical sentence in the official announcement is:
Your eligible balance of USD1 will be calculated based on net assets (assets minus liabilities). The liability portion (such as VIP borrowing, leveraged borrowing, etc.) is not included in the eligible balance for this activity.
Many people understand 'net assets' as:
Total account assets − Total account liabilities
If understood this way, then any leverage or borrowing will directly offset the rewards,
The conclusion is naturally 'leverage should not be used at all.'
2. The actual calculation caliber confirmed by customer service
However, this is completely a misinterpretation. According to customer service, this event only calculates the net assets of USD1 itself. The liabilities of other trading pairs or currencies do not participate in the calculation of the eligible balance for USD1.
That is to say, the system actually adopts: eligible USD1 = USD1 assets − USD1 liabilities
Instead of: USD1 − (USDT + BTC + all other liabilities)
This is the watershed of the entire issue!
3. The only established leverage path
1. Use USDT spot to purchase USD1
2. Transfer USD1 to the leveraged entire warehouse (note that this is the leveraged entire warehouse; the reason will be explained at the bottom!)
3. Adjust the multiple to 3X, then click the 'Borrow/Repay' button in the upper left corner
4. Choose the entire warehouse - choose manual borrowing - choose USDT
5. Choose 0.5 of your total USD1 amount (which is half)
6. Transfer the recently borrowed USDT out from the entire warehouse leverage
7. Then use USDT to purchase USD1 in the spot market
8. Transfer USD1 to other accounts (sub-accounts are also fine; the method to open sub-accounts will be attached with images; you can create it using an email or a virtual email)
9. Repeat the above operations
Note: If you are not an integer amount, you can use the total amount * 0.5 to maximize the transfer of USDT out
4. Regular deposit calculation formula VS 1000U revolving loan calculation formula
Let's first assume a simple and common situation:
1. Regular deposit calculation formula:
Principal 1000U
Annualized 24%
24% ÷ 365 ≈ 0.066% / day
1000 × 0.066% ≈ 0.66 U / day
2. Leverage revolving loan calculation formula:
Principal 1000U
Each round can only transfer 50%
Annualized storage of USD1 is approximately 24% * 1.2 times ≈ 24%
The annualized borrowing of USDT is approximately 4.25% click to view USDT annualized rate (because interest rates may fluctuate, pay attention to this entry)
Part 1: 1000
Part 2: 500
Part 3: 250
Part 4: 125
Part 5: 62.5
...
Until only about 10U is left, adding all this money together is approximately 2000U
20% ÷ 365 ≈ 0.055% / day (here the interest of borrowing USDT has been deducted)
2000 × 0.055% ≈ 1.1 U / day
Yield ≈ doubles!!
Note: It is recommended to leave a safe amount as the last balance, do not leave the minimum, at least leave some for interest payments
5. Must clarify risk warnings (very important)
Leverage risk:
1. USD1 decoupling
2. Margin rate fluctuations
3. Extreme market conditions may pose a risk of forced liquidation
4. Joint margin rate = adjusted account equity / maintenance margin
The joint margin rate indicates the risk rate of the unified account. When the joint margin rate reaches 1.05, the position of the unified account will be liquidated!
If you do not want to take risks or are not familiar with leverage risk control, my suggestion is to participate only with your own funds, which is the safest approach
6. The strongest core key point!
Why transfer to leverage the entire warehouse? Why not transfer to leverage the isolated warehouse? (Because I only see a switch in the entire warehouse, the isolated warehouse does not have this switch)
Answer: That is $BNB ! The entire warehouse leverage has a switch, 'BNB Discount 5%'
This core function can greatly reduce our expenses!
BNB interest payment (5% discount)
If you enable the BNB interest payment feature, the interest generated after enabling will be converted into BNB interest, and you will enjoy a 5% discount
This is why transferring to the entire warehouse leverage instead of isolated warehouse leverage!
After the event ends, you can purchase BNB or buy BNB at a low price to settle the interest incurred from the USDT you borrowed!
Note: The annualized interest distribution time is at 8:00 AM Beijing time on January 25 (if you deposit before 8:00 AM on the 24th today), $WLFI the prize pool is distributed weekly!
