I haven’t written anything for a long time. The main reason is that JL Capital has recently encountered a waterloo in the Lumao (catching airdrops) business. The main brush zkSync has not issued coins for a long time. I have no choice but to replenish 100 Linea and Taiko accounts (to make up for the effort) haggard). So, if JL Capital succeeds in combing its hair, what will it do next? It must be "money begets money". In this issue, we will share with you Binance financial products. Let us learn together, find suitable financial management methods, and steadily increase the value of wealth!
There are three articles planned in total:
Read the article and receive red envelopes | Product introduction of Binance financial product series (1/3)
Read the article to get a bonus | Analysis of Binance’s financial products series (2/3)
Read the article to get a bonus | Binance Financial Product Series: Product Practice (3/3)
Since this feature of reading questions and getting red envelopes is a new one, we will test it with 10U first, so I suggest you follow me so that you can see the next two articles in time. Haha.
Key Summary:
You have digital currency (BTC, ETH, etc.) and you can choose to sell it at a certain price at a certain time. For example, if you choose to sell it at price A after 20 days, your digital currency is locked. Note that it is locked and you can only wait for 20 days. What will happen after 20 days:
If the price is greater than or equal to A, you will sell the digital currency in your hand at price A.
If the price is less than A, your digital currency is not sold and will be returned to you.
You will be charged interest for 20 days.
Of course, if you have stablecoins, you can also choose to buy low. The whole process is similar to the above process.
Interested? Then let’s learn more about this financial product.
What is dual-currency investment in traditional finance?
In traditional finance, "dual currency investment" usually refers to a derivative investment strategy that involves two currencies, one is the investment currency (such as RMB), and the other is the investment target currency (such as USD). The specific working method is as follows:
Investors purchase a specific financial product in a certain currency (such as RMB), and the interest of the product is paid in another currency (such as US dollars). When the product matures, investors can choose in which currency to receive the principal. However, this choice is usually determined by a predetermined exchange rate (also known as the execution rate). If the actual exchange rate of the target currency against the local currency is better than the execution rate, the investor will receive the principal in the target currency. On the contrary, if the actual exchange rate of the target currency against the local currency is worse than the execution rate, the investor will receive the principal in the local currency.
For example, an investor purchases a dual-currency investment product in US dollars with RMB, and the interest of the product is paid in US dollars. If the actual exchange rate of US dollars to RMB is better than the execution rate when the product expires, the investor will receive the principal in US dollars. On the contrary, if the actual exchange rate of US dollars to RMB is worse than the execution rate, the investor will receive the principal in RMB.
Dual currency investment is a high-risk, high-return investment method. Its returns and risks mainly come from the exchange rate fluctuations between the two currencies. Therefore, when making dual currency investments, investors need to have a deep understanding of the currency market and a clear understanding of their risk tolerance.
What is Binance Dual Currency Investment?
Dual Currency Investing gives you the opportunity to buy and sell cryptocurrencies in the future at a target price and date, earning high rewards regardless of market trends. Similar to traditional finance, you need to have a deep understanding of the exchange rate of digital currencies. Just like the slogan of Binance’s product: “Monetize your market views and enjoy potentially high returns”
What are the advantages of dual currency investment?
Buy low, sell high: Buy cryptocurrencies at a lower price or sell them at a higher price.
High Rewards: You can earn high passive income regardless of market trends.
Wide selection: You can choose from a variety of assets to invest in, and set your own delivery date and target price.
Zero transaction fees: You can “buy low” or “sell high” when your target price is reached, and Binance does not charge any transaction fees.
When should I use Dual Currency Investment?
Take Profit: Sell the cryptocurrency you hold at the target price to realize some of the gains and get extra rewards.
Bottom-fishing: Buy cryptocurrencies at target prices during market lows and enjoy extra rewards.
Earn more crypto: Already hold crypto and want to earn extra income while continuing to hold it.
Earn more stablecoins: Already hold stablecoins and want to earn additional income while continuing to hold them.
How do “buy low” and “sell high” products work?
There are two types of Dual Currency Investment products: “Buy Low” and “Sell High”.
By subscribing to the "Buy Low" product, you will have the opportunity to buy your favorite cryptocurrency (such as Bitcoin) at a lower price in the future with stablecoins (BUSD or USDT).
Target Achieved: If the market price on the settlement date is equal to or lower than the target price, the target token (Bitcoin) will be bought.
Target not reached: If the market price on the settlement date is above the target price, you will continue to hold your stablecoins.
In both cases, you will be able to earn rewards in stablecoins. When the target price is reached, the subscription amount and reward income will be used to purchase Bitcoin.
After subscribing to the "High Sell" product, you will have the opportunity to sell your current cryptocurrency (such as Binance Coin) at a higher price in the future in exchange for BUSD.
Target reached: If the market price on the settlement date is equal to or higher than the target price, your BNB will be sold in exchange for BUSD
Target not reached: If the market price on the settlement date is lower than the target price, you will continue to hold your BNB
In both cases, you will earn rewards in the current currency (BNB). When the target price is reached, both the subscription amount and the reward income will be converted into BUSD.
What is automatic reinvestment?
Auto-reinvest is a new feature that automatically re-subscribes to the Dual Currency Investment Plan on the settlement date.
After enabling this feature, the system will help you to resubscribe for new positions, and the settlement date will be the next settlement date from the current date.
The settlement days for Bitcoin and Ethereum are Tuesdays and Fridays. The settlement day for other digital assets is Fridays.
After the automatic reinvestment function is enabled, the Dual Currency Investment Plan will automatically resubscribe to the next valid settlement date after the settlement date. You can enable/disable the automatic reinvestment plan 30 minutes before the settlement date.
To enable the automatic reinvestment function, turn on the button next to [Automatic reinvestment] when setting up the plan. Then select the Basic plan or Advanced plan.
How does automatic reinvesting work?
You can choose between 2 types of automatic reinvestment plans.
1. Basic plan
If the target price is reached, the automatic reinvestment will stop. The system will close the position and distribute the profit.
If the target price is not reached, the automatic reinvestment will continue. The system will automatically purchase new positions and settle them on the next effective settlement date until the target price is reached.
2. Premium Plan
If the target price is reached, the system will automatically purchase a new position and perform reverse settlement on the next effective settlement date. For example, if you purchase a high-selling product and the target price has been reached, the automatic reinvestment will open a new low-buy position for you.
If the target price is not reached, the system will automatically purchase a new position and settle in the same direction on the next effective settlement date. For example, if you purchase a high-sell product but the target price is not reached, the automatic reinvestment will open a new high-sell position for you.
When you settle, the system will automatically reinvest based on the market price and select a new target price based on the current market price. For example, if you use automatic reinvestment but the "low buy target price" is not reached, the system will set a new target price 10% lower than the current market price. Assuming the current market price of Bitcoin is $20,000, the new target price will be 10% lower than $18,000.
What are the risks of dual currency investment?
There are risks in dual currency investment.
The purchased assets will be locked and cannot be cancelled or redeemed before the settlement date.
If the market price moves further away from your target price, you will miss the opportunity to buy or sell at a better price.
In Dual Currency Investment, transactions can only be made based on the price on the settlement date.
Are the target price, settlement date and annual interest rate fixed?
After the subscription is completed, the target price, settlement date and annual interest rate can be determined. They cannot be modified.
You can view the target price, settlement date and annual interest rate from [Financial Wallet] and [Financial History].
Can the subscription be modified or cancelled?
Please note that once you have subscribed, you cannot modify or cancel it.
Well, so far, we have sorted out the basic concepts of dual currency investment and some key questions and answers for you. I will continue to learn the following core concepts of dual currency investment and user terms, and discuss them with you in the next article. It is best to remember to follow me, and answer the questions and grab the red envelope when the next article comes out!
