The Unified Futures Trading Account allows users to borrow and repay assets under specific conditions. This article will explain how the system works, including how borrowing is triggered, how interest is calculated, and the repayment process.
Borrowing
Borrowing under the UTA is automatically triggered under specific scenarios. Manual borrowing is not supported.
Formula
- Cross Margin
Borrowed Amount = ABS [Min (0, Equity − Buy Option Initial Margin - Positive Option Value − Asset Frozen)]
- Portfolio Margin
Borrowed Amount = ABS [Min (0, Equity − Asset Frozen)]
Equity = Asset Wallet Balance + Perpetual and Futures UPL + Options Value
| Scenario | Example |
| Insufficient wallet balance to cover the respective transaction | Trader A currently has USDT in their UTA, and has placed a USDT Perpetual contract order. Upon order execution, a trading fee (fee to open the position) of 1.5 USDT will be incurred.The auto-borrowed amount is 1.5 USDT as Trader A does not hold any USDT in their wallet balance. |
| Realized Losses in Perpetual Futures Contracts | Trader B opened a USDT perpetual position with a current wallet balance of 50 USDT and 100 USDC. As the position has incurred a realized loss of 100 USDT, Trader B's current equity is -50 USDT. The auto-borrowed amount is -50 USDT (excluding fees), and it will continue to adjust based on the unrealized P&L. |
Borrowing Limit
All users are subject to the maximum borrowing limit of their account.
For example, if the maximum borrowing limit for USDT is 2,500,000, the total borrowing amount under the user’s account must not exceed this limit. Exceeding the limit may trigger auto repayment.
Interest
When borrowing occurs, interest accrues.
Interest Scenario
Understanding the borrowing scenarios will help you identify which borrowings are realized or unrealized, and if they are subject to interest accrual.
| Scenario | Explanation |
| Insufficient wallet balance to cover the respective transaction | Transactions that reduce wallet balance, such as trading fees, funding fees, or closed position losses, are realized expenses. The borrowed amount is considered realized borrowing, and interest accrued. |
| Realized Losses in Perpetual Futures Contracts | A realized loss occurs in a perpetual futures contract only when a position is closed at a loss. Only then will the realized loss be treated as a realized borrowing. |
Interest Accrual and Calculation
Interest will be accrued hourly once it is incurred. The system will auto-calculate and charge the interest five minutes after each hour, such as 8:05AM UTC or 9:05AM UTC, etc. This is based on the interest rate and the amount of borrowing at that time.
Formula
Hourly Interest Charge = Borrowing Amount × Hourly Interest Rate
Repayment
Manual Repayment
Traders can perform manual repayments on the Unified Futures Trading Account through the following method:
Use Repay Button: Go to the Unified Futures Trading Account and click the Repay button to make a repayment (non-native currency repayment is supported). A 1% repayment handling fee (conversion fee from margin assets to borrowed assets) will be charged on the total repayment amount.
Auto Repayment
If auto repayment is triggered, the system will automatically convert other positive balance assets into the borrowed token based on the index price to repay the loan. No fee is charged for auto repayment.
Forced Repayment
- When the borrowed amount reaches 100% of the borrowing limit, the system will trigger partial forced repayment. Once the trader's borrowed amount drops below 80% of the maximum borrowing limit, the account will return to a safe level. A 2% repayment handling fee will be charged on the total repayment amount.
- If there are no positions but there is outstanding debt, and the user’s asset value drops drastically, causing the account to be undercollateralized, the system will trigger full forced repayment. Full forced repayment will seize all collateral assets and clear the debt. No fee is charged for full forced repayment.
- When the Maintenance Margin Rate (MMR) reaches or exceeds 100%, the system will liquidate the position completely until the debt is fully cleared. No fee is charged for this process.
Note:
— If a trader has borrowed multiple cryptocurrencies, the system will prioritize repaying non-stablecoin tokens first, followed by stablecoins, in the order of asset liquidity.
View Borrowing, Interest, and Repayment History
Go to your personal Unified Futures Trading Account asset page, click on "History" to view the transaction history for borrowing, auto repayment, partial forced repayment, manual repayment, and liquidation repayment.