The Bitcoin Cash (BCH) network is scheduled to undergo a hard fork around November 15, 2020 (HKT). This event involves competing node proposals—Bitcoin Cash ABC and Bitcoin Cash Node—which may result in two distinct assets. Users holding BCH before the fork may receive both new tokens.
This article outlines the handling strategies for various platform services and explains how forked assets will be managed to ensure user asset safety and smooth operations.
Trading Services: Spot and Leverage
To ensure a seamless transition during the BCH hard fork, the following measures will be implemented:
- Leveraged borrowing for BCH will be suspended on November 8, 2020, at 11:00 HKT.
- A system-wide forced repayment will occur on November 14, 2020, at 11:00 HKT. Users with outstanding loans in BCH/USDT or BCH/BTC leverage pairs must repay before this time to avoid automatic liquidation.
- Spot and leverage trading services will be paused on November 14 at 17:00 HKT. All open orders will be canceled at this time.
- BCH deposit services will be suspended on November 14 at 18:00 HKT. Users are advised to complete any necessary deposits beforehand.
All technical aspects related to the fork will be handled by the platform.
Futures and Perpetual Swap Contracts
Contract Underlying Assets
The BCHUSD and BCHUSDT futures and perpetual swap contracts will continue to track the original Bitcoin Cash (BCH) before the fork. Post-fork, the contract will follow the chain with the higher value, as determined by major exchanges with minimal price discrepancy.
Index Composition and Risk Control Adjustments
The current index for BCH contracts is composed of several major exchanges. However, as the fork approaches, some exchanges may delist BCH trading pairs, potentially reducing index components.
Temporary adjustments will include:
- Price Limits: Maximum and minimum order prices will be calculated based on the previous minute’s k-line average.
- Liquidation Mechanism: The liquidation trigger will temporarily use the contract's mid-market price instead of the mark price.
- Funding Rate: The funding rate cap may be set to zero approximately one day before the fork, suspending funding fee exchanges during volatile periods.
After the fork, once new trading pairs are listed and markets stabilize, the index will be updated to reflect the dominant chain. Normal risk management rules will resume thereafter.
Leverage and Margin Adjustments
To mitigate risks associated with high volatility during the fork, leverage levels for BCH contracts will be reduced, and maintenance margin rates will be increased across different tiers.
New Contract Generation
No new weekly or bi-weekly BCH futures contracts will be listed before November 15, 2020, to avoid settlement complications due to unpredictable spot prices.
All adjustments will be communicated in advance via official announcements.
Over-the-Counter (OTC) Trading
BCH trading via OTC (C2C) channels will be suspended on November 8, 2020, at 11:00 HKT.
Financial Services
Savings Accounts
Users holding BCH in savings products will continue to earn interest based on the remaining available loanable balance. No action is required from users—the platform will manage all fork-related procedures.
Lending Services
- Using BCH as collateral in lending will be discontinued on November 8, 2020, at 11:00 HKT.
- A forced repayment for USDT loans collateralized by BCH will occur on November 14, 2020, at 11:00 HKT. Borrowers must repay before this deadline.
Handling Forked Assets
Snapshot and Airdrop
A snapshot of user BCH balances will be taken between 21:00 and 21:05 HKT on November 15, 2020. The snapshot will determine user eligibility for the new forked assets.
After the fork, the chain with the higher market value will retain the BCH ticker. The other chain’s token will be airdropped to users at a 1:1 ratio based on the snapshot.
Users can check their balances for the new asset under "Assets Management — Funding Account." Deposits and trading for the new assets will be announced at a later date.
Risk Reminder
Cryptocurrency investments are inherently risky due to high price volatility. Users should fully understand the market dynamics and assess their risk tolerance before investing.
The above measures are designed to ensure stability and security during the BCH network upgrade. Should extreme circumstances arise, the platform reserves the right to adjust these rules to protect user interests.
For further details on secure trading practices during market events, explore more strategies here.
Frequently Asked Questions
What is a hard fork?
A hard fork is a radical change to a blockchain's protocol that makes previously invalid blocks/transactions valid, or vice-versa. It requires all nodes or users to upgrade to the latest version. In the case of BCH, this results in two competing chains.
Do I need to move my BCH before the fork?
If your BCH is already on the exchange, no action is needed. The platform will handle the technical process, and you will receive any new forked assets based on your balance during the snapshot.
How will the new forked asset be distributed?
The asset will be airdropped to your funding account at a 1:1 ratio based on your BCH balance at the time of the snapshot. The distribution timing will be announced after the fork.
Will trading be available immediately after the fork?
No. Trading, deposits, and withdrawals for both the retained BCH and the new forked asset will be suspended until the network is stable. The platform will make an announcement once these services resume.
What happens to my BCH futures positions during the fork?
Positions will remain open but are subject to temporary risk management adjustments. It’s advisable to monitor announcements and manage risk appropriately due to expected volatility.
Is there any risk of losing my assets during the fork?
The platform has implemented measures to protect user assets. However, market volatility during forks can be extreme. Users should be cautious with leveraged positions and understand the risks involved.