To enhance market liquidity and mitigate trading risks, a major platform is implementing significant updates to its leverage tier rules and asset discount rate structures. These updates are designed to offer a more robust and efficient trading environment while protecting users from unnecessary market volatility.
The adjustments will come into effect on April 15, 2025, between 2:00 PM and 6:00 PM UTC+8. It is important to note that these changes are administrative and are not expected to increase the risk level of your existing positions.
Here’s a detailed breakdown of what’s changing.
Adjustments to Cross-Margin and Portfolio Margin Modes
The most substantial updates apply to the cross-margin and portfolio margin modes for USDT. The new structure increases the maximum borrowable amount in the initial tiers while fine-tuning the maintenance margin and initial margin requirements.
Key Changes for USDT in Cross-Margin Mode:
- Tier 1: The maximum loan amount for USDT has been significantly increased from 100,000 to 5,000,000.
- Higher Tiers: Subsequent tiers now feature larger maximum borrow limits and adjusted margin requirements to reflect current market conditions and improve capital efficiency.
These revisions allow traders to access greater capital within lower-risk tiers, providing more flexibility for larger positions.
Updates to ETH/USDT and STETH/USDT Leverage Tiers
The leverage tiers for major trading pairs, including ETH/USDT and STETH/USDT, are also being optimized. The adjustments focus on increasing the maximum borrowable quantities for both the base and quote currencies in each tier.
Highlights for Trading Pairs:
- ETH/USDT: The maximum borrowable amount of ETH in the first tier has doubled, and the corresponding USDT limit has been raised.
- STETH/USDT: This pair sees more conservative yet meaningful increases in its tier thresholds, balancing opportunity with risk management.
For isolated margin and single-currency cross-margin modes, the leverage tiers will be adjusted according to the rules outlined for the trading pair section. Cross-margin and portfolio margin modes will follow the USDT margin rules.
👉 View real-time leverage tier details
Revised Discount Rate Tiers for ETH, BETH, and STETH
Discount rates are crucial in cross-currency margin and portfolio margin accounts, as they determine the real USD value of different crypto assets used as collateral. Due to varying market liquidity, each asset is assigned a discount rate to balance risk.
The upcoming update adjusts the gradient tiers and corresponding discount rates for ETH, BETH, and STETH.
Summary of Discount Rate Changes:
- ETH: The asset quantity ranges for each tier have been expanded. For instance, Tier 1 now covers holdings from 0-400 ETH, up from 0-200, while maintaining a 0.98 discount rate.
- BETH: Similar to ETH, the tiers for BETH have been widened to accommodate larger holdings without immediately moving into a higher discount bracket.
- STETH: This asset receives a dual adjustment: tier ranges are increased, and the discount rates themselves have been improved across all tiers, meaning STETH collateral will now retain more of its USD value.
A lower discount rate means that asset is valued less as collateral. For example, a 0.98 discount rate means $100 worth of crypto is valued as $98 in your margin account. These changes generally allow users to pledge more assets before encountering higher discount rates.
Frequently Asked Questions
What is a leverage tier?
Leverage tiers are risk management rules that define the maximum amount you can borrow and the margin requirements based on your position size. As your position grows into a higher tier, your allowed leverage decreases, and your maintenance margin requirement increases to protect against liquidation.
Will these changes affect my existing open positions?
The platform has stated that these adjustments will not increase the risk level of any current positions. Your positions will simply be re-categorized into the new tier structure based on their size. It is always good practice to review your margin ratio and risk levels after such updates.
What is a discount rate?
In cross-margin trading, the discount rate is a multiplier applied to the value of an asset when it is used as collateral. It accounts for the volatility and liquidity of that asset. A higher discount rate (closer to 1.0) is better, as it means your collateral is valued closer to its full market price.
Why are these adjustments being made?
These updates are primarily aimed at improving market liquidity and refining risk management protocols. By increasing borrow limits in lower tiers and adjusting discount rates, the platform provides a more efficient and flexible trading environment for its users.
Do I need to take any action before the update?
No mandatory action is required. However, it is a perfect time to review your trading strategy, understand the new tier thresholds, and assess how your current positions fit into the new framework. This proactive approach can help you manage risk more effectively.
Where can I learn more about how these tiers work?
The platform provides detailed help articles explaining concepts like position tiers and currency discount rates. For a comprehensive understanding of how your margin requirements are calculated. 👉 Explore more advanced risk management strategies
This overhaul of the leverage and discount tier system represents a commitment to creating a safer, more liquid, and user-friendly trading experience for all users.