In a sign of continuing convergence between crypto platforms and traditional brokers, Binance has begun to offer perpetual futures contracts on non-digital assets.
The crypto exchange’s new CFD-like TradFi Perpetual Contracts “bridge the gap between traditional finance and digital assets”, the firm stated in an email update to customers this morning.
The first contract, XAUUSDT (Gold), was made available to all eligible markets on 5 January and XAGUSDT (Silver), was listed on 7 January. Binance said it will continue to expand this product offering.
TradFi perpetual contracts are contracts that track the price of underlying traditional finance (TradFi) assets, allowing users to trade on the price movements of these assets without needing to own them directly.
All of Binance’s new TradFi perpetual contracts are settled in USDT (the Tether US dollar-pegged stablecoin) only.
They are margined and settled in the same way as existing crypto perpetuals.
The exchange offers hedging and diversification as well as leverage alongside the new TradFi contracts.
The new products, officially going under the name of TradFi Perpetual USDⓈ-Margined Futures contracts are traded on Nest Exchange Limited, regulated by Canada’s Financial Services Regulatory Authority (FRSA). They are cleared by the regulated clearing house, Nest Clearing and Custody Limited.
The contracts trade 24/7, even when underlying assets have specific market hours.
To ensure fair pricing during off-hours, Binance uses a price index fixed at the last value in market hours.It also uses a mark price which uses a smoothed futures price calculated with an Exponentially Weighted Moving Average (EWMA).
It implements deviation constraints to limit the difference between Mark Price and Price Index.
The TradFi perpetual contracts can be traded via the Binance Futures page on the exchange’s website, where users can select the TradFi tab under the symbol search bar.
Yesterday, Binance changed how its Proof of Reserves (PoR) information is presented across individual digital assets, as part of what the company described as an ongoing effort to improve transparency and accuracy.
