What is Dual-Investment?
Dual-Investment is an investment product involving two different cryptocurrencies. Investors can subscribe to a Dual-Investment product using one of the digital currencies, with the final settlement currency determined by the settlement price and target price on the expiration date. It is a non-principal-protected financial product with floating returns, meaning returns are adjusted based on the predetermined “target price.”
Using Dual-Investment, investors can earn high interest returns regardless of market trends. The yield offered by Dual-Investment varies with the market, but once the investment is confirmed, the yield is fixed. Once subscribed, the order is irrevocable, and early redemption before settlement is not allowed. At settlement, investors are guaranteed a fixed minimum return in the original investment currency, but market fluctuations may convert the investment into another currency. This feature is the main attraction of Dual-Investment, allowing subscribers to profit from market trends.
*Please ensure you fully understand the product and its risks before investing in Dual-Investment.
When to Use Dual-Investment?
Here are some scenarios:
- Profit-Taking: Sell held cryptocurrency at a target price to realize part of the investment profit and earn higher interest returns.
- Buying at a Low Price: Buy cryptocurrency at a target price when the market declines to gain higher interest returns through a low-buy product.
- Acquiring More Cryptocurrency: You already hold some cryptocurrency and want to continue profiting from it.
- Acquiring More Stablecoins: You already hold some stablecoins and want to continue profiting from them.
How to Calculate Returns?
Example 1: Investing BTC in a BTC Sell-High Product:
User A subscribes 1 BTC in a BTC Sell-High product with a target price of 20,000 USDT. When the product matures on February 1, 2021:
- Scenario 1: If the BTC_USDT settlement price < 20,000 USDT, settlement is made in BTC.
- Return Amount = 1 BTC (1 + 100%/36531) = 1.0849 BTC
- Scenario 2: If the BTC_USDT settlement price ≥ 20,000 USDT, settlement is made in USDT.
- Return Amount = 1 BTC 20,000 (1 + 100%/365*31) = 21,698.63 USDT
Example 2: Investing USDT in a BTC Buy-Low Product:
User B invests 20,000 USDT in a BTC Buy-Low product with a target price of 20,000 USDT. When the product matures on February 1, 2021:
- Return Amount = 1 BTC 20,000 (1 + 100%/365*31) = 21,698.63 USDT
- Scenario 1: If the BTC_USDT settlement price ≤ 20,000 USDT, settlement is made in BTC.
- Return Amount = 20,000 USDT / 20,000 (1 + 100%/36531) = 1.0849 BTC
- Scenario 2: If the BTC_USDT settlement price > 20,000 USDT, settlement is in USDT.
- Return Amount = 20,000 USDT (1 + 100%/36531) = 21,698.63 USDT
In summary, upon product settlement, users receive a 108.49% return. However, the currency received differs based on the relationship between the settlement and target prices.
- Return Amount = 20,000 USDT (1 + 100%/36531) = 21,698.63 USDT
Pros and Cons
Like any financial tool, dual-investment products have pros and cons. Understanding their potential and risks is essential before investing. Here are some features:
Advantages:
- Opportunity for high returns
- Provides hedging opportunities
- Profits from market fluctuations in both directions
Cons:
- Assets cannot be withdrawn during the subscription period, sacrificing some liquidity.
- Returns depend solely on the performance of the underlying asset at settlement.
Glossary
APR
The APR fluctuates in real-time with the market. The actual APR is determined at the time of subscription.
APR = (Yield / Period) 365 100%
Period = Settlement Date - Subscription Date
Settlement Date
The date when the investment product ends. Settlement occurs at 16:00 (UTC+8) on the settlement date. Both the returns and principal are automatically credited to the spot account after settlement.
Investment Currency
The currency used to subscription the product. For example, in a BTC Sell-High product, BTC is the investment currency.
Settlement Currency
The currency received at product settlement. Settlement currency depends on the comparison between the target currency price and the target price at settlement.
Target Price
The target price determines the currency in which your returns will be calculated. If the settlement price is below the target price, the product is settled in the investment currency; otherwise, it is settled in another currency.
Settlement Price
The settlement price is the reference price on the Gate platform at 16:00 (UTC+8) on the product settlement date.
Gate reserves the right of final interpretation for this product.
