Wisebitcoin’s commissions explained

In this article, the functions of market makers and market participants are briefly explained, and the fees for traditional transactions and perpetual contract transactions on Wisebitcoin are introduced in detail.

We also discuss how to calculate the profit of Wisebitcoin to support leveraged trading using USDT or digital currencies.

Digital currency exchanges are essentially liquidity providers. They created a market. Let individuals and investors find people who want to buy and sell what they need to trade.

Market makers can be regarded as providers of liquidity. They agree to sell a certain amount of tokens or assets at a certain price to provide liquidity and depth to the market. Therefore, market makers can be summarized as sellers of tokens, assets or commodities. On the contrary, market participants can be regarded as buyers.

Both the dealer and the participants must pay platform commissions to promote liquidity. Many leading digital currency platforms have fees between 0.10% and 0.30%, while Wisebitcoin offers users a fee of 0.07%.

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Traditional transactions and permanent contracts

This is how traditional futures contracts work. Investors agree to purchase a certain amount of basic assets at a certain price at some time in the future. At that time, investors can choose to buy or withdraw from the contract. Although the completion of the contract requires a small fee, if the contract is signed, today investors can predict future price changes, and they can also make judgments about the direction of price changes.

If the investor believes that the price has risen, he signs a contract to purchase the asset at today’s (lower) price. If you think the price will fall, sign a contract to sell the asset at today’s (high) price.

Perpetual contracts are basically the same, the only difference is that there is no expiration date. Traders can take long-term or short-term positions on basic assets, and they can also use leverage flexibly (up Wisebitcoin supports 100 times leverage), but the additional advantage is that these contracts do not need to be settled (that is, terminated), and investors do not need to actually own or keep basic assets.

In addition to the expiry date, the main difference between traditional futures and perpetual futures is the financing fee. These fees are necessary to maintain a permanent contract price balance. On the expiry date of the futures contract, when the expiry date approaches, the price of the basic asset will converge to the spot price. Without this convergence mechanism, the perpetual contract price of nuclear energy is significantly different from the spot price of the basic asset.

The balance and maintenance costs of these trading mechanisms vary from exchange to exchange, but they are an important part of ROI. Therefore, it is important to understand these costs before signing a traditional or permanent contract. In the following, we will introduce Wisebitcoin’s margin and handling fee rates.

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Margin calculation

Traders may need to pay two types of margin. One is USDT swaps and the other is coin-based swaps.

Regarding these two types of expenses, Wisebitcoin deal with them as follows:

  • According to the contract amount
  • Multiply it by the number of contracts
  • Multiply it by the price
  • Divide by the amount of leverage

Remember: USDT swaps, a contract amount is always 0.0001BTC. For coin-based swaps, one contract amount is 1USDT.

For a better explanation, the following assumptions can be made:

  • The price of Bitcoin is 10,000USDT.
  • The 2000 contract is in trading.
  • Use 10 times leverage.

USDT swaps, the transaction calculation is as follows:

Contract amount * quantity * price / leverage

0.0001 * 2000 * 10,000 / 10 = 200USDT

This means that 200USDT is required to place an order of 2000 at a price of 10,000USDT with a leverage of 10 times.

For coin-based contracts, the transaction calculation is as follows:

Contract Amount * Quantity / (Leverage Ratio * Price)

1 * 2000 / (10 * 10,000) = 0.02BTC

In other words, when Bitcoin is 10,000USDT, 0.02BTC is needed to make 2,000 positions with 10 times leverage.

For detailed information about additional fees and exchange rates for specific tokens and transactions, as well as minimum profit margin and maximum leverage, please refer to Wisebitcoin transaction instructions.

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