To foster a more robust and efficient trading environment, a series of technical adjustments were made to the trading parameters for LUNA and ANC spot and perpetual contracts. These changes were designed to enhance market liquidity and improve risk management mechanisms for traders.
This guide breaks down all the specific modifications, from price precision to funding rate rules, providing a clear explanation of what was updated and how it may impact your trading strategy.
Overview of Key Parameter Changes
The adjustments encompassed several critical areas of the trading system for the mentioned assets. The primary goal was to create a more stable and responsive market. The changes were applied to both spot trading pairs and perpetual swap contracts.
The parameters that were updated include:
- The minimum price increment (price precision) for orders.
- The tiered margin system (gradient档位规则) that determines leverage and margin requirements.
- The composition of the underlying index prices.
- The limits and calculations for the funding rate.
- The price limit rules for new contracts.
- The maximum order sizes for various market order types.
These comprehensive updates ensure the trading infrastructure can better accommodate market volatility and protect users.
Detailed Breakdown of Adjustments
Price Precision Updates
Price precision, often called the tick size, is the smallest allowable increment by which a price can change. Increasing precision allows for tighter spreads and more granular order placement.
Spot Trading Pairs:
- LUNA/USDT: Precision changed from
0.001to0.0001. - LUNA/UST: Precision changed from
0.001to0.0001.
Perpetual Contracts:
- LUNAUSDT: Precision changed from
0.001to0.0001.
Important Note on Existing Orders: When such a change is implemented, all existing open orders are not automatically canceled. They will continue to be matched in the system based on the old precision value. However, they will be displayed in your order books and history using the new, more precise format.
Tiered Margin Rules
The tiered margin system adjusts the required maintenance margin and initial margin based on a trader's open position size. This helps manage risk for both the trader and the platform by reducing maximum leverage for larger positions.
LUNAUSDT Perpetual Contract Tiers:
| Tier | Min Position (cont) | Max Position (cont) | Maint. Margin Rate | Initial Margin Rate | Max Leverage |
|---|---|---|---|---|---|
| 1 | 0 | 150,000 | 1.00% | 1.30% | 75x |
| 2 | 150,001 | 300,000 | 1.50% | 2.00% | 50x |
| 3 | 300,001 | 600,000 | 2.00% | 5.00% | 20x |
| 4 | 600,001 | 1,200,000 | 2.50% | 5.50% | ~18.18x |
| 5+ | +600,000 | +600,000 | +0.5% | +0.5% | Calculated |
ANCUSDT Perpetual Contract Tiers:
| Tier | Min Position (cont) | Max Position (cont) | Maint. Margin Rate | Initial Margin Rate | Max Leverage |
|---|---|---|---|---|---|
| 1 | 0 | 8,000 | 1.00% | 1.30% | 75x |
| 2 | 8,001 | 20,000 | 1.50% | 2.00% | 50x |
| 3 | 20,001 | 80,000 | 2.00% | 5.00% | 20x |
| 4 | 80,001 | 160,000 | 2.50% | 5.50% | ~18.18x |
| 5+ | +80,000 | +80,000 | +0.5% | +0.5% | Calculated |
Index Composition Changes
The index price is a crucial component for perpetual contracts, as it is used to calculate funding rates and mark prices. The adjustment added a new component exchange to the index for ANC, distributing the weight more evenly to better reflect the global market price.
ANC Index Updates:
- The number of component exchanges was increased from three to four.
- Binance was added as a new component exchange.
- The weight of each exchange (Gate, KuCoin, OKX, and Binance) was set to an equal 25%, reduced from the previous 33.3% for the original three.
This change makes the index more resilient and less susceptible to price anomalies on any single exchange.
Funding Rate Adjustments
The funding rate is a periodic payment between long and short traders to tether the perpetual contract price to the spot index price. The limits (a and b) on this rate were significantly expanded to accommodate periods of extreme market volatility.
The funding rate is calculated as:Funding Rate = Clamp(MA(( (Contract Bid + Ask) / 2 - Index Price) / Index Price - Interest), a, b)
(Where Interest was 0 at the time)
The clamping limits (a, b) were adjusted as follows:
| Effective Period | Lower Limit (a) | Upper Limit (b) |
|---|---|---|
| Before May 11, 16:00 | -0.75% | 0.75% |
| May 11, 16:00 - May 12, 16:00 | -5% | 5% |
| After May 12, 16:00 | -10% | 10% |
This temporary widening of limits allowed the funding rate mechanism to function effectively during a highly volatile market period. To understand how such mechanisms can be applied in real-time, you can explore advanced trading tools that provide live data.
Price Limit Rule Modifications
Price limits prevent orders from being placed too far above or below the index price, which helps curb market manipulation and extreme volatility, especially for newly listed contracts.
The formula for calculating limits is staged:
- First 10 minutes after contract generation:
[Index * (1 - X), Index * (1 + X)] - After 10 minutes: A more complex formula using
YandZparameters and a moving average of the premium.
The key parameter changes were:
- LUNAUSDT: The
Zparameter was increased from 8% to 40%, significantly widening the allowable price band after the initial period. - ANCUSDT: The
Zparameter was increased from 15% to 25%.
Order Rule Updates
The maximum allowable size for various types of market orders was greatly increased. This allows larger traders to execute orders more efficiently without being overly restricted.
LUNAUSDT Perpetual Contract:
All market order types (Close All, Stop-Loss/Take-Profit, Standard, and Planned) had their maximum size increased from 14,000 contracts to 100,000 contracts.
ANCUSDT Perpetual Contract:
All market order types had their maximum size increased from 3,000 contracts to 50,000 contracts.
Frequently Asked Questions
What is price precision in trading?
Price precision is the smallest unit by which the price of an asset can change. A finer precision, like moving from 0.001 to 0.0001, allows for tighter bid-ask spreads and more precise order entry, which generally improves market liquidity and execution quality for traders.
Why were the funding rate limits temporarily increased?
During periods of extreme market volatility, the standard funding rate limits may be too restrictive. Temporarily widening these limits allows the funding payment mechanism to continue functioning effectively, helping to keep the perpetual contract price aligned with the underlying spot index price even in turbulent conditions.
How do tiered margin rules protect traders?
Tiered margin rules automatically reduce the amount of leverage available as a trader's position size increases. This risk management feature protects traders by preventing them from taking on excessively large, highly leveraged positions that could lead to rapid, significant losses. It also protects the overall stability of the trading platform.
Will my existing orders be canceled when precision changes?
No. When a price precision adjustment occurs, all your existing open orders remain active in the system and will be matched based on the old precision rules. However, these orders will be displayed in your interface using the new, updated precision format.
What is the purpose of a multi-exchange index?
A multi-exchange index price aggregates data from several major trading platforms. This creates a more robust and accurate reference price that is less likely to be manipulated by anomalous trading activity on any single exchange, ensuring fairer pricing for derivatives like perpetual contracts.
Where can I learn more about managing risk with these new parameters?
For a deeper dive into how to adjust your strategy in response to changing market parameters and leverage tools effectively, you can discover comprehensive risk management strategies used by experienced traders.
Note: All trading parameters are subject to change based on market conditions. The platform reserves the right to make further adjustments without prior announcement to ensure market stability.