USDC Linear Perpetuals: Collateral, P&L, and Position Sizing
Summary
This article explains how USDC-settled linear perpetual contracts differ from inverse contracts that use BTC as collateral. It compares equivalent BTC positions and shows that their dollar profit or loss can match, while the resulting balance is held in different currencies: BTC for the inverse contract and USDC for the linear contract. A USDC balance remains stable in dollar terms when no position is open, whereas a BTC balance continues to fluctuate with BTC’s price.
The article also explains the sizing convention: inverse orders are fixed in dollar notional, while linear orders are fixed in units of the underlying asset. It notes that several ALT-USDC contracts can share collateral, which can support multi-coin positions and pairs trades. The discussion is an exchange product overview, not an evaluation of performance or trading risks. It specifies ERC-20 USDC on Ethereum for deposits and says options were not then available with USDC collateral.
Key ideas
- Equivalent inverse and linear positions can produce the same dollar P&L while paying it in different currencies.
- BTC collateral leaves an account exposed to BTC price changes even when positions are closed.
- Linear USDC contracts size positions in units of the underlying asset, while inverse contracts use dollar amounts.
- Multiple ALT-USDC positions can draw on a shared USDC collateral pool.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.