USDC Linear Perpetuals: Collateral, Payouts, and Position Sizing
Summary
The document explains how USDC collateral changes the experience of trading linear perpetual futures compared with BTC-collateralized inverse contracts. Both contract types can produce the same dollar profit or loss for equivalent BTC exposure, but settle that result in different currencies: inverse contracts pay in BTC, while linear contracts pay in USDC. Holding BTC as account collateral also leaves the account’s dollar value exposed to BTC price changes when no hedge is in place; a USDC balance is dollar denominated by design.
It also describes the difference in order sizing. Inverse contracts specify a fixed dollar notional, while linear contracts specify a fixed amount of the underlying asset, with the examples showing how the interface converts and rounds quantities. USDC collateral can be shared across several linear altcoin contracts, supporting concurrent positions. The operational limitation highlighted is that deposits and withdrawals support only ERC-20 USDC on Ethereum; the article says USDC options were unavailable at the time. Contract details and availability may change.
Key ideas
- Equivalent inverse and linear positions can have matching dollar P&L while settling in BTC and USDC respectively.
- A BTC collateral balance retains exposure to BTC’s dollar price even when no futures position is open.
- Inverse orders use dollar notional sizing, whereas linear orders use a fixed quantity of the underlying asset.
- A shared USDC margin pool can support positions across multiple linear altcoin perpetuals.
- The article specifies Ethereum ERC-20 as the supported USDC transfer network at the time.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.