The creation of a new perpetual contract for Floki Inu (FLOKI), a meme cryptocurrency modelled after the Shiba Inu breed of dog and a rival to the well-known Shiba Inu token, was announced by Binance Futures on Friday.
On May 6, at 4:30 p.m. UTC, the perpetual contract, which provides up to 20x leverage, became live. This action further legitimises the meme-based cryptocurrency, whose market value and popularity have been rising.
A form of derivative instrument known as perpetual contracts enables traders to purchase or sell an underlying asset, in this case Floki Inu, without regard to the asset’s expiration date. These contracts enable long or short bets with leverage by closely tracking the asset’s current price.
Typically every eight hours, funding rates are switched between long and short positions to keep the contract’s price around the current price of the underlying asset. Even though the perpetual contract has no expiration date, this technique makes sure that the price stays in accordance with the real asset value.
The 1000FLOKIUSDT perpetual contract settles in Tether (USDT), a stablecoin linked to the U.S. dollar, and is based on the value of 1,000 FLOKI tokens. The contract has a 0.00001 tick size, a limited funding rate, and is open for trading around-the-clock.
Users can trade the perpetual contract across various margin assets thanks to Binance’s multi-asset feature, subject to any relevant haircuts. This implies that when trading the 1000FLOKIUSDT perpetual contract, traders may utilise cryptocurrencies like BTC as margin.
The crypto giant also said that it could occasionally change the details of the 1000FLOKIUSDT perpetual contract depending on market risk circumstances. This can entail modifying the minimum leverage, tick size, starting margin, or maintenance margin requirements.
