1.1 These rules are formulated in accordance with the principles of fairness in order to regulate the lend and margin trading of digital assets, maintain market order and protect the legitimate rights and interests of investors.
1.2 The term " lend and margin trading" as used in these rules refers to the act of an investor who provides guaranty to BW (hereinafter referred to as the company) and borrows assets through bw.com (hereinafter referred to as bw.com) and uses them for investment.
1.3 These rules shall apply to currency lending and margin trading conducted in BW.com. Where no provision is made in these rules, the <BW terms of service> and other relevant provisions of BW.com shall apply.
2.Interest Rate and Interest Repayment Rules
2.1 The borrower shall use its assets in the BW.com margin account as guaranty for the margin trading.
2.2 After successful lend, the assets will be delivered immediately and interest will be calculated. The lent assets are immediately transferred to the borrower's BW.com margin account, and the borrower can use it for margin trading in BW.com.
2.3 The borrower may repay the debt in advance and pay interest according to the actual number of days borrowed. If less than one day, the interest shall be calculated on one day.
3.1 First return the earliest order of lend. First repay interest, then repay principal. After the principal and interest payable on a single debit order are fully paid off, the status of the single debit order is converted to paid off, and the interest on the order is no longer calculated. In case of candy, fork, etc., then the extra valuable token generated by candy or fork or other events will be returned together with the lent token, as specified in the announcement at that time.
4.Risk Control and Risk Reserve
4.1 The investors participating in the lending shall take the digital assets in their BW.com current margin trading pair account as their guaranty. Digital assets in other accounts are excluded from their collateral value.
4.2 Total value of assets of the investor = its total value of current margin trading pair account-current market value of interest payable
Total value of investor's liabilities = its total lent value of current margin trading pair account
Investor deposit rate = (total assets - total liabilities)/total liabilities
4.3 An early warning mechanism for the risk ratio of margin trading
The warning risk rate of the user's position = the risk rate of liquidation in the market +2.5%
When the risk rate of the investor reaches the warning line, the system will send a prompt message to the reserved contact information of the investor to alert the investor of the risk.
When the risk rate of the investor reaches the risk rate of liquidation, the system will automatically trigger liquidation, liquidate/reduce the positions held by the investor, and automatically repay all liabilities of the investor. If an investor has more than one loan, his assets will be repaid in the order in which his liabilities occurred, with the first debt taking precedence. If all the assets of the user are insufficient to repay all its debts, the lender has the right to recover the debts from the user.
4.4 Investors should pay attention to investment risks and timely adjust the holding ratio to avoid risks. All losses caused by liquidation are borne by the investors themselves.
4.5 the company will manage the total market value of the lent currency. When the total market value of the lent currency reaches the upper limit set by the company, the company will automatically stop lending currency until the total market value of the lent currency falls below the upper limit.
4.6 the company will adjust the upper limit of the total market value of the lent currency according to the actual operation of the market and the degree of risk.
5. Behavior Monitoring
The investor shall abide by relevant laws and regulations of the country and relevant regulations of BW.com on trading and margin trading in the process of lending currency. The company has the right to suspend or cancel the margin trading authority, take over the investor's rights and debts of the account, forcibly liquidate the account positions and other risk control measures for specific users in BW.com account when necessary, so as to maintain the stability of the digital asset market.
6.Noun Explanation and Calculation Formula
This article explains a series of terms for margin trading: details of the "margin assets" column at the top of the margin trading area, currency margin multiple, liquidation description, short selling, etc.
Margin trading pair account assets: the total assets in the margin trading pair account includes available assets + frozen assets.
Transfer assets: token transferred from other accounts to margin trading pair account through asset transfer.
Lend assets: token borrowed through a margin trading pair account using transferred assets as deposit.
Available assets: tokens that users can use to place orders in margin trading pair account, including transferred asset and lent asset.
Frozen assets: tokens that users cannot use to place orders in margin trading pair account, generally refers to the tokens in the process of placing orders.
Maximum loanable: means the maximum loanable limit of the current currency pair. BW.com will calculate the maximum amount of margin a user can borrow based on limits such as maximum margin and platform risk control rules.
The maximum margin available is calculated as: maximum margin available =(total account assets - outstanding lent assets - outstanding interest)*(maximum margin multiple -1)- outstanding lent assets
Example of maximum margin: the total assets of the user are 5 BTC, 1 BTC has not been repaid, and the interest 0.01 BTC has not been repaid. If the maximum margin multiple is 20 times, the maximum margin can be borrowed = (5-1-0.01) * (20-1) -1=74.81 BTC
6.3 Risk Rate and Liquidation:
Risk rate: an index to evaluate the risk of the currency margin account.
When the risk rate is less than or equals to the risk rate of liquidation in the market where the user is located, the system will force the liquidation/reduction of positions and inform the user via SMS/email.
Risk rate formula = total assets/amount borrowed * 100%
= [(buyer token total assets – buyer token unpaid interest)/ latest price +(seller token total assets – seller token unpaid interest)]/(buyer token borrowed assets/latest price + seller token borrowed assets)*100%
Expect liquidation price: user must pay a certain percentage of the deposit for every loan, when adverse changes in the market, such as market reversal occurs, the change in the opposite direction, and the current margin trading pair account total assets shrink to a certain extent, the system will force the current margin trading pair account assets liquidation according to the market, settlement of loan and interest by placing sell orders.
The expected liquidation price = (buyer token borrowing amount * the risk rate of liquidation + buyer token unpaid interest – buyer token total assets)/(seller token total assets – seller token unpaid interest – seller token borrowing amount * the risk rate of liquidation)
7.1 The investor shall sign the user agreement for BW.com's lend business through BW.com before participating in the relevant business.
7.2 Investors can use BW.com to entrust the company to borrow/lend digital assets. The types of entrustment include BTC and other digital assets approved by the company.
7.3 The company provides Information dissemination, regulatory and risk control services, does not provide any revenue assurance and guaranteed promises to users in BW.com margin trading. Investors should have full awareness of the risk of margin trading, and investors are invited to assess their own potential losses and participate voluntarily on the basis of ensuring that the risks are manageable and affordable.
8.1 These rules are formulated by BW.io and become effective after being announced to all platform investors. The same applies to amendments.
8.2 The interpretation of these rules is the responsibility of BW.io.
8.3 These rules shall come into effect on February 26, 2020.
Download BW APP: https://www.bw.io/appDownload
BW, Bit World, Better World
BW.com Global Operations Team
February 26, 2020