How fiat deposit works
Follow 3 easy steps:
— Create an account on Xena Exchange
— Create an account on Copper and transfers some amount of funds to your Copper account
— Delegate some amount of funds to your Xena Exchange account with Copper (in the same way you would transfer BTC in the Off-Exchange-Settlement model).
Terms and conditions:
— All clients’ accounts in Xena Exchange are still nominated in BTC, fiat is tracked separately as collateral and changes only as a result of deposits and withdrawals.
— The fiat collateral deposited to the account yields to the equity of the account with some predefined haircut. E.g. if a client has 1 BTC and $10000 in the account, at any moment in time the equity will be calculated as:
- 1 BTC + $10000 / 9900 (BTC/USD rate at the moment) * 70% (haircut) = 1.71 BTC
- The client can trade as if they had 1.71 BTC in their account, i.e. they can use 1.71 BTC as initial margin; the positions will be liquidated if the maintenance margin is higher than 1.71 BTC, etc.
— All PnL is settled to the client’s account in BTC in accordance with the usual Xena Exchange Rules of Operations:
- If the client has profit, they can withdraw it to the Copper account
- If the client has a loss (it’s possible that the BTC balance of his account on Xena Exchange is negative up to some limit), Xena Exchange will block the ability to withdraw the fiat collateral (or at least part of it) until the client covers the BTC shortage. The client can get BTC e.g. using Copper's conversion services
- Xena Exchange may charge interest on clients’ negative balances
- In a limited number of cases, Xena Exchange may forcibly convert part of the fiat collateral into BTC using Copper’s conversion (that will be defined in the Rules of Operations; the obvious ones include the client’s negative balance exceeding the certain predefined limit or the client not covering the shortage within the certain period).