To foster a secure trading environment and maintain a high-quality user experience, cryptocurrency exchanges periodically review and delist certain trading pairs. This process is a standard part of market risk management. The following guide explains the general procedures and key considerations when a platform decides to retire specific perpetual contracts and leverage tokens.
What Happens When a Perpetual Contract is Delisted?
The delisting of a perpetual contract is a structured process designed to protect users and ensure an orderly market closure.
The Delisting Timeline and Procedure
Ahead of the official delisting time, the exchange will halt all trading activity for the specified contract. The standard process involves:
- Cancellation of Orders: All pending user orders for the contract are automatically canceled.
- Settlement Price Determination: User positions are settled at a fair price, typically calculated as the arithmetic average of an index price from the hour before delisting.
- Final Funding Rate: The last funding rate applied before delisting is set to zero, meaning no final funding fee is paid or received.
- No Additional Fees: The settlement process does not incur extra交割 (delivery) or transaction fees for the user.
Important Risk Management for Traders
Market volatility can increase significantly before a contract is delisted. Users are strongly advised to:
- Proactively reduce their leverage ratios.
- Close out positions well in advance of the delisting time.
- Understand that any incurred穿仓 (insurance fund loss) will be covered first by the exchange's risk reserve fund. Any remaining deficit may lead to an automatic deleveraging process, starting with the most profitable positions on the platform.
Post-Delisting Account Considerations
Following the settlement of positions, users who held a position value exceeding a specific threshold (e.g., $10,000) at the time of delisting may experience a temporary restriction on asset transfers within their trading account. This is a security measure that typically lifts after a short period, such as 30 minutes. Historical order and bill records remain available for download from the desktop order center for users who wish to keep a backup.
Adjustments to Price Limit Rules
To ensure a smooth wind-down, exchanges often adjust the price limit rules for the affected contract in the 48 hours leading up to delisting. These adjustments progressively tighten the maximum allowable price deviation from the index price, helping to prevent extreme volatility and market manipulation in the contract's final hours.
The Impact on Leverage Trading and Lending Services
The delisting process also affects associated margin trading pairs and lending services.
Service Wind-Down for Leverage Pairs
For a margin trading pair scheduled for removal:
- The ability to borrow the specified tokens is disabled at a set time before the full delisting.
- The exchange will cancel all existing market orders for the pair.
- Users who have borrowed or have collateral in these pairs must repay their loans before the delisting time. Failure to do so will result in the system initiating a forced repayment, which could lead to losses due to unfavorable market prices.
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Understanding Discount Rate Adjustments
In cross-margin mode, the value of different crypto assets held as collateral is discounted to their US dollar value. This discount rate accounts for varying levels of market liquidity and volatility among tokens. When a token is scheduled for delisting, its discount rate is often adjusted to zero, meaning it can no longer be used as effective collateral for margin trading. This is a preventative measure to mitigate risk as the token's liquidity decreases.
Frequently Asked Questions
What should I do if I hold a position in a contract that is being delisted?
You should actively manage your risk before the delisting time. It is highly recommended to close your position manually to avoid automatic settlement, which could occur during a period of high volatility. Ensure you understand the settlement price mechanism.
Why is the discount rate for a token adjusted to zero before delisting?
Setting the discount rate to zero removes the token's value as collateral in cross-margin accounts. This is a protective measure for the overall trading ecosystem, as the token's liquidity is expected to drop significantly after the trading pair is removed, making it a high-risk asset to hold as margin.
Can I still access my trade history after a pair is delisted?
Yes, historical records of your orders and transactions for the delisted pair typically remain accessible through the exchange's order center on the desktop platform. You can download these records for your personal accounting and review.
What happens if I don't repay a borrowed coin before its pair is delisted?
If you fail to repay a borrowed coin before the deadline, the system will execute a forced repayment. This process may occur at an unfavorable market price, potentially resulting in a loss for you, especially if the market is volatile. Always repay loans ahead of time.
Are there any fees charged during the contract settlement process?
No, the settlement process upon delisting does not involve additional交割 fees (delivery fees) or transaction costs. The final funding rate is also set to zero to avoid a last funding fee charge.
How long do transfer restrictions last after delisting?
A temporary restriction on transferring assets within your trading account may be placed if your settled position value was high. This restriction is a security protocol and usually lasts for a short, predefined period, such as 30 minutes, after which full account functionality is restored.