Product Description

Perpetual Contract on Bitcoin/Tether Pair (BTCF0:USTF0)

The following provides an overview of terms of the Bitcoin/Tether Perpetual Contract (BTCF0:USTF0). All terms herein have the same definitions that are set forth in the Derivative Terms of Service and the Funding Payment Summary for the Perpetual Contracts. This Product Description was last updated October 3, 2019.

The Product: BFXD offers a new type of Perpetual Contract that is a derivative contract that references the Bitcoin/Tether Reference Token Pair (BTC/USDt).

Settlement of Transactions in the Perpetual Contract and Funding Payments: Transactions in the Perpetual Contract and Funding Payments will be settled exclusively using the stablecoin, Tether.

Margin Collateral: Permissible Margin Collateral to satisfy margin requirements is Tether.

The Forced Liquidation Price: The Price at which a Perpetual Contract position will be forcibly liquidated by BFXD will be the specific Mark Price denominated by BFXD at the time a position is established or modified.

Calculation of the Mark Price: Beginning October 3, 2019 at 9:00 AM UTC, the Mark Price shall be determined on the basis of and be a specific valuation of the BFX Composite Index (BFXCI). The BFXCI is designed to be an equally weighted index of the prevailing published prices of the Reference Token Pair traded in the Bitfinex.com peer-to-peer Digital Token spot market and up to three other exchanges with published pricing information for the Reference Token Pair. BFXD will use automated processes that apply programmed parameters for determining which particular published prices should be included in the calculation of the BFXCI. In this connection, whenever BFXD, in its sole judgment based on BFXD’s analysis of information at the time of valuing the BFXCI, determines that a published price for a particular exchange either exceeds a programmed standard deviation or BXFD otherwise determines the published price to be a materially unreliable expression of the prevailing market value for the Referenced Token Pair, BXFD will adjust the calculation of the BFXCI to exclude that published price for that particular exchange. BXFD, without notice to market users and based on BFXD’s sole discretion and judgment, may change the programmed parameters for inclusion of published prices of the Referenced Token Pair in the calculation of the BFXCI. In the event that, in the sole judgment of BXFD, the published exchange prices do not support a reliable basis for setting the BFXCI and establishing the Mark Price, BXFD will set the Mark Price using solely the prevailing price of the Reference Token Pair traded in the Bitfinex.com peer-to-peer Digital Token spot market. Many pricing and market factors could contribute to treating a particular published price for a Referenced Token Pair as unreliable and therefore excluding it from the calculation of the BFXCI. Factors that may affect the inclusion of published prices include, but are not limited to, whether data is unacceptably stale or published prices vary beyond standard deviations or otherwise reflect a materially unreliable expression of the prevailing market value.

Funding Payments: The Perpetual Contract is subject to a requirement of Funding Payments. Whether a Funding Payment will be required depends on the Average Spread between (1) the prices of the Bitcoin/Tether Perpetual Contract (BTCF0:USTF0) and (2) the Mark Price (i.e., the price of the BFXCI at the time described in the Funding Payment Summary for the Perpetual Contracts). Funding Payments may require a pause in trading in the Perpetual Contract (BTCF0:USTF0) market for a period of time lasting several seconds or longer. Please review the further information on Funding Payments in the Funding Payment Summary for the Perpetual Contracts.

The product details are as follows:

Ticker Symbol

BTCF0:USTF0

Underlying Pair

Bitfinex.com BTC/USDt

Max Leverage

100x

Margin Collateral

USDt

Pay-off Type

Linear

Length

Perpetual

Fees and Funding Payments

Transaction Fees and

Funding Payments

Minimum Order Size

0.01 BTCF0

Price Tick Size

Dynamic and based on prices in the Perpetual Contract (BTCF0:USTF0)

Forced Liquidation Price

Mark Price at which BXFD will forcibly liquidate the position

Position Liquidation Event

When BXFD forcibly liquidates a Perpetual Contract (BTCF0:USTF0) position against an open market order

Position Termination Event

When BXFD forcibly liquidates a Perpetual Contract (BTCF0:USTF0) position against an open market position at a price set by BFXD

Example 1:

A trader places an order to buy a Perpetual Contract (BTCF0:USTF0) equivalent to 1 BTCF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The trader must post at least 100 USTF0 of initial Margin Collateral to support the position.

10,000 * 1.00% = 100 USTF0

The Maintenance Margin requirement is 0.50%, and BXFD will establish the Forced Liquidation Price at the Mark Price.

10,000 * (1 - 0.005) = 9,950

If the market trades at or below this Forced Liquidation Price, the position would be liquidated and all Margin Collateral forfeited into the Liquidation Fund.

Example 2:

A trader places an order to buy a Perpetual Contract (BTCF0:USTF0) equivalent to 1 BTCF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The market moves higher to 10,020, at which time the trader exits the position by executing an order to sell the Perpetual Contract (BTCF0:USTF0) equivalent to 1 BTCF0 at that price.

Excluding fees, the trader has made a profit of 20 USTF0.

1 BTCF0 * (10,020 - 10,000) = 20 USTF0 profit

Example 3:

A trader places an order to buy a Perpetual Contract (BTCF0:USTF0) equivalent to 1 BTCF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The market moves lower, and the trader exits at 9,980. The trader would then have incurred a loss of 20 USTF0, excluding fees.

1 BTCF0 * (9,980 - 10,000) = -20 USTF0 = 20 USTF0 loss, excluding fees.

For a description of product fees and margin requirements, please see the Derivative Fee and Margin Schedule.

Perpetual Contract on Ether/Tether Pair (ETHF0:USTF0)

The following provides an overview of terms of the Ether/Tether Perpetual Contract (ETHF0:USTF0). All terms herein have the same definitions that are set forth in the Derivative Terms of Service and the Funding Payment Summary for the Perpetual Contracts. This Product Description was last updated October 3, 2019.

The Product: BFXD offers a new type of Perpetual Contract that is a derivative contract that references the Ether/Tether Reference Token Pair (ETH/USDt).

Settlement of Transactions in the Perpetual Contract and Funding Payments: Transactions in the Perpetual Contract and Funding Payments will be settled exclusively using the stablecoin, Tether.

Margin Collateral: Permissible Margin Collateral to satisfy margin requirements is Tether.

The Forced Liquidation Price: The Price at which a Perpetual Contract position will be forcibly liquidated by BFXD will be the specific Mark Price denominated by BFXD at the time a position is established or modified.

Calculation of the Mark Price: Beginning October 3, 2019 at 9:00 AM UTC, the Mark Price shall be determined on the basis of and be a specific valuation of the BFX Composite Index (BFXCI). The BFXCI is designed to be an equally weighted index of the prevailing published prices of the Reference Token Pair traded in the Bitfinex.com peer-to-peer Digital Token spot market and up to three other exchanges with published pricing information for the Reference Token Pair. BFXD will use automated processes that apply programmed parameters for determining which particular published prices should be included in the calculation of the BFXCI. In this connection, whenever BFXD, in its sole judgment based on BFXD’s analysis of information at the time of valuing the BFXCI, determines that a published price for a particular exchange either exceeds a programmed standard deviation or BXFD otherwise determines the published price to be a materially unreliable expression of the prevailing market value for the Referenced Token Pair, BXFD will adjust the calculation of the BFXCI to exclude that published price for that particular exchange. BXFD, without notice to market users and based on BFXD’s sole discretion and judgment, may change the programmed parameters for inclusion of published prices of the Referenced Token Pair in the calculation of the BFXCI. In the event that, in the sole judgment of BXFD, the published exchange prices do not support a reliable basis for setting the BFXCI and establishing the Mark Price, BXFD will set the Mark Price using solely the prevailing price of the Reference Token Pair traded in the Bitfinex.com peer-to-peer Digital Token spot market. Many pricing and market factors could contribute to treating a particular published price for a Referenced Token Pair as unreliable and therefore excluding it from the calculation of the BFXCI. Factors that may affect the inclusion of published prices include, but are not limited to, whether data is unacceptably stale or published prices vary beyond standard deviations or otherwise reflect a materially unreliable expression of the prevailing market value.

Funding Payments: The Perpetual Contract is subject to a requirement of Funding Payments. Whether a Funding Payment will be required depends on the Average Spread between (1) the prices of the Bitcoin/Tether Perpetual Contract (BTCF0:USTF0) and (2) the Mark Price (i.e., the price of the BFXCI at the time described in the Funding Payment Summary for the Perpetual Contracts). Funding Payments may require a pause in trading in the Perpetual Contract (BTCF0:USTF0) market for a period of time lasting several seconds or longer. Please review the further information on Funding Payments in the Funding Payment Summary for the Perpetual Contracts.

The product details are as follows:

Ticker Symbol

ETHF0:USTF0

Underlying Pair

Bitfinex.com ETH/USDt

Max Leverage

100x

Margin Collateral

USDt

Pay-off Type

Linear

Length

Perpetual

Fees and Funding Payments

Transaction Fees and

Funding Payments

Minimum Order Size

0.01 ETHF0

Price Tick Size

Dynamic and based on prices in the Perpetual Contract (ETHF0:USTF0)

Forced Liquidation Price

Mark Price at which BXFD will forcibly liquidate the position

Position Liquidation Event

When BXFD forcibly liquidates a Perpetual Contract (ETHF0:USTF0) position against an open market order

Position Termination Event

When BXFD forcibly liquidates a Perpetual Contract (ETHF0:USTF0) position against an open market position at a price set by BFXD

Example 1:

A trader places an order to buy a Perpetual Contract (ETHF0:USTF0) equivalent to 1 ETHF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The trader must post at least 100 USTF0 of initial Margin Collateral to support the position.

10,000 * 1.00% = 100 USTF0

The Maintenance Margin requirement is 0.50%, and BXFD will establish the Forced Liquidation Price at the Mark Price.

10,000 * (1 - 0.005) = 9,950

If the market trades at or below this Forced Liquidation Price, the position would be liquidated and all Margin Collateral forfeited into the Liquidation Fund.

Example 2:

A trader places an order to buy a Perpetual Contract (ETHF0:USTF0) equivalent to 1 ETHF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The market moves higher to 10,020, at which time the trader exits the position by executing an order to sell the Perpetual Contract (ETHF0:USTF0) equivalent to 1 ETHF0 at that price.

Excluding fees, the trader has made a profit of 20 USTF0.

1 ETHF0 * (10,020 - 10,000) = 20 USTF0 profit

Example 3:

A trader places an order to buy a Perpetual Contract (ETHF0:USTF0) equivalent to 1 ETHF0 at a price of 10,000 USTF0 with 100x leverage, and the order is fully executed at that price.

The market moves lower, and the trader exits at 9,980. The trader would then have incurred a loss of 20 USTF0, excluding fees.

1 ETHF0 * (9,980 - 10,000) = -20 USTF0 = 20 USTF0 loss, excluding fees.

For a description of product fees and margin requirements, please see the Derivative Fee and Margin Schedule.