By r3xol
Dual Investment involves 2 different cryptocurrencies and is a non-principal protected structured product with enhanced yield. It lets you deposits crypto such as Bitcoin and BUSD.
As at November 2021, Binance launched the 66th phase of Dual Investment products with addition of new altcoins like SOL, MATIC, ADA, BNB, DOT, BCH for those interested in subscribing.
Why do People use Dual Investment?
Doubling your money or Cryptocurrency is often used as bragging rights at parties and around your friends. Fake promises to double one’s money can also be made by overzealous advisors or worse, scammers and fraudsters. Perhaps the urge to double one’s Cryptocurrency comes from deep in our investor psychology — the risk-taking part of us that loves the quick buck. When it comes to efforts to do so, however, two critical elements that are interrelated need to be considered: time and risk. This refers both to your (investing) time horizon and risk tolerance, as well as the attributes of the investment itself, such as the time it might take for the investment to double, which in turn is a function of the riskiness of the investment.
How to Subscribe to Dual Investment
- Login to your Binance account… From your Profile>>> Click on Earn>>> Click on Binance Earn.
Or click on the link to take you there directly- https://www.binance.com/en/dual
2. Click on Dual Investment.
3. There is a different strike price, delivery date and Annual Percentage of yield (APY) for each product.
There are 2 types of Dual Investment products namely; Up & Exercised and Down & Exercised.
- For Up-and-Exercised products, If the Settlement Price is above the Strike Price, the product is “exercised” .
- The product is exercised if Settlement Price ≥ Strike Price
- The product is not exercised if Settlement Price < Strike Price
2. For Down-and-Exercised products If the Settlement Price is below the Strike Price, the product is “exercised”.
- The product is exercised if Settlement Price ≤ Strike Price
- The product is not exercised if Settlement Price > Strike Price
How Dual Investment works
Your return is denominated in the deposit currency or the alternate currency depending on the product chosen.
- When a product is exercised, your subscription amount and interest income will be converted into the alternate currency with a strike price as conversion rate. The below formula shows the total amount you will be receiving:
Up-and-Exercised:
(Subscription Amount * Strike Price) * [1 + (APY% * Deposit Days / 365)]
Down-and-Exercised:
(Subscription Amount / Strike Price) * [1 + (APY% * Deposit Days / 365)]
- When a product is not exercised, your subscription amount and interest income will not be converted and you will receive in the deposit currency. The below formula shows the total amount you will be receiving:
Subscription Amount * [1 + (APY% * Deposit Days / 365)]
An Example of Subscription with BTC on the Dual Investment platform is cited below;
John invests 1 BTC in the Dual Investment.
The current price of BTC is $25,000.
He decides to subscribe to the double investment product in BTC.
Product details are as follows :
- Duration: 30 days
- Annual Percentage of yield: 40%
- Strike price: $45,000
When his subscription expires, 2 scenarios are possible:
- Scenario 1: The price of BTC is higher than the strike price of the product (BTC> $45,000).
- John receives the value of his 1 BTC in BUSD + the 40% annual yield.
- 1*45000*[1+(40%*30/365)] = 46479.45BUSD. The BUSD is returned to his Spot wallet.
- Scenario 2: BTC price is below strike price (BTC <$45,000).
- John receives his initial BTC + the 40% annual yield.
- 1 BTC * [1+(40% * 30/365)] = 1.0328767123BTC. The BTC is returned to his Spot wallet.
Risks involved with Dual Investment
As there are risks involved with anything and everything in life, there are also risks you must be aware of concerning Dual Investment; The reference price mentioned in the product details may be readjusted according to the price on the Spot market, up to 24 hours after the start of the offer period. Subscriptions cannot be canceled.
Conclusion
It is important to note that you’re never a loser when getting a subscription as you’re always generating interest on the amount paid either in BTC or altcoins. Making the right decision is now up to you in order to gain more.
Create a free Binance account https://www.binance.com/en/buy-sell-crypto?ref=ZCF73TU7
Happy Trading ;)
