What is Binance Smart Arbitrage? Binance Smart Arbitrage beginners' use steps

Binance Smart Arbitrage: A Guide to Earning USDT Passive Income

Binance Smart Arbitrage is an automated arbitrage tool provided by the Binance platform. It uses futures and spot arbitrage strategies to help users earn capital rate returns in a relatively low-risk environment. This article will explain its operating principles in detail and provide a guide to beginners.

1. What is Binance Smart Arbitrage?

Binance Smart Arbitrage belongs to Binance's "Advanced Coin Earning" product, which automatically implements the futures and spot arbitrage strategy. Users only need to select the currency and invest in USDT, and the system will automatically buy in the spot market and sell equivalent assets in the perpetual contract market to hedge price risks, and the final return comes from the capital fee rate.

2. Detailed explanation of the principle of futures and spot arbitrage

Spot futures and spot arbitrage refers to an arbitrage strategy that performs opposite operations in the spot market and the perpetual contract market at the same time. For example, buy BTC in the spot market and sell equivalent BTC contracts in the perpetual contract market. Regardless of the rise and fall of BTC prices, the profits and losses on both sides offset, and the risk is relatively low.

3. How to make profits through Binance Smart Arbitrage?

The source of profit for Binance Smart Arbitrage is the capital fee rate. The capital rate is a mechanism in the perpetual contract market, which is used to balance the positions of long and short parties and make the contract price consistent with the spot price. When the market is bullish, the capital rate is positive and the long pays the short; when the capital rate is negative, the short pays the long. Binance Smart Arbitrage earns the benefits brought by positive capital rates by hedging price risks.

4. Example of capital rate operation

Assuming that USDT is invested 1000 USDT for BTC/USDT arbitrage, the funding rate is 0.01%. Settlement every 8 hours, if the funding rate remains unchanged, you can get a profit of 0.3 USDT (1000 0.01% 3) per day.

5. Binance Smart Arbitrage Operation Example

Invest 1000 USDT for BTC/USDT arbitrage, the system will automatically buy 1000 USDT of BTC spot and sell equivalent BTC perpetual contracts. Regardless of the rise and fall of BTC prices and the profit and loss offset, the final income comes from the capital fee rate.

6. Operation steps for Binance Smart Arbitrage novices

1. Preparation: Register a Binance account and make sure there is enough USDT in the account.
2. Enter page: Open the Binance App, find "Binance Financial Management", and click "Smart Arbitrage" to enter.
3. Select currency and amount: Select the currency you want to arbitrage (such as ETH/USDT) and enter the investment amount. The system will reserve some funds as a buffer.
4. Confirm and start: After confirming that the settings are correct, check the agreement and click "Confirm" to start the arbitrage.

7. Check the operation status and redemption funds

On the "Funds"-"Financial Management"-"Binance App" page, you can view the operation of smart arbitrage and perform redemption operations at any time.

8. Things to note when using Binance Smart Arbitrage

• Properties: Automatic, low risk, easy to operate.
• Risk: Fund rate fluctuations, price spread risks, transaction costs, potential forced liquidation risks. It is recommended to continue to pay attention to changes in market conditions and capital rates.

9. The difference between Binance Smart Arbitrage and Binance Arbitrage Robot

Smart arbitrage is more suitable for beginners, with simple operation, limited currency selection and low risk; arbitrage robots are more flexible, but have higher operation difficulty and are suitable for experienced users.

10. Conclusion

Binance Smart Arbitrage provides a relatively low-risk passive income method, but users still need to understand their operating mechanism and potential risks and operate with caution.

The above is the detailed content of What is Binance Smart Arbitrage? Binance Smart Arbitrage beginners' use steps. For more information, please follow other related articles on the PHP Chinese website!