What is KuCoin Dual Investment?
Dual investment is a high-yield structured wealth management financial product involving two different currencies. It is a non-principal protected financial product with a floating return. The returns will be adjusted based on the predetermined benchmark that is called “Target Price.”
Put simply, users of a Dual Investment have to deposit one cryptocurrency and can earn income based on two assets. After a crypto asset is deposited, it will be locked in yield and allows users to earn as the value of the investment asset increases. How much investors can earn will depend on how their staked asset performs at maturity.
Why is Dual Investment a Non-Principal-Protected Financial Product?
Dual Investment is a non-principal-protected product whose main risk comes from possible changes in market prices. When there is high volatility in the market, it may be difficult for users to predict potential differences between the target price and the market price at the time of maturity. Therefore, it may also be difficult to predict what the settlement currency will be. Therefore, before subscribing, make sure you understand the characteristics of the product as well as the potential risks.
For example:
User A invested 1 BTC to subscribe to a KuCoin Dual Investment product with a target price of 20,000, an APR of 300%, and a term of 14 days. When the product expires, user A will receive the following:
If the settlement price of BTC_USDT is ≥ 20,000, the payment will be settled in USDT, and the payment amount is = 1 * (1+300% * 14/365) * 20,000 = 22,301 USDT
If the price of BTC_USDT rises to 23,000, the original value of 1 BTC of user A is 23,000 USDT (if user A did not buy the double investment product at that time), and user A currently only has 22,301 USDT. The difference between the two is the implied loss, which is 699 USDT.
How to Calculate Your Return?
Example 1: Investing in BTC to buy a BTC dual currency product
User A invested 1 BTC to buy a KuCoin Dual Investment product with a targetprice of 20,000, APR of 300%, and a term of 14 days. When the product expires, user A will receive:
(1) If the settlement price of BTC_USDT < 20,000, the payment will be settled in BTC, and the payment amount is = 1 * (1+300%* 14 /365)=1.115 BTC
(2) If the settlement price of BTC_USDT is ≥ 20,000, the payment will be settled in USDT and the payment amount is = 1 * (1+300%* 14/365) * 20,000= 22,301 USDT
Example 2:Investing in USDT to buy a BTC-U dual currency product
User B bought 20,000 USDT on KuCoin Dual Investment product with a target price of 20,000, APR of 300%, and a term of 14 days. When the product expires, user B will receive:
(1) If the settlement price of BTC_USDT ≤20,000, the payment will be settled in BTC and the amount of the payment is =20,000 *(1+300%* 14 /365)/ 20,000=1.115 BTC
(2) If the settlement price of BTC_USDT > 20,000, the payment will be settled in USDT, and the payment amount is = 20,000 *(1+300% * 14 /365) = 22,301 USDT
In summary, when the product is settled, the numerical relationship between the settlement price and the target price can change the final currency collected by the user. The user may finally receive the profits in a different currency.
Why is the APR Span of Dual Investment Products so Various?
APR and Target Price are two important parameters of Dual Investment Products and would change hand in hand. A higher APR means the closer the target price is to the current price and the higher the uncertainty investors need to bear. Therefore, investors can choose the corresponding product target price and APR according to their risk appetite.
Explanation Of Terminology
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Target Price |
The target price is a benchmark price that is used to determine the currency of investors' returns. On the expiry day, the settlement price will be determined against this benchmark price. That's to say, if the settlement price is below the target price, the product will be settled in the investment currency (i.e. BTC in this case); otherwise, it will be settled in USDT. |
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Purchase Currency |
This refers to the asset needed to be spent in the dual investment and can be purchased using the underlying local currency or a Stablecoin.
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Term |
Term is the given period where the user can purchase the dual investment. |
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Settlement |
Settlement refers to a preset number of rules acknowledged upon execution of the investment by the user. These rules include a set time and date when the user’s product expires. On KuCoin, the time is generally 16:00(UTC+8) on the user’s settlement date. |
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Settlement Price |
This refers to the price of the underlying asset’s price at the expiry of the user’s product. For instance, the investment will be settled at the price of BTC at 15:30-16:00 (UTC+8) on the user’s set expiry date.
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Annualized Percentage Rate (APR) or Yield |
APR refers to the amount you stand to earn in a year after accounting for interest rates.
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A Step-by-Step Guide to Subscribe to KuCoin Dual Investment
Described below is a step-by-step procedure and requirements to participate in KuCoin’s Dual Investment Product （Website/ APP).
For Website:
Logging In to the KuCoin Website
Users going through the KuCoin webpage can click on “Earn” and then find the “KuCoin Earn” icon. On the other hand, users going through the KuCoin app should locate and select “Earn” on the dashboard.
KuCoin Dual Investment Page
Selecting Your Preferred Product
KuCoin offers a basket of dual investment products, all with varying target prices, terms, and yields. The platform will offer BTC and BTC-U products at the start, with more dual investment opportunities to come.
The BTC series refers to products that can be purchased using bitcoins, while BTC-U refers to series that can be purchased using USDT, with the benchmark pair being BTC-USDT.
That said, you can select any of the products in each series based on your preferences.
Selecting a Dual Investment Product
Beginner Test Run
To ensure that investors understand the product they are entering and the risks involved.
Beginners to Dual Investment will be required to take a quick novice test where they must answer all questions correctly before proceeding to purchase the product.
Subscribing to a Dual Investment Product
After passing the test run, investors can click on the subscription page of their preferred series after filling in the quantity input bar. They will see the potential earnings and product rules afterward.
Dual Investment Subscription Modal
Final Review & Transaction Confirmation
After selecting your subscription, users will have to view the investment page to confirm all the details inputted and confirm the transaction.
Final Dual Investment Subscription Overview
Settlement Information & Asset Flow
After the dual investment product you subscribed for is settled, you can get the settlement details in the Main Account. Kucoin Earn would transfer the profits of the dual investment product to your main Account as follows:
For APP:
Logging In to the KuCoin APP
Users going through the KuCoin app should locate and select “Earn” on the dashboard.
Selecting Your Preferred Product
KuCoin offers a basket of dual investment products with varying target prices, terms, and yields. The platform will offer BTC and BTC-U products at the start, with more dual investment opportunities.
The BTC series refers to products that can be purchased using Bitcoins, while BTC-U refers to series that can be purchased using USDT, with the benchmark pair being BTC-USDT.
You can select any of the products in each series based on your preferences.
Beginner Test Run
To ensure that investors understand the product they are entering and the risks involved.
Beginners to Dual Investment will be required to take a quick novice test where they must answer all questions correctly before proceeding to purchase the product.
Subscribing to a Dual Investment Product
After passing the test run, investors can click on the subscription page of their preferred series after filling in the quantity input bar. They will see the potential earnings and product rules afterward.
Final Review & Transaction Confirmation
After selecting your subscription, users will have to view the investment page to confirm all the details inputted and confirm the transaction.
Settlement Information & Asset Flow
After the dual investment product you subscribed for is settled, you can get the settlement details in the Main Account. Kucoin Earn would transfer the profits of the dual investment product to your main Account as follows:
Other Information
As mentioned earlier, dual investment are settled automatically at the maturation date. Additionally, settlement is judged based on the asset’s spot price of the asset at the time of settlement against the price linked to the user’s subscription.
Benefits of Dual Investment
Dual Investment offers several benefits when compared to regular investing, namely:
Passive Yields
With dual investment, you earn a steady passive income on your position regardless of the direction the market tilts towards.
Numerous Offerings
Dual investment allow you earn passive income from a wide settlement target of crypto assets, including your favorite crypto gems.
Zero Transaction Fees
With dual investment, transaction fees are not required when your target of settlement is reached.
Buy-Low , Sell-High
One of the benefits of dual investment is that they allow you to earn from buying crypto low and selling high, thereby aligning you with the primary rule of investing.
Further Note:
Though dual investment enables you to buy low and sell high, it’s not risk-free. In real scenarios, you might miss rising price trends when your assets are locked away for the set duration. By the time you can settle BTC, you could find yourself making more money at a more favorable price if you buy and hold BTC.
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