Original Title: "OKX Unified Account: The Third-Generation Trading System Leading for Three Years"

Source: OKX

On December 23, 2020, OKX announced the launch of its Unified Account system and began global testing, which has unknowingly changed users' habits.

After three years, OKX, a veteran cryptocurrency exchange, still maintains its industry-leading position with its unified trading account. The main reasons behind this are threefold: OKX insists on simplifying product operation experience, prioritizes user needs in product functionality, and most importantly, OKX continues to innovate in product iteration.

The first generation of cryptocurrency exchanges only had simple fiat and spot accounts, which could only meet users' basic needs for deposits, withdrawals, and spot trading, with limited functionality. The second generation of cryptocurrency exchanges tend to be more diverse and functional, with users having at least independent accounts for fiat, spot, margin, perpetual, futures, and options trading, greatly increasing the playability. However, since these accounts are not interoperable, users need to transfer funds back and forth between different accounts when conducting different types of trades, which not only makes the operation inefficient and cumbersome, creates financial barriers, and is not conducive to increasing margin thickness in extreme market conditions, but also relatively low in terms of fund utilization.

In order to further enhance user trading experience, OKX, with its profound technical accumulation, has begun to promote the arrival of the third-generation encrypted exchange accounts, which has significant and industry-inspiring significance.

Account Framework and Applicable Users

OKX Unified Trading Account is a trading system for multiple encrypted asset derivatives that allows users to buy and sell different currencies and settle them through a single trading account. It is divided into three types of accounts: fund account, trading account, and financial account. The fund account and financial account are mainly used for savings and wealth management, while the trading account is the focus of today's discussion on the unified trading account system. Under this account, users can conduct five types of trading, including spot trading, margin trading, futures contracts, perpetual contracts, and options contracts, as well as up to 14 trading strategies and spot contract copy trading, without the need for back-and-forth transfers. This greatly improves the convenience of trading at the operational level.

For different types of users, OKX's unified trading account provides a total of four account modes, including simple trading mode, single currency margin mode, cross-currency margin mode, and combination margin mode, which range from simple to advanced modes to accurately adapt to users' trading needs.

Account Advantages and Usage Scenarios

Under the non-margin mode, users can trade spot and options simultaneously in the same account, but leverage, delivery contracts, and perpetual contracts are not provided. OKX's non-margin mode is designed to protect novice users by avoiding their direct participation in complex derivative trading with high leverage, thus establishing a relatively safe and risk-controlled trading environment for them.

Single currency full-position mode is the most commonly used mode by users. Users can conduct spot, margin, options, perpetual contracts, and delivery contracts, as well as hedging and arbitrage of derivative products with the same settlement currency in the same account. Trading varieties with the same settlement currency will share margin, and trading profits and losses can offset each other. For example, two contracts with the same BTC denomination will share margin. However, positions and margins are independent for trading varieties with different settlement currencies, and trading profits and losses cannot be shared. Compared with the second-generation independent account mode, the single currency margin mode greatly simplifies the trading process, is very smooth, and isolates the risks of different currencies, improving the efficiency of account funds utilization.

Cross-currency full-position mode is the most representative mode in OKX unified trading account. It can trade the same types as single-currency margin mode, derivatives hedging and arbitrage with the same or different settlement currencies, and trade derivatives of a currency even if the trader does not hold that currency. However, the difference is that all trading varieties will share the margin, and the trading profit and loss can offset each other, which supports cross-currency full-position margin mode. For example, BTC contracts, ETH contracts, and other multiple transactions can share one margin, and the thickness of the margin will increase. Compared with the single-currency margin mechanism, this mode will convert all encrypted assets into U-based on the conversion rate as the margin for all positions, breaking the account restrictions between different currencies, reducing the risk of liquidation and further improving the efficiency of fund utilization. For example, in the previous independent mode, the liquidation risks of BTC contracts and ETH contracts in the bear market were 20,000 U and 2,000 U respectively, but in the cross-currency full-position mode, the liquidation points may be reduced to 1,000 U and 1,000 U, reducing the risk of liquidation.

Under the full position mode of portfolio margin, complex hedging combinations and option combinations, as well as hedges and sets between derivatives of the same underlying asset and spot, can be traded even if the corresponding asset is not held. For example, BTC can be traded with ETHUSDT perpetual contract. The margin is shared among all trading varieties, and the margin of derivatives under the same index can offset each other. Trading profits and losses can offset each other, but it does not support risk hedging. By constructing a certain scale of hedging combinations, the risk exposure can be reduced, and the maintenance margin requirement can be effectively reduced, further improving the utilization of funds. For example, when the user's position size is large, the hedging structure is good, and there are options hedging/spot hedging strategies, the margin requirement is lower.

Users can flexibly choose from four account modes of OKX unified trading account according to their own needs, reducing the probability of liquidation in extreme market conditions and improving capital utilization efficiency.

Product Highlights and Technological Innovations

As the most comprehensive and advanced account system in the industry, OKX's unified trading account has many highlights worth exploring.

Using the combination margin full position mode as an example, there are three core functions: profit and loss hedging, risk hedging, and trading type hedging. Especially when users engage in trading type hedging, this mode not only supports hedging between derivatives, but also exclusively supports hedging between spot and derivatives. In addition, when users engage in spot and derivative hedging, their account spot assets are not locked and can be flexibly used.

Single currency margin mode has two layers of risk verification: the first layer is called risk control cancellation verification, and the second layer is called pre-reduction verification. This ensures that users can trade normally, avoiding the situation where orders are cancelled due to insufficient margin, positions are partially reduced, or even fully liquidated.

Many exchanges still cannot achieve cross-currency full-position mode. This mode not only supports users to conduct spot, margin, options, perpetual contracts, and delivery contracts, as well as derivative hedging and arbitrage of the same or different settlement currencies in the same account, but also ensures fast margin calculation and settlement speed. This is because OKX uses exclusive backend verification and calculation rules to convert all encrypted assets into U-based margin for all positions based on the conversion rate.

Additionally, in cross-currency full-position mode, automatic borrowing of coins is also supported. Users can choose to enable or disable the "borrowing coins" function in the settings according to their needs. When the borrowing mode is enabled and the effective margin of the account's USD value is sufficient, users can still achieve "coinless trading" even if the balance of a certain currency is insufficient, greatly improving the convenience of trading.

For example, if a user only has SOL but wants to buy ORDI, and there is no SOL/ORDI trading pair on the exchange, only SOL/USDT and ORDI/USDT trading pairs, then the user needs to exchange SOL for USDT and then buy ORDI. However, with the margin borrowing function enabled, the user can directly use SOL to purchase ORDI. This is because the system will lend USDT to the user interest-free for the purpose of purchasing ORDI, which improves the user's trading convenience and reduces trading fees.

Third Generation Cryptocurrency Exchange Accounts

With the continuous development of the cryptocurrency market, the derivatives market of the cryptocurrency industry has also shown strong growth momentum, attracting more and more investors and institutions to participate. Especially against the backdrop of gradually clear regulatory environment and further market maturity, it is expected to continue to grow. However, the drawbacks of the current second-generation cryptocurrency accounts have intensified, and users have a more urgent demand for efficient and concise trading methods and experiences.

As the most important scene for the circulation of encrypted assets, the encrypted exchange has overcome the problem of redundant and complicated second-generation accounts by calculating different businesses such as spot trading, margin trading, options, perpetual contracts, and delivery contracts in a unified trading account through OKX unified trading account. By setting four account modes, including simple trading mode, single currency margin mode, cross-currency margin mode, and combination margin mode, it can accurately adapt to different user trading needs, greatly improving the smoothness and convenience of trading. Through margin sharing, it reduces the risk of liquidation and improves the utilization of funds, achieving the integration of the internal financial ecosystem and efficient and convenient trading of user assets, and redefining the third-generation trading account system.

As a leading global company in the encryption and Web3 technology industry, in recent years, OKX has not only provided high liquidity trading worldwide, but also committed to promoting the development of financial tools and providing users with more trading and investment options. By continuously leading financial technology solutions to promote higher-level products, providing investors with more innovative financial tools including Web3 wallets, CeFi structured products, and so on, OKX is driving the large-scale adoption of the encryption industry and setting an example for the industry, and the encryption industry will continue to welcome more exciting innovations.

It can be imagined that in the future, with the emergence of various new financial tools in the encryption industry, providing users with more extensive and convenient services, greatly reducing their participation threshold, may become the "new growth engine" and help the encryption industry reach its next peak.

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