Dual Investment yields look attractive, but how does settlement actually work? When do you get crypto, and when do you get USDT? This article explains the settlement rules thoroughly.
What Is Dual Investment?
A quick recap. Dual Investment is a structured financial product. You deposit one currency, and at maturity, depending on the relationship between the market price and the strike price, you're settled in one of two possible currencies while earning interest.
After registering on Binance, you can find Dual Investment under "Earn."
Two Product Types and Settlement Rules
Buy Low (Deposit USDT)
Rules:
- You deposit USDT
- Set a strike price (e.g., BTC 55,000 USDT)
- At maturity, check BTC's actual price:
Scenario A: BTC price >= strike price -> Returns USDT principal + USDT interest -> You didn't buy BTC, but earned interest
Scenario B: BTC price < strike price -> Your USDT is converted to BTC at the strike price + BTC interest -> Equivalent to buying BTC at the strike price
Sell High (Deposit BTC)
Rules:
- You deposit BTC
- Set a strike price (e.g., BTC 65,000 USDT)
- At maturity, check BTC's actual price:
Scenario A: BTC price <= strike price -> Returns BTC principal + BTC interest -> You didn't sell BTC, but earned interest
Scenario B: BTC price > strike price -> Your BTC is converted to USDT at the strike price + USDT interest -> Equivalent to selling BTC at the strike price
Settlement Timeline and Process
- Products typically mature at 08:00 UTC
- The system compares the settlement price against the strike price
- Calculates the settlement currency and amount per the rules
- Funds are automatically distributed to your spot account
- No manual action needed
Settlement and distribution are usually completed within minutes to hours after maturity.
How Is the Settlement Price Determined?
The settlement price isn't a single moment's price. Rather, it's a weighted average price over a period before maturity (e.g., the 30-minute TWAP before expiry), avoiding the impact of anomalous prices at any single moment.
Worked Examples
Example: Buy Low
- Deposit 10,000 USDT
- Strike price: BTC 60,000 USDT
- Term: 7 days
- APR: 30%
- Interest = 10,000 x 30% x 7/365 ≈ 57.5 USDT
At maturity:
- BTC price 62,000 (>= 60,000): Returns 10,000 + 57.5 = 10,057.5 USDT
- BTC price 58,000 (< 60,000): Returns (10,000 + 57.5) / 60,000 ≈ 0.1676 BTC
Example: Sell High
- Deposit 0.5 BTC
- Strike price: BTC 65,000 USDT
- Term: 3 days
- APR: 50%
- Interest = 0.5 x 50% x 3/365 ≈ 0.00205 BTC
At maturity:
- BTC price 63,000 (<= 65,000): Returns 0.5 + 0.00205 = 0.50205 BTC
- BTC price 67,000 (> 65,000): Returns (0.5 + 0.00205) x 65,000 ≈ 32,633 USDT
Did You Profit or Lose?
It depends on how you measure:
Buy Low — forced purchase scenario: If BTC drops below the strike price and you're forced to buy, and BTC keeps falling, the value of your BTC holdings continues to shrink. But your purchase price is better than the market price at that moment (thanks to the interest compensation), and if you intended to buy anyway, it's actually a good outcome.
Sell High — forced sale scenario: If BTC rises above the strike price and you're forced to sell, and it keeps surging, you miss out on further profits. But you sold at a price higher than when you entered, which is profitable in itself.
The core concept: Dual Investment guarantees you earn interest, but leaves uncertain which currency you'll ultimately receive.
If you don't have the app yet, download the Binance app first.
Summary
At maturity, Dual Investment either returns your original currency (you earn interest) or converts it to another currency at the strike price (you earn interest but face exchange rate changes). Understand both outcomes before participating — don't jump in based solely on the APR figure.