The cryptocurrency trading landscape is constantly evolving, and maintaining optimal risk management while enhancing user experience remains a top priority for leading platforms. As part of this ongoing commitment, OKX has implemented strategic adjustments to the TUSD discount rate within its cross-collateral and portfolio margin modes. These changes aim to refine risk exposure, improve capital efficiency, and support long-term platform stability.
This article breaks down the recent update, explains the concept of coin discount rates, and explores how these modifications impact traders—especially those utilizing stablecoins like TUSD in leveraged positions. Whether you're a seasoned trader or new to margin trading, understanding these mechanics can help you make more informed decisions.
Understanding Coin Discount Rates
In advanced trading environments such as cross-collateral margin and portfolio margin modes, users can leverage multiple cryptocurrencies as collateral to open positions. However, not all assets carry equal weight due to differences in liquidity, volatility, and market depth.
To account for these disparities, exchanges apply a discount rate (also known as a haircut) when converting non-USD assets into their equivalent USD value for margin purposes. For example, if Bitcoin has a 5% discount rate, only 95% of its market value counts toward your usable collateral.
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This system protects both users and the platform from sudden price swings or illiquidity events that could trigger cascading liquidations during volatile market conditions.
Why Adjust TUSD’s Discount Rate?
Historically, TUSD (TrueUSD) was assigned a high or full valuation as collateral due to its status as a regulated, dollar-backed stablecoin. However, market dynamics and risk assessment frameworks are continuously reassessed. In response, OKX has updated the TUSD discount rate to 0% across all tiers, effective October 17, 2023.
While this may seem significant, it reflects a broader industry trend toward conservative risk modeling—especially in multi-asset margin systems where overreliance on any single stablecoin can introduce systemic vulnerabilities.
Detailed Breakdown of the TUSD Discount Rate Update
Previously, TUSD enjoyed favorable treatment with tiered discount rates ranging from 100% (no discount) up to certain thresholds, gradually decreasing at higher balances. The updated structure now applies a uniform 0% valuation for all tiers above $0.
Here's what changed:
- 0–$5,000,000: Discount rate adjusted from 1.0 (100%) to 0 (0%)
- $5M–$10M: From 0.975 (97.5%) to 0
- $10M–$20M: From 0.975 to 0
- $20M–$40M: From 0.95 to 0
- $40M–$100M: From 0.90 to 0
- Above $100M: Remains at 0, unchanged
This means that TUSD holdings will no longer contribute to a user’s effective collateral base in cross-collateral or portfolio margin accounts. Traders relying on TUSD to back leveraged positions must now rely on other supported assets such as BTC, ETH, USDT, or USDC, which maintain positive discount rates.
Implications for Traders
The immediate impact of this change is felt most by large-scale traders who used TUSD as part of their margin strategy. With TUSD now excluded from collateral calculations:
- Reduced borrowing capacity: Users with substantial TUSD balances may see a drop in available margin.
- Need for asset diversification: Traders should consider holding alternative collateral assets with active discount rates.
- Increased margin calls risk: Positions previously backed by TUSD may become undercollateralized unless adjusted.
However, this adjustment also brings long-term benefits:
- Improved platform resilience: Reducing reliance on a single stablecoin lowers systemic risk.
- Fairer risk distribution: Encourages use of more liquid and widely accepted assets.
- Alignment with global standards: Reflects best practices seen across top-tier financial institutions.
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Frequently Asked Questions (FAQ)
Why did OKX set the TUSD discount rate to 0%?
OKX continuously evaluates asset risk profiles based on liquidity, price stability, regulatory compliance, and market adoption. While TUSD remains a reputable stablecoin, setting its discount rate to 0% aligns with conservative risk management principles—especially in complex margin models where overexposure could amplify risks during extreme market conditions.
Does this mean TUSD is no longer supported on OKX?
No. TUSD is still fully supported for deposits, withdrawals, spot trading, and funding payments. The change only affects its eligibility as collateral in cross-collateral margin and portfolio margin modes.
Can I still use TUSD to open futures positions?
Yes, but indirectly. You can convert TUSD into another supported collateral asset (like USDT or BTC) or use it in isolated margin mode where applicable. However, in cross-margin scenarios, TUSD will not count toward your total margin balance.
Are other stablecoins affected?
As of this announcement, only TUSD has undergone a full discount rate reduction to 0%. Other major stablecoins like USDT, USDC, and DAI continue to have positive discount rates based on their respective risk profiles.
When did this change take effect?
The updated discount rate for TUSD took effect on October 17, 2023, between 4:00 PM and 5:00 PM (UTC+8). All margin calculations after that time reflect the new policy.
How can I protect my positions after this change?
Consider reallocating part of your TUSD holdings into approved collateral assets such as BTC, ETH, or USDT. Also, monitor your margin ratio closely and adjust leverage accordingly to avoid unexpected liquidations.
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By proactively adapting to shifting market realities, OKX reinforces its position as a secure, transparent, and user-focused trading environment. While changes like the TUSD discount rate adjustment may require short-term adaptation, they ultimately contribute to a safer and more sustainable trading ecosystem.
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