Perpetual Contract Risk Disclosure

Dear CoinQ User,

A Perpetual Contract is a type of crypto asset derivative with no expiry or settlement date. It allows users to take both long and short positions using leverage and is widely used in the cryptocurrency market. Given the high leverage and high risk associated with perpetual contracts, CoinQ hereby issues this risk notice. Please read and fully understand the following content before using perpetual contract products.

I. Risk of Rapid Loss Due to High Leverage

Perpetual contracts typically support high leverage trading. Leverage means you can control a larger position with only a portion of your funds (margin). Small fluctuations in market price can have a magnified effect on your equity. If the market moves against your position, you may lose your entire margin and could even incur a loss exceeding your initial margin (in the event of auto-deleveraging or clawback).

II. Forced Liquidation (Auto-Deleveraging) Risk

When your position's margin fails to meet the maintenance margin requirement, the system will trigger a forced liquidation mechanism. Under extreme market volatility, insufficient liquidity, or price gaps, your position may be liquidated at a price far worse than expected, or may result in a loss exceeding your initial margin.

III. Funding Rate Risk

Perpetual contracts use a periodic funding rate mechanism to anchor the contract price to the spot price. Depending on the balance of long and short positions in the market, the funding rate may be positive or negative. Holding positions for a long period may incur significant costs due to repeated funding rate payments, reducing your actual returns.

IV. Market Volatility and Liquidity Risk

The crypto asset market is highly volatile. During extreme market conditions, there may be sudden sharp price movements or a drying up of liquidity, leading to increased slippage, orders failing to execute at expected prices, or even temporary trading interruptions. You should closely monitor market movements and manage your position sizes prudently.

V. Liquidation Price and Mark Price Mechanism

CoinQ uses a Mark Price to calculate the trigger condition for liquidation, in order to avoid unnecessary liquidations caused by abnormal trade prices. However, the Mark Price itself is still influenced by overall market supply and demand. Users should understand the relevant mechanisms and manage their own position risks.

Important Notice:

• Perpetual contracts are high-risk financial instruments and are only suitable for users with sufficient trading experience and strong risk tolerance.
• Always choose your leverage level carefully. It is recommended that first-time users start with small positions and low leverage. Do not invest all of your assets into contract trading.
• Closely monitor your margin level and liquidation price. Add margin or close positions proactively to control risk.
• During periods of extreme market volatility, the platform may implement temporary risk control measures (including but not limited to adjusting leverage parameters, restricting position opening, increasing maintenance margin requirements, etc.). Any adjustments will be announced in advance.
• CoinQ assumes no responsibility for your profits or losses in contract trading. All trading decisions are made by you, and you bear all consequences.

If you still have questions about the perpetual contract mechanism or are unsure whether you should participate, we recommend that you do not use this product at this time, or consult a professional.