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KuCoin Spot Margin Trading Will Launch the Tiered Collateral Haircuts Mechanism

KuCoin Spot Margin Trading Will Launch the Tiered Collateral Haircuts Mechanism

09/12/2025, 11:18:01

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Dear KuCoin Users,
 
To further enhance risk control and trading experience, KuCoin Spot Margin Trading will launch the Tiered Collateral Haircuts mechanism on September 15, 2025.
 
Feature Update:
 
1. Tiered Collateral Haircuts
 
To better manage risks in Margin borrowing, KuCoin is introducing a Tiered Collateral Haircuts mechanism. Under this mechanism, when assets are used as collateral in Spot Margin trading, their value will be calculated based on tiered collateral haircuts according to the notional value of the asset. This mechanism only affects the user’s maximum borrowable amount and transfer-out amounts, and does not impact the calculation of the liquidation threshold or forced liquidation ratio.
 
Example:
Eg. Using Token ABC as Collateral
Previous
New
Token Quantity
1,000,000
1,000,000
Mark Price
1 ABC = 1 USDT
1 ABC = 1 USDT
Collateral Coefficient
1
1 (Not involved in the calculation of Maximum Borrowing)
Leverage
5x
5x
Collateral Value
 
1,000,000 * 1 USDT*1 = 1,000,000 USDT
The user holds 1,000,000 ABC tokens, which are subject to the Tiered Collateral Haircuts for Token ABC. The token's market value is converted to USDT based on the following tiered structure:
  • 0 < n ≤ 10,000: Collateral Haircuts = 100%
  • 10,000 < n ≤ 50,000: Collateral Haircuts = 90%
  • 50,000 < n ≤ 100,000: Collateral Haircuts = 80%
  • 100,000 < n ≤ 500,000: Collateral Haircuts = 60%
  • 500,000 < n ≤ 1,000,000: Collateral Haircuts = 0%
 
Collateral Value under the Tiered Collateral Haircuts (used for borrowing calculation):
(10,000 - 0) × 100% +
(50,000 - 10,000) × 90% +
(100,000 - 50,000) × 80% +
(500,000 - 100,000) × 60% +
(1,000,000 - 500,000) × 0%
= 10,000 + 36,000 + 40,000 + 240,000 + 0
= 326,000 USDT
Maximum Borrowing
Maximum Borrowable Amount = Collateral Value × (Leverage - 1)
= 1,000,000 × (5 - 1) = 4,000,000 USDT
 
Maximum Borrowable Amount = Collateral Value × (Leverage - 1)
= 326,000 × (5 - 1) = 1,304,000 USDT
 
LTV-Based Collateral Calculation
 
Collateral Value = Token Quantity * Mark Price * Collateral Coefficient
= 1,000,000 * 1 * 1 = 1,000,000 USDT
Collateral Value = Token Quantity * Mark Price * Collateral Coefficient
= 1,000,000 * 1 * 1 = 1,000,000 USDT
Transfer Out Assets Calculation
Transfer Out Amount = Total Assets - (Liabilities / Transfer-out Debt Ratio [60%])
  • Total Assets = Token Quantity × Mark Price
 
The current maximum transfer-out debt ratio is 60%, calculated as:
Transfer-out Debt Ratio (60%) = Liabilities / Collateral Value (based on the tiered collateral mechanism)
  • If a user holds ABC tokens and attempts to transfer assets out of the margin account, the system will verify the post-transfer liability ratio.
  • If the resulting debt ratio is less than or equal to 60%, the transfer will be allowed.
  • The system calculates the required collateral value based on the tiered collateral haircuts. The portion of the collateral needed to maintain a 60% debt ratio is considered a non-transfer portion.
  • Transfer Amount = Total Assets - Non-transfer Portion
  • Users can view both the maximum borrowing amount and maximum transfer amount on the Trading and Transfer pages.
 
App Version Requirement: Available for users on App version 4.0.0 and above. Please update your KuCoin app to access the new features.
 
2. Scope of Impact
  • The Tiered Collateral Haircuts will apply to all Cross and Isolated Margin trading pairs when borrowing occurs.
  • The new mechanism affects borrowing and asset transfer limits. Please refer to the example above.
  • Note: The new mechanism only affects maximum borrowable amount and maximum transfer amount. It does not impact the forced liquidation threshold or LTV liquidation calculations.

Risk Warning: Margin trading refers to the practice of borrowing funds with a relatively lower amount of capital to trade financial assets and obtain bigger profits. However, due to market risks, price fluctuations, and other factors, you are strongly recommended to be prudent about your investment actions, adopt an appropriate leverage level for Margin trading, and properly stop your losses in a timely manner. KuCoin assumes no responsibility for any losses arising from the trade.

We apologize for any inconvenience caused and appreciate your patience.

Thanks for your understanding and support!

The KuCoin Team

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