Contracts are collateralized in different currencies. A USDT-margined, or linear, contract posts USDT and settles gains and losses in USDT. A coin-margined, or inverse, contract posts the base coin itself, BTC on a BTC contract, and settles in that coin. The choice changes both your exposure and how liquidation approaches.
01The exposure difference
On a coin-margined long, your margin is the very asset you are long. A falling price hurts twice: the position loses and the collateral shrinks with it, so liquidation arrives sooner than the leverage alone suggests. On a short, margin gains value as the position profits, pushing liquidation away.
USDT-margined contracts keep the collateral stable in dollar terms, so the distance to liquidation moves only with the position's own P&L. That predictability is one reason linear contracts took most of the retail volume.
02Where each is used
Coin-margined contracts remain standard for hedging coin holdings, since a miner or holder already owns the collateral and a short there is a true hedge of the stack. They also dominate on some venues' older contract sets. In our feed, coin-margined markets appear as their own symbols per exchange, and their liquidation events are recorded on the same timeline as linear ones.