How to Trade Crude Oil Futures on Binance Wallet: Getting Started with CLUSDT Perpetual Contracts

If you want to try crude oil futures on Binance, you must first set your expectations: there is no such product on centralized exchanges. Crude oil-related perpetual contracts are traded in the Binance wallet through a decentralized exchange called Aster, and the contract code is CLUSDT. This article clearly explains the entrance, steps and several pitfalls.

What is CLUSDT

CLUSDT is a perpetual contract for crude oil prices, priced and settled in USDT. Unlike traditional crude oil futures, it has no opening and closing times, and orders can be placed 24/7. The bottom layer is not physical crude oil, but the price of crude oil is brought to the chain through smart contracts. The counterparty of the transaction is Aster, a third-party DEX. The Binance wallet is just the entrance, not the counterparty.

Fees and Incentives

Aster now charges 0% handling fee for CLUSDT Maker. In other words, if you place a limit order and wait for the transaction to be completed without taking the order, the cost is zero. The handling fee for Taker orders must be confirmed by yourself in Aster's rate table. Don't assume that both sides are free.

There are two additional incentives associated with the ASTER token:

• 1.2 times Aster airdrop points: Trading CLUSDT can accumulate points at 1.2 times, and the points can be exchanged for ASTER tokens later. The specific exchange ratio and rules are subject to Aster’s official announcement.
• Trading Competition: CLUSDT’s qualifying trading volume may count towards ASTER’s trading competition. Note the word "may", not all trading volumes are counted, it depends on the definition of qualifying trading volume in the competition rules.

These incentives are given by Aster, not Binance. Binance Wallet is only responsible for the connection and does not guarantee that the incentives will be fulfilled.

Mobile version operation steps

1. Log in to the Binance App and enter the Binance wallet. If you don’t have a wallet, create one first and back up the mnemonic phrase.
2. The wallet must have assets on BNB Chain. If not, just transfer it from your Binance spot account, or receive it from an external wallet, or you can buy it with Binance P2P. Be careful to choose BNB Chain for the network and don’t fill in the wrong address.
3. Search Aster in the DApps category of the wallet and enable this DApp.
4. Before opening Aster, the disclaimer and terms will pop up. Check the box to agree to continue.
5. You may need to sign several times when connecting to your wallet. This is to authorize Aster to operate your wallet. Please read it carefully before signing.
6. Search for CLUSDT in Aster and find the crude oil perpetual contract.
7. Transfer funds from Binance wallet to Aster’s perpetual contract account. This step is an on-chain transfer and requires Gas fees.
8. After the transfer is completed, you can place an order in Aster.

Web page operation steps

1. Log in to Binance Web, click "Trading" on the top navigation, and select "DEX".
2. Connect the wallet.
3. The first time you use it, you may be asked to turn on Secure Auto Sign. If it has already been opened, use the Binance App to authorize web access.
4. Confirm that there are BNB Chain assets in the wallet. If not, transfer them from the spot account or external wallet.
5. Find "Perpetual Contract" on the DEX interface and search for CLUSDT.
6. Click "Transfer" to transfer funds from the Binance wallet to the Aster perpetual contract account.
7. Confirm the transfer in the Binance App.
8. Once completed, you can trade.

Several costs and risks that must be verified

• Funding rate: The perpetual contract charges a funding fee at regular intervals, and the long and short parties pay each other. The rates are floating and can be very high in extreme market conditions. Before holding a position overnight, check the current rate and forecast rate.
• Slippage and depth: Aster is a DEX and may not be as liquid as centralized exchanges. Large orders are prone to slippage, so check the market depth before placing an order.
• Leverage risk: Perpetual contracts can be leveraged, and the principal will be lost if the position is liquidated. Don't spend money you can't afford to lose.
• Smart contract risks: Transactions are executed on the chain, and the contract may have loopholes or be attacked. You can check Aster's audit report yourself.
• Uncertainty of incentives: 0% Maker fee and 1.2x points are both phased and subject to adjustment at any time. The rules of the trading competition are also subject to change.

Differences from traditional crude oil futures

Traditional crude oil futures are traded on CME or ICE and have fixed trading sessions. The contract has an expiration date and needs to be rolled over. CLUSDT is a perpetual contract with no expiration date and anchors the spot price through the funding rate. In addition, CLUSDT is settled in USDT, so there is no need for a US dollar account and no need to worry about physical delivery.

Who it’s suitable for

If you are already familiar with the transfer process of Binance Wallet and BNB Chain and want to get in touch with crude oil prices without leaving the crypto ecosystem, CLUSDT can be a good place to look. But if you don’t even understand the funding rate of the perpetual contract, it is recommended to go to Binance Academy to complete the basic contract course first.

Reference: Binance Academy Original link: https://www.binance.com/en/academy/articles/how-to-trade-crude-oil-futures-on-binance

Transaction fees, VIP levels and rebate conditions may change, please refer to the exchange account page and CoinRebate's latest rate page. This article is for educational purposes only and does not constitute investment advice.