Introduction:
Snowball is a non-guaranteed structured product that works with Gate.io’s exclusive daily observation mechanism and embedded autocall options. Once the product reaches certain preset conditions, it will automatically terminate and the profits will be realized. Snowball products have two barriers, an upper barrier and a lower barrier. When the upper barrier is touched, it is called “knocked out,” and when the lower barrier is touched, it is called “knocked in.” If neither barrier is touched, investors will receive corresponding returns when the product expires, and profits will continue to increase as long as there are no special circumstances. Snowball allows investors to achieve high returns in various market environments, but there is still a certain risk due to changes in the currency when the market fluctuates in one direction.
In the traditional financial market, the snowball products that ordinary investors are exposed to are actually various asset management products issued by asset management institutions, including trust products, private equity funds, and asset management plans, which have long faced many problems such as high threshold, difficult investment, and non-transparency.
However, the snowball products launched by Gate.io allow investors to participate in high-threshold financial products with as little as 1 U, earning cognitive returns, while ensuring a【public】,【transparent】product operation model, and opening up a new road to wealth for investors on the premise of compliance.
Advantages:
● Far superior to dual-currency financial management experience: in addition to being linked to prices, it solves the three major defects of dual-currency financial management through price protection and escape price.
● Free downside protection: As long as BTC does not fall below the protection price, Gate.io will cover the full loss for customers, and the interest will be paid.
● Surprise fixed interest: Interest rates that are much higher than the market average level provide a high-quality interest earning channel for the lonely market in the bear market.
Gate.io Snowball Product Rules
Keywords:
Lock-up period: usually lasts 1-4 weeks, according to the product issuance period, during which the invested funds cannot be redeemed in advance regardless of knock-in or knock-out.
BTC/USDT price: based on the observed reference price published by Gate.io exchange.
Knock-in/knock-out price: the knock-in/knock-out price set by Gate.io around xx:xx (UTC+8) will be determined after the subscription period ends, but if there are extreme market conditions, Gate.io reserves the right to adjust the price benchmark.
Daily price: observed around xx:xx (UTC+8) every day and based on the observed reference price published by Gate.io exchange.
Knock-out event: If the average BTC/USDT price on the observation day xx:xx (UTC+8) is higher than the knock-out price, it is considered to trigger the knock-out event.
Knock-in event: If the BTC/USDT price is lower than the knock-in price at any time before maturity, it is considered to trigger the knock-in event.
Profit Rules:
1.When the market fluctuates upward, and the knock-out event is triggered on any observation day in a certain month, the snowball ends early, stops accruing interest, and settles interest on the lock-up expiration date.
2.When the market fluctuates slightly between the upper and lower barriers, the snowball ends at maturity and settles interest.
3.When the market fluctuates significantly, drops below the knock-in price, and then rises sharply, and the knock-out event is triggered on any observation day, thesnowball ends early, stops accruing interest, and settles interest on the lock-up expiration date.
4.When the market fluctuates significantly, drops below the knock-in price, and the knock-out event is not triggered on any observation day, the snowball settles based on the holding spot position when it expires.
It can be seen that as long as the market is not in an extreme situation of unilateral sharp decline, snowballs can maintain higher returns than conventional financial products. Understanding knock-in and knock-out prices as two barrier lines, the snowball product is like rolling a snowball in the snow. As long as there are no big potholes (not touching the barrier lines) on the road, the snowball will get bigger and bigger, and the potholes are the upper and lower barriers set up. If neither barrier is touched, investors will receive corresponding returns when the product expires. If the lower barrier is touched, there may be a risk of losing the principal, and if the upper barrier is touched, the process of rolling the snowball will automatically terminate, and investors can wait for the expiration to receive the profits and start rolling the snowball on another track.
As the holding period increases, the profits gradually increase like rolling a snowball.
Risks of Snowball ProductsRisks of Snowball Products
Snowball investors mainly face the following potential risks and costs:
1. The risk of capital loss brought by the knock-in mechanism
The snowball product observes the price of the underlying asset every trading day. Once it falls below the knock-in price, the knock-in event is triggered. If the underlying fails to rise back to the initial price when the product expires, the snowball will settle based on the holding spot position.
2. The liquidity risk brought by the lack of active redemption clauses
Snowball products are financial products without active redemption clauses, so investors cannot redeem them midway. Therefore, investors should have a real understanding of their risk tolerance, make funding arrangements in advance, and carefully choose investment products.
3. Unable to obtain any returns, pay the cost of time and funds
Once the knock-in event is triggered, even if the underlying price rises above the initial price when the product expires, if the knock-out event is not triggered, no returns can be obtained.
4. The opportunity cost of missing the high returns brought by the underlying significant rise, increasing the opportunity cost
After the lock-up period, if the snowball product’s underlying asset rises significantly, even if it exceeds the knock-out price on the first day, investors cannot obtain the principal and returns in advance due to the product still being in the lock-up period, thus missing out on the high returns brought by directly investing in the underlying asset.
Target Audience
● Suitable for investors with strong professionalism and the ability to distinguish structured products.
● Investors who have considered risks and returns comprehensively.
● Investors who have expectations for non-guaranteed investment and financial management products, and have sufficient liquidity.
● Investors with certain market judgment ability.
Gate.io reserves the final right to interpret the product.
