Dashboard Quick Navigation
Leveraged tokens -
What Are Leveraged Tokens?
Leveraged tokens are innovative ERC20 assets that can give you leveraged exposure to
cryptocurrency markets, without all the nuts and bolts of managing a leveraged position. You
can find the list of leveraged tokens here.
For example, take ETHBULL, a 3x long ETH token. For every 1% ETH goes up in a day,
ETHBULL goes up 3%; for every 1% ETH goes down, ETHBULL goes down 3%.
There are currently four leveraged tokens for every future on FTX: BULL (+3x), BEAR (-3x),
HEDGE (-1x), and HALF. Generally, if ETH goes up 1% during a day, then ETHBULL goes
up 3%, ETHBEAR goes down 3% ETHHEDGE goes down 1%, and ETHHALF goes up
0.50%. If ETH goes down 1% during a day, then ETHBULL goes down 3%, ETHBEAR goes
up 3%, ETHHEDGE goes up 1%, and ETHHALF goes down 0.50%.
How Do Leveraged Tokens Work?
Each leveraged token gets its price action by trading FTX perpetual futures. For instance,
say that you want to create $10,000 of ETHBULL. To do so you send in $10,000, and the
ETHBULL account on FTX buys $30,000 worth of ETH perpetual futures. Thus, ETHBULL is
now 3x long ETH.
You can also redeem leveraged tokens for their net asset value. To do that, you can send
your $10,000 of ETHBULL back to FTX, and redeem it. This will destroy the token; cause
the ETHBULL account to sell back the $30,000 worth of futures; and credit your account with
$10,000.
This creation and redemption mechanism is what ultimately enforces that the leveraged
tokens are worth what they're supposed to be.
Why Use Leveraged Tokens?
There are three reasons to use leveraged tokens;
Managing Risk
BULL/BEAR/HEDGE tokens will automatically reinvest profits into the underlying asset; so if
your leveraged token position makes money, the tokens will automatically put on 3x
leveraged positions with that.
Conversely, BULL/BEAR/HEDGE tokens will automatically reduce risk if they lose money. If
you put on a 3x long ETH position and over the course of a month ETH falls 33%, your
position will be liquidated and you will have nothing left. But if you instead buy ETHBULL,
the leveraged token will automatically sell off some of its ETH as markets go down--likely
avoiding liquidation so that it still has assets left even after a 33% down move.
HALF tokens are the opposite. Because they're only 1/2 leveraged, HALF tokens will sell off
their underlying when it goes up and buy it back when it goes down.
Managing Margin
You can buy leveraged tokens just like normal ERC20 tokens on a spot market. No need to
manage collateral, margin, liquidation prices, or anything like that; you just spend $10,000 on
ETHBULL and have a 3x leveraged long coin.
ERC20 Tokens
Leveraged tokens are ERC20 tokens. That means that--unlike margin positions--you can
withdraw them from your account! You go to your wallet and send leveraged tokens to any
ETH wallet. This means you can custody your own leveraged tokens; it also means you can
send them to other platforms that list the leveraged tokens, like Gopax or BitMax.
Leveraged Coins
1. Amun Ether 3x Daily Long (ETH3L):
ETH3L maintains notional exposure to 3x of Ether’s daily returns.
2. BTCUP:
BTCUP is a Long Bitcoin with Up to 3x Leverage. Generate 1.5x-3x leveraged gains when
the price of Bitcoin rises.
Binance Leveraged Tokens are tradable assets (off-chain tokens) in the Binance spot
market that give users leveraged exposure to the underlying asset. Each leveraged token
represents a basket of perpetual contract positions. The price of the tokens tracks the
change in notional amount of the perpetual contract positions in the basket and changes in
the multiples of leverage level.
3. 3X Long Bitcoin Token (BULL):
3X Long Bitcoin Token (BULL) is an ERC20 token which seeks a return that corresponds to
3 times the daily return of Bitcoin.
4. BTCDOWN:
BTCDOWN is a Short Bitcoin with Up to 3x Leverage. Generate 1.5x-3x leveraged gains
when the price of Bitcoin declines.
Binance Leveraged Tokens are tradable assets (off-chain tokens) in the Binance spot
market that give users leveraged exposure to the underlying asset. Each leveraged token
represents a basket of perpetual contract positions. The price of the tokens tracks the
change in notional amount of the perpetual contract positions in the basket and changes in
the multiples of leverage level.
5. Amun Bitcoin 3x Daily Long (BTC3L):
BTC3L maintains notional exposure to 3x of Bitcoin’s daily returns.
6. 3X Long Ethereum Token (ETHBULL):
3X Long Ethereum Token (ETHBULL) is an ERC20 token which seeks a return that
corresponds to 3 times the daily return of Ethereum.
7. Amun Bitcoin 3x Daily Short (BTC3S):
BTC3S maintains notional exposure to -3x of Bitcoin’s daily returns.
8. Amun Ether 3x Daily Short (ETH3S):
ETH3S maintains notional exposure to -3x of Ether’s daily returns.
9. 3X Long Dogecoin Token (DOGEBULL):
3X Long Dogecoin Token (DOGEBULL) is an ERC20 token which seeks a return that
corresponds to 3 times the daily return of Dogecoin.
10. 3x Long XRP Token (XRPBULL):
3X Long XRP Token (XRPBULL) is an ERC20 token which seeks a return that corresponds
to 3 times the daily return of XRP.
