Binance Leveraged Tokens Agreement
Version: 18 August 2022
This Binance Leveraged Tokens Agreement (this “Agreement”) shall apply to all BLVT issued, redeemed and/or traded on the Platform.
The terms in this Agreement shall be further supplemented by the Binance Leveraged Tokens Trading Rules
, as updated from time to time (the “Trading Rules”
). In the event of any conflict or inconsistency between the terms in this Agreement and the Trading Rules, the Trading Rules shall prevail with respect to the services contemplated hereunder unless expressly stated otherwise.
Definitions and Interpretation
The following definitions are applicable to the terms of this Agreement:
“Basket” has the meaning given to it in clause 2.3 of this Agreement.
“Basket Value” means, in respect of each BLVT, the combined market value of all USD(S)-M Futures Contracts constituting the Basket.
“BLVT” or “Leveraged Token” means a series of Tokens issued by Binance that represent a leveraged position in the relevant Basket, comprising long or short positions in USD(S)-M Futures Contracts referencing the relevant Underlying.
“BLVT Account” has the meaning given to it in clause 2.3 of this Agreement.
“BLVT Account Value” means, with respect to a BLVT, the number of Tokens issued by the relevant BLVT Account multiplied by the Token Price of each Token, as determined by Binance.
“BLVT Fees” has the meaning given to it in clause 3.7.
“BLVT Limit” has the meaning given to it in clause 3.4.
“Leverage Ratio” means, with respect to a BLVT, the quotient obtained by dividing the Basket Value by the BLVT Account Value.
“Perpetual Futures Contracts” means contracts representing an obligation to buy or sell a Crypto Asset (the “Underlying”) at a specific price, at any time while the contract remains open, with no specific expiry date.
“Rebalancing” has the meaning given to it in clause 2.6 of this Agreement.
“Reverse Token Splits” has the meaning given to it in clause 2.7 of the Agreement.
“Target Leverage Ratio” means the particular Leverage Ratio that a Basket is looking to maintain , which is set by a Binance proprietary algorithm and will be within a range of between 1.25x and 4x (the “Target Leverage Range”).
“Token” means, in respect of each BLVT, each individual crypto asset (or fraction thereof) issued by Binance that has a value assigned to it and forms part of that BLVT.
“Token Price” has the meaning given to it in clause 2.4 of this Agreement.
“USD(S)-M Futures Contract” means a Perpetual Futures Contract that is quoted, settled and margined in USD stablecoins (BUSD and USDT) and is traded on the Platform.
The headings are inserted for convenience only and shall not affect the construction of this Agreement. Expressions in the singular form shall include the plural and vice versa, and all references to the masculine genders shall include the female and neuter genders and vice versa.
The words “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrases or words of like import, and “otherwise” shall not be construed as limited by words with which it is associated.
Features of BLVT
BLVTs are a type of derivative product that allows you to gain leveraged exposure to an underlying Crypto Asset, without the requirement to pledge collateral or meet certain margin requirements and without the risk of liquidation.
Binance is the sole issuer of BLVTs and also a market maker in BLVTs. You may request to subscribe for BLVT, redeem existing BLVT or trade BLVT on the secondary market through functionality available on the Platform.
Each BLVT has an associated segregated account on the Platform (each, a “BLVT Account”) that holds a dynamically adjusted basket of USD(S)-M Futures Contracts referencing the relevant Underlying referred to (the “Basket”). For example, the “BTCUP” Token will reference a Basket of long positions in BTCUSDT USD(S)-M Futures Contracts. The number and type of USD(S)-M Futures Contracts included within a Basket are automatically selected by a Binance proprietary algorithm by reference to the Target Leverage Ratio that the Basket is looking to maintain.
The price at which each Token issued with respect to a BLVT may be subscribed for or redeemed (the “Token Price”), is referred to on the Platform as the “NAV” and is intended to reflect the current market value of the Token. This takes into account the Basket Value of the associated BLVT Account that has issued the Token and the applicable Leverage Ratio. It is important to note that the Token Price will always differ from the price of the Underlying.
If, at any point, the Leverage Ratio of a BLVT falls outside the Target Leverage Range, Binance will rebalance the associated Basket by either buying additional USD(S)-M Futures for inclusion in the relevant Basket or selling a certain number of USD(S)-M Futures Contracts included within the relevant Basket, so as to bring the Leverage Ratio back within the Target Leverage Range (a “Rebalancing”). It may not always be possible for the Leverage Ratio to be within the Target Leverage Range at all times, such as in periods of extreme market volatility.
The Target Leverage Ratio is not fixed and varies from time to time. As such, Rebalancing will only occur when market conditions deem it necessary rather than at predefined intervals. This reduces the risk of any front-running of BLVT. Further information with respect to Rebalancing of BLVT can be found here: What Is Binance Leveraged Tokens Rebalancing.
In order to provide a better trading experience for users, Binance may, from time to time, make a BLVT subject to a reverse token split process to consolidate the existing number of Tokens into a smaller number of proportionally more valuable Tokens (a “Reverse Token Split”
). When extreme market fluctuations decrease the value of a Token, a Reverse Token Split may be initiated to boost the Token’s liquidity and price. Binance will announce the arrangements for Reverse Token Splits through the Platform prior to the effective time. Further information on Reverse Token Splits can be found here: What Is Reverse Token Split | Binance Support
Transacting in BLVT through the Platform
In order to subscribe for, redeem and/or trade in BLVT through the Platform, you must have:
(a) set up a valid Account;
(b) successfully passed a user knowledge assessment to confirm your understanding of the risks and features of Leveraged Tokens as complex crypto asset instruments; and
A list of all Tokens available for subscription/redemption through the Platform can be found on the following webpage: Binance Leveraged Tokens | BLVTs
. Each Token references a specific Underlying. You may choose to take positions in “UP” Tokens and/or “Down” Tokens. “UP” Tokens follow the price movements in the Underlying and allow for you to realize between 1.25x-4x leveraged gains when the price of the Underlying rises, whereas “DOWN” Tokens take an inverse position to the Underlying and allow for you to realize between 1.25x-4x leveraged gains when the price of the Underlying declines. Each BLVT Account associated with an “UP” Token will take a long position in USD(S)-M Futures Contracts referencing the Underlying whereas each BLVT Account associated with a “DOWN” Token will take a short position in USD(S)-M Futures Contracts referencing the Underlying. For example, a BTCUP Token will reference a Basket of long positions in BTCUSDT USD(S)-M Futures Contracts whereas an ETHDOWN Token will reference a Basket of short positions in ETHUSDT USD(S)-M Futures Contracts.
You may request to subscribe for or redeem Tokens issued with respect to a BLVT directly with Binance via the Platform at the current Token Price, plus any applicable BLVT Fees, by clicking “Subscribe” or “Redeem” against the relevant Token through the following webpage: Binance Leveraged Tokens | BLVTs
. Binance will periodically adjust the Basket related to a BLVT to account for any subscriptions or redemptions by buying additional USD(S)-M Futures Contracts for inclusion in the Basket or selling USD(S)-M Futures Contracts included within the Basket, as required. Further information on how to subscribe for and redeem BLVT can be found here: How to Subscribe or Redeem Binance Leveraged Tokens.
The current subscription and redemption fee for BLVT is 0.1% of the notional value of the Token (calculated and payable in USDT) and will be automatically deducted from (or credited to) your Account at the time of subscription/redemption. Binance may impose a daily limit on subscriptions and/or redemptions to a BLVT (“BLVT Limit”
). You may subscribe or redeem for each BLVT up to the applicable BLVT Limit at any time except during a Rebalancing. Binance may vary the BLVT Limit from time to time in its discretion depending on prevailing market conditions. Please refer to the Trading Rules
for information on the current BLVT Limits.
Binance reserves the right at any time to suspend the subscription and/or redemption of BLVT depending on prevailing market conditions. Any such suspension may continue for so long as Binance determines necessary in its sole discretion. In such a circumstance, Users may continue to trade BLVT in the secondary market. Without prejudice to the foregoing, Binance may choose to delist any Token available through the Platform and/or may discontinue providing any of the services referred to hereunder, in each case at any time in its sole and absolute discretion, without giving any reason or any notice to you thereof.
Users may trade BLVT on the secondary market, either with other users of the Platform or with Binance as counterparty, by clicking “Trade” against the relevant Token through the following webpage: Binance Leveraged Tokens | BLVT
. Binance supports the liquidity of BLVT and may step in as a buyer or seller when needed in order to maintain the secondary market price of BLVT within a certain range of the current Token Price. Information on how to trade BLVT in the spot market can be found here: How to Get Started With Binance Leveraged Tokens
Binance charges certain fees with respect to the subscription, redemption and trading of BLVT through the Platform (“BLVT Fees”
). Information with respect to the BLVT Fees can be found here: Leveraged Tokens Fees | Binance
. Binance reserves the right to update the BLVT Fees in its discretion from time to time by posting the updated fees to the Platform.
Binance reserves the right to update the information contained in the Trading Rules, the Platform and the various webpages referred to in this Agreement from time to time at its discretion. It is your responsibility to familiarise yourself with the content of such materials from time to time.
Risks of transacting in BLVT
Before transacting in BLVT through the Platform, you should take steps to understand the nature of this complex product and the risks involved as set out in the BLVT Risk Disclosure
. By transacting in BLVT on the Platform, you acknowledge and agree that you have sufficient investment knowledge, financial expertise, and experience and the capacity to take on the increased risks arising from Leveraged Tokens trading. You further agree to assume all the risks arising from conducting Leveraged Tokens trading on your own account. If you are uncomfortable with the level of risks described in BLVT Risk Disclosure
, you should not transact in BLVT.
By transacting in BLVT through the Platform, you authorise Binance to automatically: (i) deduct from your Binance Account any amounts owed from you to Binance, and/or (ii) credit to your Account any amount owed from Binance to you, in each case in connection with the subscription, redemption and/or trading of BLVT.
Binance reserves the right to alter, revise, modify, and/or amend this Agreement at any time in its discretion. Any such amendments will take effect immediately upon being published on the Platform. It is your responsibility to regularly check our website to confirm the latest version of this Agreement. Your continued access and use of the Platform for the purposes of trading in BLVT following any amendments to this Agreement shall indicate your acceptance of such amendments. If you do not agree to any such amendments, you should cease transacting in BLVT through the Platform.