Binance Leveraged Tokens
Enjoy increased leverage without risk of liquidation
- 1. What are Binance Leveraged Tokens?
Binance Leveraged Tokens are a type of derivative product that give you leveraged exposure to the underlying asset. Like other tokens, leveraged tokens can be traded on the spot market. Each leveraged token represents a basket of perpetual contract positions. The price of a leveraged token moves along with price changes in the perpetual contract market, and the leverage level moves up and down accordingly.
Unlike margin trading, leveraged tokens allow you to gain exposure to leveraged positions without having to put up any collateral, maintain a maintenance margin level, or worry about the risk of liquidation. However, even though you don't have to worry about the risk of liquidation, there are still risks associated with leveraged token positions, such as the effects of price movements in the perpetual contracts market, premiums, and funding rates.
- 2. What is the leverage level of Binance Leveraged Tokens?Unlike conventional leveraged token, Binance Leveraged Tokens do not maintain a constant leverage. Instead, Binance Leveraged Tokens maintain a constant target leverage range between 1.25x and 4x. This would maximize profitability on upswings, and minimize losses to avoid liquidation.
- 3. What is the Underlying Asset?The ticker name indicates the underlying assets. For example, the underlying asset of BTCUP is the BTC perpetual contract in Binance Futures.
- 4. Do Binance Leveraged Tokens rebalance?
Binance Leveraged Tokens rebalance on an as-needed basis only. Unlike conventional leveraged tokens, Binance Leveraged Tokens are not forced to maintain a constant leverage. Hence, Binance Leveraged Tokens rebalance during extreme market movements only.
The rebalancing of Binance Leveraged Tokens positions is governed by Binance proprietary algorithms. Binance aims to maximize the correlation between the Binance Leveraged Tokens and the underlying margin-Leveraged position.
- 5. How do I get started in Binance Leveraged Tokens?You must accept and agree to the terms and conditions in Binance Leveraged Token Risk Disclosure before getting started in Binance Leveraged Tokens.
- 6. Where can I trade Binance Leveraged Tokens?You can trade in the Binance spot advanced trading interface. Currently, Binance is the only exchange that creates and lists Binance Leveraged Tokens. Should we list the tokens on other exchanges, an official announcement will be made in advance.
- 7. I couldn’t find the trading pair of leveraged tokens I want to trade in the Binance spot market. Will Binance add them?You can find a list of leveraged token trading pairs available to trade on Binance here. Should we add more trading pairs for trading, an official announcement will be made in advance.
- 8. What are the fees associated with Binance Leveraged Tokens?The fees associated with Binance Leveraged Tokens are as follows:
i. Trading fees: Trading fees are charged when buying or selling tokens in the spot market, and the fee schedule is identical to spot trading.ii. Subscription fees: Subscription fees are charged when users choose to subscribe tokens, which is currently set at 0.1% per subscription.iii. Redemption fees: Redemption fees are charged when users choose to redeem tokens, which is currently set at 0.1% per redemption.iv. Management fees: A daily management fee of 0.01% will be charged at 00:00 UTC and reflected directly in the net asset value of the leveraged tokens;v. Funding fees: Funding fees are paid (or paid to) the underlying fund based on the funding rate and reflected directly in the net asset value of the Leveraged tokens. Binance takes no fees for funding rate transfers; these are directly between traders.
- 9. How to subscribe or redeem?
You can subscribe or redeem a leveraged token at net asset value with a daily cap of 1,000 USDT per account. However, the amount may vary according to prevailing market conditions. Please check Redemption & Subscription Limits of each leveraged token for the updated subscription and redemption cap.
To subscribe or redeem, simply go to Binance Leveraged Tokens page and click “Subscribe” or “Redeem”. 0.1% of subscription or redemption fee will be charged and the funds (in USDT) will be deducted from or credited into your spot wallet.
- 10. Can I withdraw Binance Leveraged Tokens to my wallet?Currently, Binance Leveraged Tokens are not withdrawable. You can store the tokens safely on your Binance account.