1. General Rules
1.1. These rules have been formulated based on the principles of fairness, openness, and justice to regulate trading behavior associated with leveraged digital currency tokens and to protect the legitimate rights and interests of investors.
1.2. These rules serve as a benchmark for Binance's leveraged token trading service, which includes the trading of leveraged tokens and other related operations performed by investors.
2. Risk Control
2.1. Binance reserves the right to monitor the risk ratio of users' accounts in real-time.
2.2. Binance reserves the right to take appropriate measures based on changes in the risk ratio. Risk control measures that may be used include but are not limited to:
- Introducing a "maximum holdings" limit, which limits the maximum amount of leveraged token holdings a single user can have;
- Disabling leveraged token transfers, trading, and other operations for some high-risk users.
3. Limit Order Price Range Rules
The price range for limit orders for leveraged tokens is ± 90% of the latest net asset value (NAV) of any given leveraged token. Limit orders that exceed this range will not be executed. For example, if the current net asset value (NAV) of the leveraged token XUP is 10, then the XUP/USDT limit order price range will be 1-19.
4. Subscription Redemption Rules
4.1. Subscription redemption prices are executed based on the real-time net asset value (NAV) price.
4.2. At the end of the subscription process, all leveraged tokens that you had subscribed to will be deposited directly into your Spot Wallet. Subscription fees will be deducted directly from your USDT Spot Wallet.
Once the redemption process is complete, the leveraged tokens that you redeemed will be deposited into your Spot Wallet as USDT.
4.3. Users can subscribe or redeem tokens at any time.The limits for subscription and redemption are as follows:
Individual Daily Subscription
Individual Daily Redemption
5. Funding Fee Collection Rules
5.1. The funding rate for leveraged tokens = Basket position futures funding rate × Actual leverage. Binance does not collect funding interest rate transfer fees. The collection of funding fees is carried out between traders, and the fees are included in the net asset value (NAV).
5.2. The funding rate displayed on the page already takes leverage into account, so its impact on net asset value (NAV) is equal to the displayed funding rate. New net asset value (NAV) = NAV × (1 - Funding rate).
Example: If the funding rate for BTCDOWN is - 0.0304%, then net asset value (NAV) will increase 0.0304% when the funding rate is collected.
6. Rebalancing Rules
6.1. Binance leveraged token positions are only rebalanced when necessary, which is controlled by Binance's proprietary algorithm. The goal is to maximize the correlation between Binance leveraged tokens and the underlying margin positions without having to worry about liquidity.
6.2. The target leverage range for Binance leveraged tokens is maintained between 1.25x and 4x. The actual target leverage multiplier is not made public and changes constantly. This way, the outside world is unable to predict the target leverage multiplier maintained for Binance leveraged tokens or when rebalancing will occur, thereby reducing pre-trading and manipulation.
7. Calculation of Net Asset Value (NAV)
Net asset value (NAV) = ((1 / Actual leverage multiplier) × Basket position × Price of underlying asset) / Issued tokens.
8. Additional Rules
8.1. Binance provides information distribution, supervision, and risk control services for leveraged token trading. Binance does not provide any guarantee of returns or obligation of capital preservation for users who carry out leveraged token transactions on the Binance platform. Investors should be fully aware of the greater risks associated with leveraged token services. Additionally, they should self-assess possible losses and voluntarily participate based on confirming that the risks are controllable and bearable.
8.2. The terms "exceed" and "less than" as mentioned in these rules do not include numbers, whereas "not exceeding", "no less than", "above", and "up to" include numbers.
8.3. These rules are formulated by the Binance platform and will be effective immediately upon dissemination to all platform investors. The same applies to amendments.
8.4. Binance platform holds the right to the interpretation of these rules.