Leveraged Tokens

What Are Leveraged Tokens?

Leveraged tokens are ERC-20 tokens that provide holders with leverage.

Unlike traditional trading methods, these tokens automatically grant users a leveraged position. They offer convenience by eliminating the need to manage margins or understand liquidation risks.

Leveraged tokens come in both fixed and variable leverage options.

Why Are Leveraged Tokens Used?

Leveraged tokens are primarily used for the following reasons:

  • Managing Risks Leveraged tokens autonomously manage risk by reinvesting profits into the underlying asset and selling some when the price drops, mitigating potential liquidation risks. Managing Margin
  • By using leveraged tokens, you can obtain a leveraged position in the cryptocurrency market without dealing with margin requirements, collateral, liquidity, and other related features. Essentially, you can invest an amount equivalent to the current price, such as $19,269, to acquire a 3X Long Bitcoin Token.
  • ERC-20 Tokens Leveraged tokens are ERC-20 tokens, which means they can be withdrawn at any time. They are preferred over margin positions as they offer the flexibility to send them to any ETH wallet or transfer them to other platforms that support ERC-20 tokens.

How to Buy or Sell Leveraged Tokens?

There are multiple ways to buy or sell leveraged tokens, but the three most common methods include:

  1. Spot Markets: It is recommended to buy or sell leveraged tokens on spot markets. You need to visit the spot market of the leveraged token on any exchange to trade these tokens.
  2. Conversion: You can convert your existing cryptocurrency in your wallet into leveraged tokens.
  3. Creation or Redemption: This method involves creating or redeeming leveraged tokens, but it is less common and should only be pursued if you have a complete understanding of their functioning and have thoroughly reviewed the platform‘s documentation.

Remember that leveraged tokens are high-risk products, and it is essential to carefully consider their advantages and disadvantages before engaging in trading activities.

See our curated list of the best leverage trading platforms for more information.

Most Used
Tradable Coins
  • 375+
Payment Options
  • +3
  • 0.1 – 0.5%

More details

Binance, a leading global crypto exchange, offers a user-friendly interface and low fees for trading a diverse range of coins. Accessible to both institutional and individual investors, it supports advanced trading services, although U.S. options are somewhat limited.

  • Industry's lowest trading fees.

  • Advance trading options like leverage.

  • 350+ trading options, 150+ for theUS.

  • Lucrative on-site staking options.

  • Hiccups in account verification.

  • Less regulated than some competitors.

  • The corporate structure is not transparently.

Tradable Coins
  • 100+
Payment Options
  • 0.01 – 0.10 %

More details

Bybit is a leading futures trading platform globally, offering up to 100x leverage and attracting users who prefer to remain anonymous. With a presence in 180+ countries, it is renowned for its efficiency and unique features in cryptocurrency derivatives trading.

  • The platform offers up to 100x leverage trading.

  • Strong educational resources.

  • Diverse markets for traders, spot, perp, and futures.

  • Risk-free demo accounts to explore all key features.

  • TradingView integration.

  • The platform is difficult for beginners to navigate.

  • It does not offer a quality spot trading feature.

  • The NFT marketplace is limited in terms of options.

  • Security is of the gold industry standard.