Leveraged Tokens

Leveraged tokens are cryptocurrency derivatives that provide amplified exposure to an underlying asset's price movements without requiring the trader to manage margin, collateral, or liquidation risk directly. For example, a 3x Long Bitcoin token aims to deliver three times the daily return of Bitcoin. Leveraged tokens automatically rebalance to maintain their target leverage ratio. While convenient, they suffer from "volatility decay" over longer holding periods, making them suitable primarily for short-term trading.