Customers will now get more access to price swings through the new leveraged tokens launched by Binance – BNBUP, BNBDOWN, XTZUP, and XTZDOWN.
Each leveraged token is representative of a group of uninterrupted futures positions. The level of leverage and the notional value of the underlying positions are tracked through the price of the tokens. Binance Leveraged Tokens can be traded (off-chain tokens) in the Binance spot market. Users are thereby provided optimized exposure to the underlying asset.
Binance has designed the Binance Leveraged Tokens (BLVT) after scrutinizing and carefully considering user requests for a new batch of tokens and evaluating the present leveraged products. The final result is leveraged tokens offering lower fees and risks when compared to derivatives and other traditional leveraged tokens, not from the Binance stable. The tokens also offer users a fully secured and safe experience.
In an exclusive question-answer statement, Binance, has explained the intricacies of the Leveraged Tokens:
The company has also tweeted in this regard.
Binance has also elaborated on each Leveraged Token.
BNBUP generates leveraged gains when there is an increase in BNB prices. Similarly, BNBDOWN generates leveraged gains when there is a decrease in BNB prices. XTUP generates leveraged gains when there is an increase in XTZ prices. Finally, XTZDOWN generates leveraged gains when there is a decrease in XTZ prices.
The company has assured the listing exchange that the BLVTs will always be available within 10% of the Net Asset of Value (NAV) for sale or purchase and has also claimed that the tokens span 1.5x to 3x leverage and do not force rebalancing if not necessary. In comparison, most other products of this genre often rebalance their leverage.
Binance has declared that more information will soon be released about the new Leveraged tokens.