📘Overview
ERC-20 tokens with built-in leverage. Profits auto-compound for exponential gains, with automated rebalancing to reduce liquidation risk.
Last updated
ERC-20 tokens with built-in leverage. Profits auto-compound for exponential gains, with automated rebalancing to reduce liquidation risk.
Last updated
TLDR
ERC-20 tokens with built-in leverage.
Profits auto-compound as price rises → exponential upside.
Automated rebalancing reduces liquidation risk (none in 4+ years, though technically possible).
Best for short–medium term trades. Monitor the market.
Toros leveraged tokens are built for exponential upside. Unlike perps, which grow linearly, leveraged tokens compound gains as the price of the underlying asset rises.
Perps → constant position size. Growth is linear.
Leveraged Tokens → constant leverage. Position size grows with profits. Growth is exponential.
Example:
BTC +20% → 2x perp ≈ +40%
BTC +20% → 2x LT ≈ +44%
BTC +50% → 3x perp = +150%
BTC +50% → 3x LT = +237%
Info: Leveraged tokens behave like “power perps” — returns can be squared, cubed, or more depending on leverage. This creates parabolic profits in trending markets.
With perps, falling prices increase leverage until the margin is gone and the position is liquidated.
Toros leveraged tokens avoid this through automated rebalancing:
As price drops, exposure is reduced to keep leverage in range.
This has led to no forced liquidation events in 4+ years.
Liquidation remains technically possible in extreme conditions
Warning: Rebalancing reduces the chance of forced liquidation, but it can also reduce returns in sideways or volatile markets. This effect is known as volatility decay.
Rebalancing keeps leverage constant and reduces liquidation risk. But in sideways or volatile markets, frequent rebalancing can gradually erode value. This is called volatility decay.
Leveraged tokens are designed for short to medium-term holds. They can perform well when markets trend, but users should actively monitor market conditions. They are not intended as long-term “set and forget” assets.
Amplified losses: just as gains multiply, losses multiply too.
Volatility decay: in sideways markets, repeated rebalancing erodes value.
Other decay sources: interest costs (money markets) or funding payments (perps).
Extreme events: liquidation is technically possible under extreme price moves.
Slippage: can widen during volatile conditions.
Toros leveraged tokens are powered by two main underlying mechanisms:
Money Market–based Leveraged Tokens
Perpetuals–based Leveraged Tokens
Both deliver constant leverage and ERC-20 simplicity, but with different costs and risks.
Toros leveraged tokens are built to simplify leverage in DeFi. They:
Compound gains for exponential upside
Manage risk through automated rebalancing
Are available in both money market and perpetual-based designs