Leveraged Tokens Overview
Smart, Automated Leverage Without Liquidation Risk
Last updated
Smart, Automated Leverage Without Liquidation Risk
Last updated
Toros leveraged tokens give investors amplified exposure to key blockchain assets—without the hassle of actively managing leverage. Our automated leverage vaults dynamically adjust positions, ensuring optimal exposure while reducing the risks associated with traditional leverage trading.
🚀 Automated Leverage Management
No manual adjustments required—Toros automatically rebalances leverage, optimizing risk and maximizing returns.
Built for efficiency, leveraging perpetuals or money markets like Aave to execute trades seamlessly.
🔹 Smarter Risk Management
Target Leverage Ratio (TLR): Maintains a safe leverage range, preventing excessive risk exposure.
Eliminates forced liquidations: Unlike perpetual contracts, Toros tokens automatically adjust leverage to protect your position.
Ideal for short-to-medium-term bullish or bearish bets.
Enhanced performance in strong trends—Toros increases leverage when the asset price moves favorably, boosting gains beyond standard perp leverage products.
Outperformance potential in trending markets by compounding exposure dynamically.
Traditional leverage products force liquidations when markets move against you—not Toros.
Example:
If you had held a -2X ETH Short perpetual from March to May 2021, you’d have been liquidated multiple times as ETH surged.
With Toros Ethereum Bear -2X, your position would have been protected, as our vaults automatically rebalance when leverage moves outside the target range.
How It Works:
When the asset price moves against your trade, the vault reduces leverage to prevent liquidation.
When the price moves in your favor, leverage dynamically increases to maximize upside exposure.
Like Leveraged ETFs, Toros leverage vaults rebalance to maintain optimal leverage ranges. In choppy, sideways markets, this can lead to volatility decay, where rebalancing and borrowing costs cause underperformance compared to standard leveraged positions.
Toros Minimizes Volatility Decay By:
✔ Strategic Rebalancing: Vaults only rebalance when leverage exceeds thresholds (e.g., 2.8x to 3.2x range for a 3x Bull Token), reducing unnecessary rebalancing.
✔ Avoiding Excessive Leverage: Higher leverage = higher volatility decay, which is why Toros caps leverage at 4x to optimize returns without unnecessary risk.
✔ Smart Borrowing & Fee Optimization: Costs are actively managed to reduce drag on performance.
Important Note: Higher higher leverage is also prone to higher volatility decay and could underperform ETH even in a positively trending market. This is why Toros leverage tokens don't offer leverage above 4x.
When withdrawing from a leveraged Toros vault, the token price displayed is based on Chainlink oracle pricing. However, on-chain market prices can sometimes diverge slightly, causing withdrawal slippage.
🔹 What to Expect:
Slippage is typically <1%, but we recommend accounting for 2-3% in volatile conditions.
Higher leverage amplifies slippage, so adjusting for it ensures a smoother exit.
