Perpetuals-Based
Some Toros leveraged tokens achieve their target leverage by opening positions on perpetual futures protocols. This is one of two mechanisms Toros uses to build leveraged tokens.
Toros uses two perpetual futures venues depending on the chain:
GMX on Arbitrum: used for crypto leveraged tokens such as altcoin majors and bear positions
Hyperliquid on HyperEVM: used for assets that Hyperliquid lists as perps, including commodities (Gold, Silver) and equity indices (Nvidia, Nasdaq 100, S&P 500) alongside crypto
How It Works
Deposit collateral into the perpetual futures venue (GMX or Hyperliquid)
Open a leveraged perpetual futures position at the target leverage ratio
The protocol manages the position automatically, including rollovers and adjustments
This approach is more capital-efficient than the money market method because a single transaction establishes the full leveraged position.
Rebalancing
Like all Toros leveraged tokens, perpetuals-based tokens are rebalanced to maintain their target leverage. The protocol adjusts position sizes when the underlying asset price moves significantly.
This automated rebalancing reduces the risk of liquidation by scaling down exposure as prices move against the position.
Advantages
Capital-efficient: full leverage in a single position
Supports a wider range of assets, including altcoins with limited lending market liquidity and non-crypto exposures (commodities, equity indices) accessible via Hyperliquid
No need to manage borrow positions across lending protocols
Costs
Funding rate payments: perpetual futures positions pay or receive a funding rate depending on market conditions. In bullish markets, long positions typically pay funding to shorts.
Trading fees on position adjustments
Volatility decay from rebalancing in choppy markets
Which Tokens Use This Mechanism
Perpetuals-based tokens are commonly used for altcoin leveraged tokens, bear (short) tokens, and HyperEVM-deployed tokens for commodities and equity indices. 1x Tokens also use this mechanism. For the full token list, see Available Tokens.
Comparison
For an alternative mechanism using lending and borrowing, see Money Market-Based.
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