1x Tokens
1x Tokens provide synthetic spot exposure to assets that are difficult to access natively on Arbitrum. Instead of bridging to another chain, using a centralized exchange, or dealing with shallow spot liquidity, users can hold a simple ERC-20 token that tracks the underlying asset at 1x.
How They Work
1x Tokens use perpetual futures on GMX to create synthetic exposure. Toros maintains a 1x long position that closely tracks the underlying asset price.
The protocol handles all position management automatically:
Maintains leverage near 1x through algorithmic rebalancing
Manages funding payments and trading fees
Rolls positions continuously with no user intervention
Because these are synthetic positions (not true spot holdings), there are costs involved. Funding payments, trading fees, and minor tracking differences mean 1x Tokens may not perfectly match the spot price over long periods.
Available 1x Tokens
1x Tokens are available on Arbitrum, with select tokens also deployed on Ethereum.
For options-based products such as BTCCOVCALL1X, see Covered Call.
Key Considerations
Not true spot: 1x Tokens are synthetic products backed by perpetual futures positions, not actual holdings of the underlying asset.
Funding costs: Perpetual futures positions pay or receive funding rates. In bullish markets, long positions typically pay funding, which reduces returns over time.
Tracking differences: Minor deviations from the spot price can occur due to funding payments, trading fees, and rebalancing.
Not a passive substitute for spot: Over long holding periods, cumulative funding costs and tracking drift mean 1x tokens may underperform direct spot holdings. They are best suited for gaining exposure to assets not natively available on Arbitrum, not as a long-term replacement for holding the actual asset.
Last updated