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<img src="https://uploads.bydfi.in/events/cms/BYD.1745829103398.image.png" alt="BYD.1745829103398.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1745829103398.image.png" style="width: 100%;"/>Rebalancing may reduce the risk of liquidation to its maximum extent. BYDFi offers a dual rebalancing mechanism as follows: <h3>General Rebalancing</h3> Leveraged tokens are generally rebalanced every day at 00:00:00 hours (UTC+8) to ensure the leverage ratio remains at the stated number. When the time spans one or more repositioning cycles, leveraged token products cannot guarantee that the long-term cumulative rate of return and the underlying asset return rate remain in a fixed tracking multiple relationship. In a single trend market (rise or fall), the rate of returns of leveraged tokens will be greater than the stated tracking index. That is, the cumulative increase of leveraged tokens in the same direction will exceed three times the increase of the underlying assets, while the decrease of leveraged tokens in the opposite direction will be less than three times the decline of the underlying assets. In a volatile market, the performance of leveraged tokens will be worse than the stated leverage ratio, so leveraged tokens are more suitable for unilateral markets or trend markets. <h3>Threshold Rebalancing</h3> Threshold rebalancing will be carried out only when the rise and fall of the underlying asset trigger the set threshold in order to control the expansion of investment risks. For example, when the price of BTC goes down by 15%, we will make a threshold rebalancing on the losing party (BTC3L) of leveraged tokens to reduce user losses under extreme market conditions. The current trigger threshold is set to trigger when the underlying asset goes down by 15% in a rebalancing cycle (this threshold is adjusted according to the situation), which can reduce the wear and tear caused by frequent rebalancing. Risk warning: Leveraged token products are leveraged and fluctuate widely. Please be familiar with the trading rules and participate with caution.

Leveraged Tokens Rebalancing

Leveraged Tokens Rebalancing Explained｜BYDFi Help Center

Leveraged tokens (LVTs) on BYDFi allow traders to gain leveraged exposure to cryptocurrencies without managing margin or liquidation risks. You can easily buy or sell leveraged tokens directly through the BYDFi App within the Spot Trading section. This guide explains how to trade leveraged tokens step by step. <h2>Step-by-Step Guide to Trading Leveraged Tokens on BYDFi App</h2><h3>1. Open the Spot Trading Page</h3><ul><li>Log in to your BYDFi App.</li><li>On the homepage navigation bar, tap Spot to enter the spot trading section.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1758620893211.image.png" alt="BYD.1758620893211.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1758620893211.image.png" style="width: 50%;"/><h3>2. Search for Leveraged Tokens</h3><ul><li>Use the search bar at the top-left of the trading page.</li><li>Select LVTs (Leveraged Tokens) to view available trading pairs.</li><li>You can also swipe left or right to explore other Spot products alongside leveraged tokens.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1758620928580.image.png" alt="BYD.1758620928580.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1758620928580.image.png" style="width: 50%;"/><h3>3. Choose Your Order Type</h3>On the order panel, select your preferred order type: <ul><li>Limit Order – Place a trade at your chosen price. </li><li>Market Order – Buy or sell instantly at the current market price.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1758620953655.image.png" alt="BYD.1758620953655.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1758620953655.image.png" style="width: 50%;"/><h3>4. Enter Order Details</h3><ul><li>Input the number of leveraged tokens or the USDT amount you wish to trade.</li><li>Tap Buy to confirm your leveraged token purchase.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1758621051894.image.png" alt="BYD.1758621051894.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1758621051894.image.png" style="width: 50%;"/> <h2>⚠️ Important Notes</h2><ul><li>Leveraged tokens are designed for short-term trading, not long-term holding, due to daily rebalancing.</li><li>Always check the fees, performance, and risks before trading leveraged tokens.</li><li>Make sure your Spot Wallet has sufficient USDT balance.</li></ul>

How to Trade Leveraged Tokens on BYDFi? (APP)

How to Trade Leveraged Tokens on BYDFi (APP)｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cms/BYD.1745828755573.image.png" alt="BYD.1745828755573.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1745828755573.image.png" style="width: 100%;"/>The previous article stated that the price of leveraged tokens will be influenced by two factors: secondary market price and net asset value (NAV). We will introduce the calculation of NAV in this article. NAV= Previous Rebalanced NAV*[1±3*(Latest Deal Price of Underlying Asset-Previous Rebalanced Price of Underlying Asset)/Previous Rebalanced Price of Underlying Asset*100%] e.g. Previous Rebalanced NAV=1, Underlying Asset's (BTC) price rise from 10000 to 11000: NAV of BTC3L=1*[1+3*（11000-10000）/10000*100%]=1+3*10%*1=1.3NAV of BTC3S=1*[1-3*（11000-10000）/10000*100%]=1-3*10%*1=0.7 When the price of BTC falls from 11000 to 10500, and price rebalancing doesn't occur during the price change. NAV of BTC3L=1*[1+3*（10500-10000）/10000*100%]=1+3*5%*1=1.15NAV of BTC3S=1*[1-3*（10500-10000）/10000*100%]=1-3*5%*1=0.85 During an extremely volatile market, the 24-hourly calculation may have both the long and short appear as the market is dipping. Merge MechanismDue to the influence of market sentiment, the price on the secondary market might deviate from NAV and cause a premium. We recommend users avoid setting the order price too far away from NAV. In order to raise price sensitivity and users' experiences, BYDFI will merge the price when NAV is below the threshold (0.1U in the beginning). This means NAV will be 10 times larger than the price before merging, the volume of positions will be 1/10th as large at the same time, and total asset value will not be affected. Total Assets Value = NAV * Position VolumeAfter merging: Total Assets Value = (NAV*10)*(Position Volume/10) Risk warning: Leveraged token products are leveraged and fluctuate widely. Please be familiar with the trading rules and participate with caution.

Price Mechanism of Leveraged Tokens

Price Mechanism of Leveraged Tokens｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cms/BYD.1745393910622.image.png" alt="BYD.1745393910622.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1745393910622.image.png" style="width: 100%;"/><h3>Different Trading Methods</h3>In <a href="https://www.bydfi.com/en/spot/btc3l_usdt" target="_blank">Leveraged Tokens</a>, leveraged tokens are buy/sell, while in derivatives, they are buy long/sell short. <h3>Different Fees</h3>Leveraged Tokens have a transaction fee of 0.2%, while Perpetual Contracts have a taker fee of 0.06% and a maker fee of 0.02%.However, Leveraged Tokens have a management fee of 0.03% (not deducted but reflected in net asset value), while Perpetual Contracts have funding fees that are generated every 8 hours.Related Article: <a href="https://www.bydfi.com/en/support/FAQs/articles/on7fv1tccy2h" target="_blank">Transaction Fee Calculation</a> <h3>Different Investment Scenarios</h3>Due to the commodity characteristics of Leveraged Tokens, they are generally considered more suitable for one-way markets and short-term operations, while derivatives are considered more suitable for back-and-forth operations in oscillating markets. <h3>Different Leverage Methods</h3>Currently, the Leveraged Token products provided by BYDFi has a 3x leverage, which is fixed daily through the <a href="https://www.bydfi.com/server/en/support/PRODUCT_DESCRIPTION/articles/w0jvdcouytej" target="_blank">rebalancing mechanism</a>. The leverage range offered by derivatives trading varies depending on the product. For details, please refer to: <a href="https://www.bydfi.com/en/swap-info?page=4&type=usdt" target="_blank">USDT-M Perpetual Contracts Trading Rules</a> <h3>Different Amount Requirements</h3>The minimum amount for purchasing Leveraged Tokens is 10 USDT. For derivatives, the minimum required amount varies depending on the product category. For Perpetual Contracts, it depends on the product, which can be viewed by clicking on the upper right corner of the product <a href="https://www.bydfi.com/en/spot/btc3l_usdt" target="_blank">trading page</a>. <h3>Risk Bearing</h3>The risk of liquidation for Leveraged Tokens tends to be zero, while derivatives have the risk of liquidation.To minimize trading risks, it is important to understand the different characteristics of the products and choose the ones that suit your needs before trading.

Differences Between Leveraged Tokens and Derivatives

Differences Between Leveraged Tokens and Derivatives｜BYDFi Help Center

Trading leveraged tokens on BYDFi is simple and efficient. Leveraged tokens allow you to gain amplified exposure to cryptocurrencies without directly managing margin, leverage, or collateral. This makes them a convenient tool for traders who want to maximize potential returns while minimizing the risk of liquidation.Whether you are new to leveraged tokens or an experienced trader, this step-by-step guide will help you start trading on the BYDFi platform. <h2>How to Trade Leveraged Token via BYDFi Website</h2><h3>1. Access the Leveraged Token Platform</h3><ul><li>Log in to your BYDFi account on your PC.</li><li>Navigate to the top menu and click “Trade” → “<a href="https://www.bydfi.com/en/spot/btc3l_usdt" target="_blank">Leveraged Token</a>”.</li><li>You will be redirected to the Leveraged Token trading interface.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1755684914540.image.png" alt="BYD.1755684914540.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755684914540.image.png" style="width: 100%;"/><h3>2. Review Key Information</h3>Before trading, review important details displayed at the top of the page:Net Asset Value (NAV): Displays the real-time value of each leveraged token.<img src="https://uploads.bydfi.in/events/cms/BYD.1755684790880.image.png" alt="BYD.1755684790880.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755684790880.image.png" style="width: 100%;"/>Management Fee Rate: Indicates the holding cost of the leveraged token.<img src="https://uploads.bydfi.in/events/cms/BYD.1755684831513.image.png" alt="BYD.1755684831513.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755684831513.image.png" style="width: 100%;"/>In the middle of the interface, you will see the price chart, which you can customize with different timeframes and technical indicators to analyze market trends.<img src="https://uploads.bydfi.in/events/cms/BYD.1755684990133.image.png" alt="BYD.1755684990133.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755684990133.image.png" style="width: 100%;"/><h3>3. Choose Buy or Sell</h3>Decide whether you want to Buy or Sell the selected cryptocurrency.<img src="https://uploads.bydfi.in/events/cms/BYD.1755685231295.image.png" alt="BYD.1755685231295.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755685231295.image.png" style="width: 100%;"/><h3>4. Select the Order Type</h3>On the right-hand side of the trading page, you’ll find the order panel. You can choose between two order types:<ul><li>Limit Order: Enter the price at which you want to buy or sell leveraged tokens.</li><li>Market Order: Buy or sell instantly at the current market price.</li></ul><img src="https://uploads.bydfi.in/events/cms/BYD.1755685285842.image.png" alt="BYD.1755685285842.image.png" data-href="https://uploads.bydfi.in/events/cms/BYD.1755685285842.image.png" style="width: 100%;"/><h3>5. Monitor and Manage Your Holdings</h3>Once your order is executed:<ul><li>Check your purchased leveraged tokens in your Spot Wallet.</li><li>Track performance under Orders or Trade History.</li><li>Manage your position by setting stop orders or selling tokens as needed.</li></ul> <h2>Important Notes for Leveraged Token Trading</h2><ul><li>Automatic Rebalancing: Leveraged tokens are automatically adjusted to maintain their target leverage ratio, reducing liquidation risk.</li><li>Short-Term Focus: Leveraged tokens are best suited for short-term trading strategies, as daily rebalancing may affect long-term performance.</li><li>Management Fees: Always review the management fee structure, since costs can accumulate if held for extended periods.</li></ul>

How to Trade Leveraged Tokens on BYDFi? (PC)

How to Trade Leveraged Tokens on BYDFi (PC)｜BYDFi Help Center

Compound Interest without a Margin Requirement<img src="https://support.bydfi.com/hc/article_attachments/10976777822991" alt="" data-href="" style=""/>Leveraged tokens have the characteristic of compounding. If the user purchases a leveraged token that generates a floating profit (the floating profit before rebalancing), the earnings will be added to the principal in the next rebalance, which means adding 3 times the floating profit position, resulting in a compounding pattern. Therefore, the user’s position in the elevated token product will increase, compounding the gains.With the Advantage of Leverage While Minimizing the Risk of Liquidation<img src="https://support.bydfi.com/hc/article_attachments/10976777823631" alt="" data-href="" style=""/>Leveraged tokens come with their own risk control mechanism. For instance, if BTC falls by 33%, a BTC contract of perpetual purchased with 3X leverage will be liquidated. Undoubtedly, this long position will be forced to close, and nothing will be left. However, if the user buys the leveraged token product and does three times longer with the underlying asset of BTC (BTC3L), the leveraged BTC3L will be rebalanced, and the position will be adjusted according to the market decline to avoid liquidation. Even if the BTC price drops by 33%, the user's position still has remaining assets, and there is no liquidation. <a href="https://www.bydfi.com/server/en/support/PRODUCT_DESCRIPTION/articles/w0jvdcouytej" target="_blank">What is Leveraged Token Rebalancing?</a>Fixed Leverage<img src="https://uploads.bydfi.in/events/cmsBYD.1743140365372.image.png" alt="BYD.1743140365372.image.png" data-href="https://uploads.bydfi.in/events/cmsBYD.1743140365372.image.png" style=""/>Compared to the leverage of futures products in the traditional market, which may be affected by price changes, the leverage of the leveraged tokens can be fixed as much as possible through the price rebalancing mechanism. Such rebalancing allows users who are busy and do not have time to keep an eye on the market to stay within their original investment plan. When the market is unilateral, the advantages of leveraged tokens are most obvious; when the market is oscillating in both directions, it becomes less favorable. Risk warning: Leveraged token products are leveraged and fluctuate widely. Please be familiar with the trading rules and participate with caution.

Advantages of Leveraged Tokens

Advantages of Leveraged Tokens｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cms1736162481120hqtKY7ZpvHdA.png" alt="image.png" data-href="" style="width: 100%;"/>What are Leveraged Tokens?Leveraged tokens are derivative products without margin and with leverage, usually more suitable for short-term investment in one-sided markets. What is Net Value (NAV) ?Net value refers to the value of leveraged tokens.Taking BTC3L as an example, if the BTCUSDT price increases by 1%, the net value of BTC3L will increase by 3%.NAV= Previous Rebalanced NAV*[1±3*(Latest Deal Price of Underlying Asset-Previous Rebalanced Price of Underlying Asset)/Previous Rebalanced Price of Underlying Asset*100%] Naming RulesTaking ETH as an example,ETH3L refers to the token that holds ETHUSDT perpetual contract long position with 3x leverage. ETH3S refers to the token that holds ETHUSDT perpetual contract short position with 3x leverage. Which Account can Trade Leveraged Tokens on BYDFi?Leveraged token trading will be directly conducted through your BYDFi spot account. Fees for Leveraged TokensTrading fee 0.2% ; Management fee 0.03%For more details, please refer to: <a href="https://www.bydfi.com/en/support/FAQs/articles/txaswymdqx2f" target="_blank">Fees for Leveraged Tokens</a> Will My Tokens be Forcibly Liquidated?Due to the fact that the price will not drop to zero, it largely avoids the risk of liquidation in leveraged trading. What is Leveraged Tokens Rebalancing?The rebalancing mechanism is the process of flexibly adjusting positions to achieve the target leverage. When the actual leverage ratio fails to reach the target leverage range, the rebalancing mechanism will be triggered automatically.You can refer to: <a href="https://www.bydfi.com/en/support/PRODUCT_DESCRIPTION/articles/w0jvdcouytej" target="_blank">Leveraged Tokens Rebalancing</a> Does Leveraged Tokens Support Withdrawals?Currently, BYDFi does not support leveraged tokens withdrawals.

Leveraged Tokens FAQ

Leveraged Tokens FAQ｜BYDFi Help Center

Leveraged tokens are a type of financial derivative similar to leveraged trading and are popular in the traditional market. Like conventional leveraged trading products, leveraged tokens form their own price system based on the price of the underlying asset multiplied by a certain ratio (e.g., three times). There is no time limit for leveraged tokens, and the price will not go to zero, which greatly avoids the risk of liquidation in leveraged trading. Leveraged Tokens Characteristics:<img src="https://uploads.bydfi.in/events/cmsBYD.1743133312678.image.png" alt="BYD.1743133312678.image.png" data-href="https://uploads.bydfi.in/events/cmsBYD.1743133312678.image.png" style="width: 100%;"/>Users can buy and sell leveraged tokens in the secondary market at a limit or market price using spot aggregation, and the purpose of leveraged trading can be achieved without margin. Naming Rules:<img src="https://uploads.bydfi.in/events/cms1736162474445Q1BvlspMHZOn.png" alt="image.png" data-href="" style="width: 100%;"/>The name of a leveraged token consists of the name of its underlying asset, the leverage ratio, and the direction of long/short.For Example:BTC3L is a three-time leveraged long bullish BTC token.BTC3S is a three-time leveraged short bearish BTC token.When BTC rises 1%, BTC3L rises 3%, and BTC3S falls 3%.When BTC falls 1%, BTC3L falls 3%, and BTC3S rises 3%.Leveraged Tokens Price:<img src="https://uploads.bydfi.in/events/cms1736162474600r1b06S7avXtx.png" alt="image.png" data-href="" style="width: 100%;"/>The price of the leverage token is composed of two parts: One is the price in the secondary market, which is determined by the strength of the buying (long) or selling (short) orders. The other part is the net asset value (NAV), which is calculated by tracking the upside and downside of the underlying asset and reflects the true value of the leveraged tokens at a certain multiple at that moment.It is recommended that users avoid unnecessary losses when buying/selling leveraged tokens at prices that do not deviate too much from the NAV.For the calculation of NAV, please refer to this article: <a href="https://www.bydfi.com/en/support/PRODUCT_DESCRIPTION/articles/kvamefmzlo8k" target="_blank">Price Mechanism of Leveraged Tokens</a>Risk warning: Leveraged token products are leveraged and fluctuate widely. Please be familiar with the trading rules and participate with caution.

What Are Leveraged Tokens?

What Are Leveraged Tokens?｜BYDFi Help Center