Binance has launched new leveraged tokens, giving customers greater price swing accessibility

Binance has launched new leveraged tokens, giving customers access to higher price fluctuations.


Binance allocate its new line of leverage tokens incur smaller fees, tout less risk

At the end of March, Binance announced the cancellation of the listing of FTX leveraged tokens on the grounds that the products confused customers. Binance addressed this point in the Q&A on its new products, once again referring back to user confusion as the source of FTX token delisting. Moreover, it is also because customers have kept the FTX leveraged tokens for a long time, instead of trading them for a short time (as designed by Binance).

Binance said, citing customer demand in the market for such products:

“So, we are addressing the crucial problems with the existing leveraged tokens in the industry and launching Binance Leveraged Tokens.”

For now, Binance claims its new line of leverage tokens incur smaller fees, tout less risk, and give enhanced protection compared with competing products.

Binance said in a question and answer document provided to Cointelegraph, adding:

“Leverage Tokens are a tradable asset that gives users leveraged exposure to the underlying asset without the need for maintaining collaterals, margin maintenance, and liquidation risk. Each leverage token represents a basket of perpetual futures positions. The price of the tokens tracks the changes in the notional value of its underlying positions and its level of leverage.”

Binance noted it will always host liquidity for these products:

“Binance guarantees that Binance Leveraged Tokens are always available for sale or purchase within 10% of the NAV (Net Asset of Value).”

Besides, the leveraged tokens were made for quick trading; but the tokens function better than the competition if customers choose to hold longer-term as well. However, these products are not meant to function in place of futures or spot trading.

Binance plans to provide information for user education, adding:

We have addressed the crucial problems with other existing leveraged tokens in the industry and created an improved product that provides better protection for our users. We believe users will see the differences and improvements as soon as they trade them.”

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