TLX Documentation
  • Welcome to TLX
  • Basics
    • Leveraged Tokens
    • How Leveraged Tokens Work
      • Synthetix Perps Engine
      • Rebalancing
      • Keepers
      • ERC-20 compliance
      • Effects of rebalancing
    • Fees
    • Tokenomics
      • Understanding $TLX
      • Bonding for $TLX
    • Protocol-owned Liquidity
    • Guides
      • Minting
      • Redeeming
      • Sequential redeeming
  • Community
    • Governance
      • TIPs
    • Referral Program
  • More
    • Official Links
    • Deployed Contracts
    • Brand Assets
    • Risks & Security
    • FAQ
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FAQ

How are leveraged tokens different to perpetual futures?

The primary differentiator to perpetual futures is that leveraged tokens maintain their leverage factor within a target range. They achieve this by reactively rebalancing the amount of borrowed funds.

Why would I use leveraged tokens?

One use case of leverage tokens is to minimize the necessity for margin management, i.e. monitoring the margin-to-notional ratio and adjusting the leverage to prevent liquidation.

Can leveraged tokens liquidate in extreme cases?

Yes, in theory, leveraged tokens can face liquidation if keepers cannot rebalance a position quickly enough in response to sudden, large price movements. In the case of a liquidation, the value of a leveraged token would become zero, and a new leveraged token contract would be deployed.

Why was my ROI lower than I expected it to be?

The Return on Investment (ROI) might be lower than expected due to factors such as volatility decay, rebalancing costs, or Synthetix fees, such as a high funding rate.

How can I get a referral link?

Referral links are distributed to a limited number of contributors and community members. The easiest way to find a referral link is to ask in our Discord.

Can I trade leveraged tokens on secondaries instead of redeeming them?

Yes, leveraged tokens, being built on the ERC-20 token standard, are tradable on secondary marketplaces. However, this is dependent upon sufficient liquidity in the respective Decentralized Exchange (DEX).

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Last updated 1 year ago