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.
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