In December 2017, Binance, one of the world’s largest cryptocurrency exchanges, launched its own token, the Binance Coin (BNB). Binance used part of the proceeds from the sale of BNB to buy back and destroy BNB tokens, with a goal of reducing the circulating supply and ultimately increasing the value of remaining tokens.
In addition to this “burn” strategy, Binance has also implemented a quarterly token buyback program to further increase the value of BNB.
Now, nearly two years later, Binance has launched its own Leveraged Tokens (BLVT) on the Binance Chain. BLVT are ERC-20 tokens that represent a leveraged exposure to underlying assets, similar to products offered by BitMEX and other exchanges.
Unlike traditional leveraged products, however, BLVT can be traded on any exchange that supports the Binance Chain.
The launch of BLVT is significant for a few reasons. First, it represents another use case for the Binance Chain beyond simple token trading.
Second, it brings leverage products to a much wider audience beyond those who trade on BitMEX and other exchanges. And third, it could potentially increase demand for BNB and other Binance Chain-based assets.
The question now is: at what price are BLVT subscribe and redeemed?
As with any leveraged product, there is always risk involved. The biggest risk with BLVT is that the price of the underlying asset falls sharply and/or quickly reverses direction.
This can lead to losses that exceed your initial investment (known as a margin call).
NOTE: Warning: Leveraged tokens offered by Binance are highly risky, and may result in significant losses. Leveraged tokens are subject to extreme price volatility due to their use of leverage, and should only be purchased with funds that you can afford to lose. Additionally, leveraged tokens may not be suitable for all investors, so please make sure that you understand the risk involved before investing.
For this reason, it is important to understand howBLVT work before investing any money. Fortunately, the team at Binance has put together a helpful video that explains everything you need to know:
[https://www.youtube.com/watch?v=I-sF2YIeRbg&feature=youtu.be]
In short, when you subscribe for BLVT, you are essentially borrowing money from Binance at a fixed interest rate. The interest rate depends on the leverage ratio you choose (2x or 3x) and the length of time you hold the tokens (7 days or 14 days). For example, if you subscribe for 3x leverage on BTC/USDT for 7 days, you will pay an interest rate of 0.
07% per day. This interest is paid in BNB and deducted from your account balance each day.
If at any point during the 7 days your account value falls below 110% of your initial investment (a so-called margin call), your position will be automatically liquidated and you will lose all of your money.
On the other hand, if the price of BTC goes up during this time period, your account value will increase and you will make money (assuming you close your position before it hits a margin call).
Assuming you don’t get margin called, at the end of 7 days you will have to repay the borrowed funds plus interest. You can do this by either selling BLVT on an exchange or redeeming them directly with Binance (at a slightly higher price).
So what’s the catch? Why would anyone want to take on this risk? The answer is simple: Leverage allows you to amplify your gains (or losses) compared to if you had simply bought the underlying asset outright. For example, if BTC goes up 10% over 7 days, your 3x leverage position will increase by 30%.
Conversely, if BTC falls 10%, your position will lose 30%.
Of course, leverage also amplifies your losses if things go against you. This is why it is so important to understand how these products work before investing any money!.
9 Related Question Answers Found
Binance Leveraged Tokens are a new type of cryptocurrency token that offers leveraged exposure to the underlying asset. For example, a 3x Leveraged Token on Binance would offer 3 times the price exposure to the underlying asset. Binance Leveraged Tokens are currently available for BTC, ETH, XRP, BCH, LTC, EOS andBNB.
Binance Leveraged Tokens are a new type of cryptocurrency that allows users to trade with leverage. Leverage is a financial term that refers to the use of debt to increase the potential return of an investment. For example, if you have a 1:5 leverage, it means that for every dollar you invest, you can trade with $5 worth of cryptocurrency.
A Binance Leveraged Token is a type of digital asset that is designed to provide investors with exposure to the price movements of an underlying asset, while also providing leverage. The token is issued by Binance and is backed by the Binance Exchange. The token is designed to track the performance of an underlying asset, such as a cryptocurrency, stock, or commodity.
Binance Leveraged Tokens Rebalance
Introduction
Binance, the world’s largest cryptocurrency exchange by trading volume, has launched a new type of token that allows users to get exposure to the price movements of major cryptocurrencies without having to actually hold the underlying asset. These so-called “leveraged tokens” track the price of their underlying asset and rebalance automatically when the price changes, in order to maintain a constant leverage ratio. The launch of these tokens follows a similar move by BitMEX, another major cryptocurrency derivatives exchange, which launched its own leveraged tokens earlier this year.
What is Leverage? In finance, leverage is the use of debt to acquire additional assets. Leverage can be thought of as a loan that is used to purchase an asset.
Leverage is a powerful tool that can help you maximize your profits when trading on Binance. By using leverage, you can trade with more money than you have in your account, which can give you the potential to make bigger profits. However, leverage can also magnify your losses, so it is important to use it carefully.
Binance Leveraged Tokens (BLVT) are a type of cryptocurrency token that allows users to trade with leverage, or margin. Leveraged trading allows users to trade with more money than they have in their account, by borrowing money from a broker or exchange. This can lead to higher profits, but also higher losses.
Yes, you can hold Binance Leveraged Tokens (BLVT) for as long as you want. There is no expiry date. The Binance Leveraged Token (BLVT) is an ERC-20 token that is fully backed by Binance Coin (BNB).
Binance is a cryptocurrency exchange that offers a platform for trading various cryptocurrencies. Futures contracts are financial contracts that obligate the buyer to purchase an asset, or the seller to sell an asset, at a predetermined price at a future date. Binance offers futures contracts on a variety of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and more.
