Binance, the largest cryptocurrency exchange in terms of trading volume is prepared to list a new leveraged token.
“Leverage Tokens are a tradable asset that gives users leveraged exposure to the underlying asset without the need of maintaining collaterals, margin maintenance, and liquidation risk,” Binance officials stated while launching tokens, adding:
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.
As reported in March, Binance surprised the crypto community by its decision to delist all leveraged tokens from its platform, including FTX Exchange’s leveraged tokens. The exchange confirmed the news of delisting in its official channel, “Due to lack of understanding of how leveraged tokens work by many of our users, Binance has decided to delist all existing FTX leveraged tokens and corresponding trading pairs.”
The New Leveraged Tokens are Better than Existing Products
Binance states that existing leverage tokens are extremely versatile but most consumers are not able to understand the nature of the tokens. The exchange claims that it has designed a new line of leveraged tokens that are more suitable compared to competing products. The new tokens will only require negligible fees, have less risk, and present upgraded security. Additionally, the tokens leverage span is 1.5 to 3 times.
“Binance guarantees that Binance Leveraged Tokens are always available for sale or purchase within 10% of the NAV (Net Asset of Value),” the company said.
Although the exchange has designed the tokens for quick trading, it claims that users can also hold the tokens. Moreover, Binance also intends to guide users about the nature of leveraged tokens, 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 it.
As the leading player in the crypto space, Binance has introduced several new products in the past few months. The exchange also made the largest acquisition of CoinMarketCap and many other exciting things.