Q: What are Crypto leveraged ETF products?
R: Leveraged ETF products are a financial derivatives that are very popular within the traditional financial markets. It is a traded product that achieves a certain multiple (e.g. 3x or -1x, -2x) of the daily return of the target asset given the underlying asset (e.g. BTC). If the price of BTC rises 1%, the net value of the corresponding 2x, 3x leveraged ETF products will rise 2%, 3%; while the net value of the corresponding -1x, -2x products will fall -1%, -2%. (Risk warning: If the direction is wrong, there will be a risk that the price will approach zero in extreme market conditions)


Q: How do leveraged ETF products achieve corresponding returns?
R: Leveraged ETF products are essentially funds managed by a professional financial engineering team. Behind each product, there is a certain number of futures contract positioning. Fund managers dynamically adjust the futures positioning so that the entire fund share can be maintained for fixed leverage. The management and maintenance of the portfolio are all the responsibility of the professional team, allowing investors to easily build their own constant leverage portfolio without worrying about the specific mechanism.


Q: What can be used to buy leveraged ETF products?
R: Leveraged ETFs can be purchased with BRL.


Q: What are the naming rules for leveraged ETF products?
R: ETF tokens are denoted as (token name + leverage multiplier + long/short direction). For example, when BTC price goes up by 1%, BTC3L will go up by 3%, while BTC3S will go down -3%. In this case, BTC3L stands for BTC 3X Long product, while BTC3S stands for BTC 3X Short product.


Q: What are the similarities and differences between leveraged ETF products and futures contract products?
R: Similar to futures contract products, leveraged ETF products are derivatives with leverage effect, which can amplify investors' returns and become a convenient risk hedging tool. However, compared with futures contracts, leveraged ETF products mainly have the following unique characteristics:

• No Margin and liquidation: For those investors who don't have much time to look at the market constantly, buying the leveraged ETFs tokens can save your energy a lot. No margin is needed and without any liquidation risk (Risk warning: If the direction is wrong, there is a risk that the price will reach zero in extreme market conditions);
• Fixed leverage. For futures holders, with the change of asset prices, the leverage of contract positioning may change, which deviates from the original intention of investors. The leverage ratio of leveraged ETF products is basically constant, which allows investors to better comply with their investment plans;
• Compound-interest effect and risk limitation.The profit of the leveraged crypto ETF is automatically transferred to the principal by the system. If a user profits from their purchased leveraged ETF, their earnings will be added to the principal in the next rebalance (Normally, the platform will perform positioning rebalancing at 13:00:00 (UTC-3) every day to ensure that the combined leverage ratio does not deviate too much from the target ratio). Rebalancing occurs on a daily basis. As a result, the user’s position in the leveraged ETF product will increase, compounding their gains.

Q: What are the fees for leveraged ETF products?
Trading leveraged crypto ETFs will incur trading fees and management fees.
Leveraged crypto ETF trading fees are identical to that of spot trading fees .
The management fee (generally 0.001% each day) will be reflected in the change in net value and will only be charged at 13:00 (UTC-3). If you do not hold the product at this time point, there will be no management fee.

Q: What are the risks of holding Leveraged ETF products?

• Compared with the spot market, the market of leveraged tokens has higher risks and uncertainties. Holding leveraged tokens may result in numerous intraday gains and losses;
• The rebalancing mechanism and management fees mean that the longer you hold a leveraged token, the more fees you need to pay. Traders should be cautious about holding leveraged tokens in the long term.