Leading cryptocurrency exchange Binance is rolling out new leverage products called “Binance Leverage Tokens (BLVT),” two months after delisting FTX’s Leveraged Tokens.
Binance Leveraged Tokens – BTCUP and BTCDOWN
Leveraged tokens are designed to give traders exposure to the crypto markets without the nitty-gritty that comes with managing a leveraged position.
Launching this week, the exchange will list the first pair of the Binance Leveraged Tokens – BTCUP and BTCDOWN – on May 14, for trades in the USDT market with a daily management fee as low as 0.01%.
BTCUP, according to Binance, allows traders to generate leveraged gains whenever Bitcoin price increases, while BTCDOWN will enable traders to earn profits when the price of Bitcoin declines.
After listing, the pairs will only be available for trading on the Binance’s Spot Advanced trading interface. They will not be available for trades on mobile apps or Binance’s Spot Basic/Classic trading interfaces.
Per the announcement, the tokens come with a range of leveraged positions ranging between 1.5x and 3x without maintaining constant leverage. This makes the BLVT “rebalance on an as-needed basis” during high volatility.
March 2020: Binance Delists All FTX’s Leveraged Tokens
Binance’s move to launch its leveraged tokens is coming just two months after the exchange delisted all FTX’s Leveraged Tokens simply because users don’t understand how they work. The FTX tokens were listed barely for 60 days on Binance.
At that time, the exchange’s CEO, Changpeng Zhao (CZ), explained that they had no other choice than to remove the FTX tokens since users do not know how to trade the products while also failing to “read warning notices.”
Following Binance’s announcement to roll out the BLVT, members of the crypto community are wondering why the exchange is launching the same products it delisted less than two months ago.
Binance said in the announcement that the leveraged tokens were developed after careful consideration of its customers’ requests and evaluation of similar leverage products.
“Binance Leveraged Tokens provide lower risks and fees compared to derivatives and other conventional leveraged tokens (not issued by Binance), providing users with better protection,” the exchange said.
Unlike the FTX tokens that rebalance once per day and whenever they get 4x levered, Binance claims the BLVT is designed to rebalance only when needed as it helps to increase profit in a favorable market while reducing losses and liquidation in an unfavorable market.