A leveraged token is essentially a fund and each leveraged token corresponds to some positions of perpetual contracts. By dynamically adjusting futures positions through the rebalancing mechanism, fund operators ensure a fixed multiple between the daily returns of the leveraged token and the spot returns of the corresponding underlying asset. Hence, leveraged token trading will incur transaction fees, funding fees, order price spread loss, and other trading costs. The platform needs to charge some management fees to cover these running costs.
Trading leveraged tokens involves two types of fees: transaction fees while trading leveraged tokens and management fees for maintaining the holdings of leveraged tokens. Please see more details below:
(1) Transaction fees:
Leveraged token trading is essentially spot trading. Just like the spot trading fee standards, the fee for trading leveraged tokens is Maker: 0.1000%/Taker: 0.1000%.
(2) Management fee:
AscendEX will charge users the management fee for holding leveraged tokens daily at 12:00 a.m., 8:00 a.m., and 4:00 p.m. UTC, respectively. The fee will be automatically deducted from the net asset value of the leveraged tokens and no extra payment is required from users. No management fees are needed if no holdings happen at the three above timelines. Management fees vary depending on the leverage applied to a specific leveraged token.
5x leveraged tokens: daily holding management fee:0.5%, charge once every 8 hours, 3 times a day, and 0.167% per time.
3x leveraged tokens: daily holding management fee:0.3%, charge once every 8 hours, 3 times a day, and 0.1% per time.
Risk Disclosure: As an emerging financial derivative, theoretically, there are no liquidation risks for a leveraged token. However, with incorrect trend predictions, there will be a risk that the net asset value of a leveraged token approaches 0 amid extreme market conditions. Please fully understand the rules before engaging in leveraged token trading and be cautious to reduce potential risks.