This creation and redemption mechanism is what ultimately enforces that the leveraged tokens are worth what they're supposed to be. This will destroy the token cause the ETHBULL account to sell back the $30,000 worth of futures and credit your account with $10,000. To do that, you can send your $10,000 of ETHBULL back to us, and redeem it. You can also redeem leveraged tokens for their net asset value. For instance, say that you want to create $10,000 of ETHBULL.To do so you send in $10,000, and the ETHBULL account on buys $30,000 worth of ETH perpetual futures. This means you can custody your own leveraged tokens.Д®ach leveraged token gets its price action by trading perpetual futures. That means that-unlike margin positions-you can withdraw them from your account! You go to your wallet and send leveraged tokens to any ETH wallet. No need to manage collateral, margin, liquidation prices, or anything like that you just spend $10,000 on ETHBULL and have a 3x leveraged long coin. You can buy leveraged tokens just like normal ERC20 tokens on a spot market. But if you instead buy ETHBULL, the leveraged token will automatically sell off some of its ETH as markets go down-likely avoiding liquidation so that it still has assets left even after a 33% down move. If you put on a 3x long ETH position and over the course of a month ETH falls 33%, your position will be liquidated and you will have nothing left. Leveraged tokens will automatically reinvest profits into the underlying asset so if your leveraged token position makes money, the tokens will automatically put on 3x leveraged positions with that.Д¬onversely, leveraged tokens will automatically reduce risk if they lose money. There are three reasons to use leveraged tokensпјљ If ETH goes down 1% during a day, then ETHBULL goes down 3% and ETHBEAR goes up 3%. If ETH goes up 1% during a day, then ETHBULL goes up 3% and ETHBEAR goes down 3%.

There are currently two leveraged tokens for every future: BULL (+3x) and BEAR (-3x). For every 1% ETH goes up in a day, ETHBULL goes up 3% for every 1% ETH goes down, ETHBULL goes down 3%. Leveraged tokens are ERC20 tokens that have leveraged exposure to crypto.ДЇor example, take ETHBULL, a 3x long ETH token.

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