Binance Leverage Tokens Explained Feature Image

Binance Leverage Tokens Explained with Fees and Risks

Binance Leverage Tokens – Summary

➤Binance Leveraged Tokens represent a basket of perpetual contract positions. 

➤The price of the tokens tracks the change in the notional amount of the perpetual contract positions in the basket and alterations in the multiples of leverage level.

➤With the Binance leveraged tokens, you can go long and short on Binance.

Unlike crypto leveraged trading, you could get into a leveraged position without collateral, maintain margin maintenance and worry about the liquidation risk.

Binance Academy – Leveraged tokens

In the video below, you can see how Binance Academy describes leveraged tokens. Binance Academy is the free crypto educational platform launched by Binance. 

How to start trading with Binance Leverage Tokens?

First, you must sign up with Binance and create an account.

After you have created an account with Binance, Login to your account and follow these instructions.

  1. Go to Derivatives in the header menu and click on Leveraged Tokens on the drop down menu.
  2. Here, you can switch between listing your tokens and all available tokens. In this screen, all tokens are selected
  3. Name of the leverage token. From the name you can see the direction as well (DOWN or UP)
  4. NAV, Net asset value, refers to the price of a leveraged token
  5. Real leverage – Since the leverage is variable this represent the current leverage
  6. Last price, last traded price
  7. 24h change, change in % for the last 24h
  8. Trade, Subscribe and Redeem – Trade is on the spot market, while subscribe and redeem is against liquidity provided by Binance (this is usually at a higher price).
Before you can trade with Binance leverage tokens you need to accomplish and pass a quiz about this trading instrument. Read full Binance review 2020 for more general information about the trading site.

What is the leverage level of Binance Leveraged Tokens?

Its very important to understand that Binance leveraged tokens do not maintain a constant leverage, like most other leverage trading instruments.

Instead, Binance leveraged tokens maintain a variable leverage between 1.5x and 3x. 

Since Binance leveraged tokens are not forced to maintain a constant leverage, they can rebalance under extreme market conditions to maximize profits and minimize losses.

The rebalancing of positions of Binance Leveraged Tokens is governed by Binance’s proprietary algorithms with the aim to maximize correlation between Binance Leveraged Tokens and the underlying margin-leverage position without a profit-guarantee.

If you are more interested in Binance leverage crypto trading products, see our article where Binance margin trading explained or how to trade Binance futures.

Binance Leverage Tokens Pros and Cons


  • No liquidation risk
  • No collateral
  • No maintaining margin maintenance
  • Variable leverage
  • Complicated fees system as you can see below
  • Not for long-term investment (As for any leveraged product)

Binance Leverage Tokens Fees

There are several different fees associated with Binance leverage tokens. You must be aware of those fees before you start trading since they will impact your trading result.

You can either buy leverage tokens in the market and pay trading fees or you can subscribe and “buy” from Binance. The default fees are the same but the subscription supply is limited per day. You don’t pay both fees. The same goes for sell in the market and redemption of leveraged tokens. You pay one of the fees and not both of them.

Trading fees: Trading fees are charged when buying or selling tokens in the spot market, and the fee schedule is identical to spot trading. The standard fee is 0.1% but you can reduce it if you increase your 30 day total trading volume, or adding BNB to you balance and pay your Binance trading fee with BNB
Subscription fees: Subscription fees are charged when users choose to subscribe tokens, which is currently set at 0.1% per subscription. When you subscribe to leverage tokens you buy directly from Binance and this supply is limited per day. The other alternative is to use the market and here the trading fees apply.
Redemption fees: Redemption fees are charged when users choose to redeem tokens, which is currently set at 0.1% per redemption. When you redeem your leverage tokens Binance “buy you out” and this supply is limited per day. The other alternative is to use the market and here the trading fees apply.
Management fees: A daily management fee of 0.01% will be charged at 00:00 UTC and reflected directly in the net asset value of the leveraged tokens. This approximately corresponds to a management fee of 3.65% per year and clearly shows you that this trading instrument is not made for long term investments.
Funding fees: Funding fees are paid (or paid to) the underlying fund based on the funding rate and reflected directly in the net asset value of the Leveraged tokens. Binance takes no fees for funding rate transfers; these are directly between traders. Simply, this fees are paying interest to the lenders for you to be able to leverage your position.

Binance Leveraged Tokens Risks

As with all investments, there are risks associated with Binance leverage tokens.

There is always a risk that the value of any investment, including Binance leverage tokens, can become zero (0) and cannot not be recovered due to inherent market risks, high fees, slippage, rebalance algorithm frontrunning and any other perceived unknown risks associated with Binance Leveraged Tokens.

Also, remember that leverage trading, including Binance leverage tokens, are NOT invented for long term investments because of the volatility decay.

Liquidity and pricing risks associated with Binance Leveraged Tokens

Because Binance provides liquidity to the leveraged tokens, there is a daily total redemption limi of each leveraged token at 100.000 token.

Users can only redeem 1.000 tokens per account, per day. However, it will generally be more expensive to redeem than rather than selling them on the spot market. Binance recommends to sell in the spot market as your first option, especially during normal trading times.

How to trade Binance Leveraged Tokens from the Binance app?

You can also trade Binance leveraged tokens form the Binance app.

Just click in the following order to get to this screen.

  1. Markets in the footer menu
  2. ETF in the second header menu (as you can see in the screenshot)
How to trade Binance leveraged tokens from the Binance app

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