[Gate.io Academy] Master Leveraged ETF Token in 5 days:Day 3
What is the difference between leveraged tokens and margin trading?

1. Margin trading leverages the borrowing of funds to its margin amount to enlarge the profits or losses, the leverage is based on the amount of crypto that one holds. However, the leveraged tokens seek to magnify profits by amplifying the rise and fall of the underlying asset, and the leverage is reflected in the price changes.

2. Leveraged tokens products do not require margin or crypto borrowing, and there is no risk of liquidation.

What is the difference between leveraged tokens and futures trading?

1. No liquidation risks: The leveraged tokens require no margin and are without the risk of liquidation.

2. Fixed leverage: The actual leverage in the perpetual contract will change with the fluctuation of the position value. However, the leveraged tokens are rebalanced regularly every day, the leverage is fixed at a certain rate.

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Day 3
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