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Leverage Tokens on Toros vs Trading Perps on GMX or Hyperliquid

07/03/25
Leverage Tokens on Toros vs Trading Perps on GMX or Hyperliquid

Want to amplify your gains in crypto? There are two main ways to get leveraged exposure onchain, perpetual futures (known as perps) and leverage tokens.

Perps are popular on platforms like GMX, Hyperliquid, and Synthetix. They offer flexible leverage but require active management and come with liquidation risk.

Leverage tokens, like those on Toros, provide exponential upside in trending markets and handle the risk and rebalancing for you. No liquidations, no margin calls.

This post breaks down how they compare, and when to use each.

Perpetual Futures (Perps) 

Perps are derivatives that let you long or short an asset with leverage, often up to 50x or more. There’s no expiry, and they track the spot price through a funding rate that traders pay or receive depending on market imbalance.

Key traits:

  • Manual control: You open and close positions yourself
  • Custom leverage: Choose how much risk you take on.
  • Liquidation risk: If the price moves too far against you, you lose all your money.
  • Funding payments: You may be charged a significant amount to hold the position, sometimes over 100% annually, especially in skewed markets.

Perps can be powerful but demand attention and constant risk management. They're not passive, and even experienced traders get caught out in fast-moving markets.

Leverage Tokens (e.g. Toros Tokens)

Leverage tokens automatically manage a leveraged position on your behalf. For example, Toros’ ETHBULL3x token targets 3x long ETH. It’s like holding a perpetual position, but the token rebalances to maintain leverage and protect downside.

Key traits:

  • No liquidation risk: The token manages exposure internally, so you can’t get liquidated.
  • Auto-compounding: In trending markets, gains boost exposure, which compounds returns. 
  • Fully passive: You just hold the token, no active monitoring needed.

This makes leverage tokens ideal for users who want leveraged exposure without the stress or complexity of perps. Leverage tokens constantly rebalance to stay at target exposure. That’s great in strong trends, but in sideways markets, they can end up buying high and selling low, leading to performance drag even if the price finishes flat.

Let’s look at three real-world examples to show how 3x ETH perps and Toros ETHBULL3x behave in different markets.

ETH rises from $1,000 to $1,500 over 5 days (+50%)

  • 3x ETH Perp (manual):
    Estimated gain: ~150%
    If no margin added, leverage decreases as price rises
  • Toros BTCBULL3x token: Auto-releverages, increasing exposure into the uptrend. Estimated gain: ~210% (From compounding over multiple days.)

Takeaway:

Toros ETHBULL3x outperformed a 3x perp by nearly 60 percentage points, without any of the effort or risk of managing the position manually.

Compounding in action:

The chart below shows how ETHBULL3x on Toros compounds over time. It outperforms both spot ETH and a static 3x ETH position by re-leveraging as the price trends upward.

Example 2: High Volatility Chop

ETH bounces between $1,000 and $1,100 multiple times over 5 days, ending where it started

  • 3x ETH Perp (manual): Estimated PnL: ~0%, assuming flat price and no extreme funding rates
  • Toros ETHBULL3x token: Experiences volatility decay, small losses from rebalancing when leverage drifts outside the 2.7x–3.3x range Estimated loss: -4% to -6%, depending on how frequent and sharp the swings are

Takeaway: Leverage tokens shine in strong trends. But in volatile, sideways markets, they can slowly bleed value, even if the price doesn’t go anywhere. This is known as volatility decay, and it’s the trade-off for automated exposure and liquidation-free design.

Example 3: Sharp Drawdown

ETH drops from $1,500 to $1,000 in 1 day (–33%)

  • 3x ETH Perp (manual): Position is liquidated, unless you top up margin very quickly Estimated loss: 100%
  • Toros ETHBULL3x token: Rebalances during the drawdown to reduce exposure Estimated loss: –68% to –72%, but avoids full wipeout

Takeaway: Perps offer more control, but if you’re caught in a sharp move, you can lose everything. Leverage tokens reduce exposure automatically and protect capital from hitting zero, even in large crashes.

Crash Protection in Action:

The chart below shows Toros ETHBULL3x (purple) compared to a 3x ETH position (grey) and spot ETH.

As ETH drops 33%, the Toros token suffers, but avoids full wipe-out, unlike the static 3x perp.

Summary

If the market’s trending, leverage tokens can do what perps can’t: amplify gains exponentially, passively.

That’s because tokens like Toros ETHBULL3x auto-compound as price rises, rebalancing into strength without you lifting a finger. It’s a flywheel effect: each gain increases exposure, and that exposure drives even bigger gains.

Perps like those on GMX, Hyperliquid, Synthetix, and dYdX still have a place. They're great for skilled, active traders who want to fine-tune entries and manage risk manually. But they come with the cost of liquidations, funding, and constant monitoring.

Leverage tokens are for users who want the upside of perps without the stress. In trending markets, they outperform. In crashes, they reduce risk. And in chop, the cost is volatility decay, not a wiped-out account.

For compounding exposure to market trends, leverage tokens are hard to beat.

Trade Toros Leverage Tokens