Protected Leverage Vaults Are Live. Amplify Gains. Cap the Losses.
Leverage has always been a double-edged sword. It boosts gains when the market moves your way, but it hits just as hard when it doesn’t.
Toros has changed the rules. The new Protected Leverage Vaults add a downside protection layer to the familiar leverage tokens model. You still get amplified gains, but now your losses are minimized at a defined floor. No forced exits. No panic unwinds. Just leverage with a safety layer designed to cap the downside.
New to Toros? Our leverage tokens offer 2× or 3× exposure to crypto assets with no liquidations* and no active management.
Less Drawdown, More Control
Anyone who’s traded with leverage knows the feeling. The market turns against you, and your position gets liquidated. The losses are locked in instantly. Toros’ original leverage tokens improved on that by rebalancing instead of liquidating*. But in fast-moving markets, users still felt the weight of a drop.
Protected Vaults go a step further. When the market falls, the vault slows the drawdown and holds the floor. There’s no forced exit*. You stay in the position, and the system takes care of the risk.
As shown above, the Protected Vault holds its ground during a drawdown.
Each position combines three onchain components:
- Aave lending and borrowing hedges your downside. The vault lends stablecoins and borrows BTC to reduce downside exposure.
- The vault uses Flat Money contracts to create the leverage and set a protection floor that adjusts with the market. Losses slow once that floor is reached.
- A smart contract system manages two key rules. Leverage stays in a safe range (e.g. for 2× leverage, around 1.8× to 2.2×), and the protection level stays close to the market before it is updated.
The vault performs like a normal leverage token when prices rise, but slows losses once it hits the safety floor. The vault flattens out instead of falling further.
There’s no forced selling* and the system keeps the position within safe limits. You can still draw down, but once the floor is reached, the risk decreases.
At launch, the flagship Protected Vaults are 2× and 3× long BTC.
You can deposit with any major Arbitrum asset like USDC, ETH, or WBTC.
Fees
To provide depositors with downside protection, these vaults have higher entry and exit fees than regular leveraged tokens.
To maintain the price protection floor and leveraged exposure, there are rebalance and funding fees. This is facilitated by Flat Money.
This provides a predictable downside that is paid like a continuous insurance to protect depositors from sudden drawdowns.
Quick Explainer for First-Time Users
In plain English: you deposit crypto, the vault doubles or triples your BTC exposure, and a built-in protection layer limits how much you can lose. You get the upside, and the vault handles everything behind the scenes.
Why Protected Leverage Matters
Protected Vaults are useful for different types of users.
Active traders get leverage without needing to manage risk. Passive holders can stay long and aim for amplified gains, knowing there’s a limit to how much they can lose.
Unlike regular leverage tokens, which are often better suited for short-term trades, Protected Vaults are designed to hold up better over time. The built-in floor and automated risk management make them more useful for medium-term strategies.
This is leverage without the usual stress. No upkeep, no constant monitoring, and a built-in floor that slows deeper drawdowns.
1× BTC Exposure with Built-In Protection
Alongside the Protected Vaults, Toros is also launching a 1× protected version.
It gives you regular BTC exposure, with a built-in floor that limits how far your performance can fall. It uses the same protection system as the 2× and 3× vaults, just without the added exposure.
It’s designed for users who want to stay long BTC while softening the impact of big drawdowns. It also fits well into strategies where risk needs to be contained.
Looking Ahead
Protected Vaults are just the beginning. Toros is already testing support for other assets beyond BTC. These vaults will give users more ways to access leverage with built-in protection.
More analytics and features are also on the way. Users will soon be able to track protection levels, vault performance, and other key stats in real time.
The Bottom Line
Protected Vaults give you leverage with less downside and no liquidations*. Whether you’re chasing amplified gains or looking to stay long with a softer landing, the 1×, 2×, and 3× strategies are now live and ready to use.
*Disclaimer: Toros leverage tokens are designed to avoid liquidation by using rebalancing. While extreme scenarios could still trigger one, no Toros leverage token has ever been liquidated. Four years and counting.
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Toros Protected Leverage Vaults use Flat Money’s audited smart contracts to manage downside protection.
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