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An Overview of XRP1X
Summarize in ChatGPTXRP 1x gives you 1x spot exposure to XRP through a perps position at constant leverage.
Actual leverage is monitored within the target range
If leverage goes outside the target range, it’s rebalanced back to the target leverage
Because of the constant re-leverage, when price keeps moving in one direction, it acts like a power perpetual
Toros leveraged tokens are best used for short term directional upside. Single direction movements can exceed returns compared to typical perp leverage products. This is because Toros increases leverage as its price increases, to maintain the leverage range.
All Toros leveraged tokens have built-in protection against downside liquidation. For example, if you had held a typical -2X ETH Short perp from March to May 2021, you would have been liquidated several times over as ETH went up in price. Holding the Toros Ethereum Bear -2X however, would have protected you from liquidation. This is because Toros rebalances on price movements to maintain the leverage range. When a Toros token decreases in value, its leverage also decreases.
In sideways (up-down) markets, Toros pools can underperform typical leverage products. This is known as Volatility Decay. Toros pools work similarly to Leveraged ETFs. Volatility decay occurs through rebalancing and rebalance fee. Additional decay is also caused by borrowing rates. Toros pools are therefore intended for short term directional bets for best results.