Gate ETF Leveraged Token FAQs (FAQ)

In the cryptocurrency market, want to amplify your gains but feel intimidated by complex contract trading? Gate ETF leveraged tokens provide a simplified way to “spotify” leveraged trading. This article will answer common questions from beginners about this tool, helping you understand how it works, its advantages, and risks.

1. What is Gate ETF Leveraged Token?

Gate ETF Leveraged Token is an innovative financial derivative that combines perpetual contracts to magnify the price fluctuations of the underlying asset (such as BTC, ETH) to a fixed multiple (e.g., 3x or 5x), and trades as a token on the spot market.

Its core features include: you don’t need to manage margin yourself, there’s no liquidation risk, and buying and selling are as simple as spot trading. For example:

• BTC3L: represents 3x long Bitcoin. When BTC price rises 1%, the token’s net asset value aims to increase by about 3%.
• ETH5S: represents 5x short Ethereum. When ETH price drops 1%, the token’s net asset value aims to increase by about 5%.

2. How does it achieve a “no liquidation” leveraged effect?

Traditional leveraged contracts require users to manage their own margin and face forced liquidation risks. The “no liquidation” feature of ETF leveraged tokens stems from their professional management mechanism:

• Professional team management: The platform’s professional team uses perpetual contracts behind the scenes to establish and manage positions, maintaining the target leverage.
• Automatic rebalancing (repositioning): This is the key mechanism. The system adjusts positions daily or during significant market swings. When the market moves favorably, it automatically adds to the position to achieve compounding; when unfavorable, it automatically reduces the position to prevent liquidation, thus maintaining the target leverage and avoiding liquidation.
• Simplified for users: You only need to buy and sell this token on the spot market to indirectly enjoy leverage returns, with no need to handle complex contract operations.

3. How does it differ from other leverage tools? What are the advantages?

Compared to futures contracts, ETF leveraged tokens mainly offer low entry barriers and low psychological pressure.

4. What are the costs and risks?

Costs:

• The platform charges a daily 0.1% management fee to cover contract fees, funding rates, etc. Gate currently maintains this rate at a relatively low level in the industry.

Main Risks:

• Volatility amplification risk: Leverage amplifies gains but also proportionally amplifies losses.
• Rebalancing wear and tear: Frequent rebalancing in oscillating markets can cause net asset value to decline. Therefore, it is not suitable for long-term holding, only for short-term trend trading.
• Tracking error: Due to fees and rebalancing mechanisms, the long-term price movements of the token may not perfectly match the exact multiple of the underlying asset’s price changes.

5. In which market conditions is it most effective?

ETF leveraged tokens are a tool for capturing short-term trends and are most effective in:

• Strong, one-sided trending markets: The clearer and more continuous the trend, the more pronounced the effect of automatic position addition and compounding.
• News-driven events: Major technological upgrades, regulatory clarity, large institutional holdings, etc., that cause market consensus volatility.
• Sector rotations and bursts: When specific sectors like AI, Meme, or public chains experience collective rallies, using the corresponding leveraged tokens can quickly capture opportunities.

Important reminder: avoid holding during sideways or uncertain markets.

6. How to trade on Gate?

Trading process is exactly the same as spot trading:

1. Log in: Visit Gate.com or open the Gate App.
2. Enter the trading page:
   1. Web version: Click on “Trade” at the top -> select “Leveraged ETF” section.
   2. App version: In the “Spot” page, find and click the “ETF” tab.
3. Choose trading pair: find your target token in the list or search, e.g., BTC3L/USDT.
4. Place order: input price and amount, then click “Buy” or “Sell”.

7. Will the platform’s product lineup change?

Yes. To ensure liquidity and product quality, trading platforms regularly evaluate and optimize their listed products. For example, Gate delisted some less active leveraged tokens in August 2025. This is normal market management. If a product is delisted, the platform typically buys back user-held tokens at net asset value.

Users are advised to pay attention to official announcements for the latest product information before trading.

Summary and Recommendations

In summary, Gate ETF leveraged tokens are tools that encapsulate complex financial engineering into simple spot trading, lowering the barrier and psychological burden of using leverage, especially suitable for traders who can identify short-term trends but prefer not to operate complex contracts.

The key advice for beginners: recognize their role as “short-term trend tools,” set proper stop-loss and take-profit levels, avoid holding in sideways markets, and never invest more than you can afford to lose.