Introduction to Smart Leverage

What is Smart Leverage?

Smart Leverage is a non-principal-protected structured financial product designed to help users reduce liquidation risk when trading with high leverage. During the settlement period, positions are protected from liquidation and can be redeemed before settlement, allowing users to better manage short-term market volatility.

Smart Leverage supports leverage of up to 200× for selected tokens and is suitable for users who want to amplify their market exposure in a single direction while reducing the risk of liquidation caused by short-term price fluctuations.

Smart Leverage is ideal for users who:

Trade with higher leverage — Increase market exposure with high leverage to make more efficient use of their capital
Prefer not to monitor the market constantly — Positions are protected from liquidation before settlement, reducing the impact of short-term market volatility.
Value flexibility — Redeem your position at any time before settlement, allowing you to manage your funds more efficiently.

Why choose Smart Leverage?

Feature	Smart Leverage	Traditional Leveraged Trading
Leverage	Up to 200× leverage	Usually limited by lower leverage ratios
Liquidation Risk	No liquidation before settlement, helping reduce the impact of short-term market volatility	Positions may be liquidated due to short-term market fluctuations
Flexibility	Redeem your position at any time before settlement, stronger fund liquidity	Positions must be closed manually before funds are released, higher risk
Fees Transparency	No additional product fees, controllable costs	Trading fees, funding fees, and other applicable fees may apply

Product Terms

Breakeven Price	A floating indicator calculated by the platform. For longs, the breakeven price is always above the entry price. Conversely, for shorts, it is always below the entry price. Once an order is confirmed, the breakeven price will not change.
Current Price	The current Mark Price of Perpetual contracts.
Settlement Price	The settlement price is determined by calculating the average of the Derivatives Index Price every second for 30 minutes before expiration.

How Does Smart Leverage Work?

In standard derivatives trading, a 1% price change can trigger liquidation for positions using 100x leverage.

With Smart Leverage, traders can long or short their desired tokens with up to 200x leverage to amplify potential gains. During periods of extreme market volatility, traders’ initial investment amount will not be affected until settlement.

At settlement, the profit or loss is determined by the settlement price, compared to the breakeven price. The maximum loss is capped at the trader’s initial investment amount.

The PnL scenarios for Smart Leverage longs and shorts are as follows:

Direction	Scenarios	Calculations	Outcomes
Long	Settlement Price ≥ Breakeven Price	Payoff = Investment Amount + [Investment Amount × Leverage × (Settlement Price - Breakeven Price ) / Breakeven Price]	You will receive your investment amount and the leveraged return.
Long	Settlement Price < Breakeven Price	Payoff = max (Investment Amount + [Investment Amount × Leverage × (Settlement Price - Breakeven Price) / Breakeven Price], 0) The minimum payoff is 0.	You may sustain some losses. In the worst-case scenario, you will lose your entire investment amount.
Short	Settlement Price ≤ Breakeven Price	Payoff = Investment Amount + [Investment Amount × Leverage × (Breakeven Price - Settlement Price ) / Breakeven Price]	You will receive your investment amount and the leveraged return.
Short	Settlement Price > Breakeven Price	Payoff = max (Investment Amount + [Investment Amount × Leverage × (Breakeven Price - Settlement Price) / Breakeven Price], 0) The minimum payoff is 0.	You may sustain some losses. In the worst-case scenario, you will lose your entire investment amount.

Let’s look at some numerical examples.

Example

Trader A longs BTCUSDT using Smart Leverage with the following order specification.

Investment Amount: 5,000 USDT

Entry price: 51,000 USDT

Leverage: 100x

For normal derivatives trading, Trader A’s position will likely be liquidated at 50,745 USDT.

With Smart Leverage, Trader A’s investment will not be liquidated before settlement, even with extreme market volatility.

Trader A’s payoff will be determined by the breakeven price. Suppose the breakeven price is 52,000 USDT. These are several possible PnL scenarios at settlement (for illustrative purposes only).

	Scenarios	Settlement Price (USDT)	Payoff (USDT)	PnL (USDT)
1	BTC plummets	48,000	Payoff = max(5,000 + [5,000 × 100 × (48,000 - 52,000)/52,000], 0) = max(-33461.54, 0) = 0	-5,000 (the entire investment amount)
2	BTC surges	53,000	Payoff = 5,000 + [5,000 × 100 × (53,000 - 52,000)/52,000] = 14,615.38 USDT	9,615.38
3	BTC surges to 53k before correcting to the 51k level	51,800	Payoff = max(5,000 + [5,000 × 100 × (51,800 - 52,000)/52,000], 0) = 3,076.92 USDT	-1,932.08
4	BTC nosedives to 47k before bouncing back to below 53k	52,500	Payoff = max(5,000 + [5,000 × 100 × (52,500 - 52,000)/52,000], 0) = 9,807.69 USDT	4,807.69

Risk

Smart Leverage is an advanced structured product that is not principal protected. If the settlement price falls below the breakeven price, the entire or part of your investment amount will be lost.

Notes

Smart Leverage allows traders to either follow the normal settlement timeline, or opt for early redemption.
The redemption proceeds from Smart Leverage will be calculated based on the payoff formula at expiration. There might be a slight difference due to market fluctuations, but this potential difference will be capped at 0.5%.
Early redemption will not be possible if the calculated payoff is negative or equal to 0. Additionally, it will no longer be available starting from one hour before settlement.