The uniqueness of Gate ETF tokens: redefining crypto leveraged trading

“BTC3L” single-day increase of 15%, and this only requires Bitcoin itself to have a 5% rise. As of December 17, 2025, products that encapsulate complex financial engineering into simple spot trading are becoming rapidly growing trading tools on the Gate platform.

Leverage ETF tokens are not traditional margin lending products; they are backed by a sophisticated systematic operation mechanism.

01 Design Without Liquidation Risk: The Fundamental Difference from Traditional Leverage

In traditional crypto leverage trading, “liquidation” is a Damocles sword hanging over every trader. Once price fluctuations cause margin to be insufficient, positions will be forcibly liquidated, regardless of subsequent market reversals, and unrelated to the investor.

Gate ETF leverage tokens fundamentally reshape this risk structure. They encapsulate the underlying perpetual contract position through spot trading. This means that, as a user, you are buying and selling tokens named “BTC3L” or “ETH3S,” rather than directly operating a contract position that requires maintaining a margin ratio.

Therefore, the risk of forced liquidation is completely eliminated. Even if the token price drops from 100 USDT to 1 USDT, the number of tokens you hold will not change due to system-forced selling. This greatly reduces traders’ psychological pressure, allowing you to focus more on market trend judgment rather than constantly worrying about margin levels.

02 Auto-Rebalancing Mechanism: The Core to Maintaining Precise Leverage

How does the Gate ETF leverage token ensure its gains and losses always closely track the underlying asset (such as Bitcoin) at 3x or 5x? The answer lies in its core daily automatic rebalancing mechanism.

This mechanism is executed automatically by the system, aiming to keep the leverage multiple of the investment portfolio at the target level (e.g., 3x). When the market moves favorably, the system automatically uses part of the profits to increase the position to achieve a “compound interest” effect; when the market moves unfavorably, it automatically reduces the position to control risk. This process is fully automated, requiring no manual intervention from users.

For example, the 3x long token’s rebalancing trigger rule is: daily at 0:00 (UTC+8), when the actual leverage fluctuates between 2.25 and 4.125 times, the system usually does not rebalance; once the leverage exceeds this range, or if the underlying asset’s daily price change exceeds 1%, the system will readjust the leverage back to 3x.

03 Transparent Cost Structure: Fixed Management Fee Replaces Floating Funding Rate

In traditional perpetual contract trading, the funding rate is an uncertain cost factor. When market sentiment is extremely bullish or bearish, the funding rate can become very high, eroding trading profits.

Gate ETF leverage tokens adopt a simpler, transparent cost model: a fixed daily management fee of 0.1%. This fee covers the platform’s costs for hedging and rebalancing in the perpetual contract market, such as contract fees, funding costs, etc.

For traders, the advantage of this fixed fee is cost predictability. Regardless of how intense the market bullish or bearish sentiment is, you can clearly know your holding costs, facilitating precise profit calculation and risk management.

04 Minimalist Trading Experience: Leverage Trading Becomes as Simple as Spot Trading

The most notable enhancement in the Gate ETF leverage tokens is their extremely low operational threshold. Users do not need to transfer margin, borrow funds, or understand complex contract rules.

The entire trading process is identical to buying and selling spot assets like Bitcoin and Ethereum: on the Gate trading platform’s “Leverage ETF” section, find the target token (e.g., “BTC3L” representing 3x long Bitcoin), input the purchase amount and price, and click buy.

This design transforms complex financial derivatives into tools that ordinary investors can easily understand and use, greatly broadening the user base capable of participating in leverage strategies.

05 Clear Application Scenarios and Risk Awareness

Despite their advantages, understanding the best application scenarios and inherent risks is essential for smart use of this tool.

Best application scenarios:

Gate ETF leverage tokens are designed for short-term trend trading. In markets with clear one-sided trends, their auto-rebalancing mechanism can effectively amplify returns. For example, when Bitcoin begins a strong upward trend, holding “BTC3L” will yield returns far exceeding simply holding spot.

Main risks and limitations:

1. Volatility Decay: In choppy markets, frequent rebalancing may cause principal erosion. For example, if Bitcoin’s price rises then falls back to the original level, the net value of the 3x leverage token may suffer losses due to the rebalancing mechanism.
2. Not suitable for long-term holding: Due to daily management fees and the above decay effects, this product is not suitable as a long-term investment tool. It is more appropriate for short-term trading lasting hours to days.
3. Losses are magnified proportionally: Leverage amplifies gains but also proportionally amplifies losses. This is an inherent property of all leverage products, requiring traders to strictly manage their positions, such as not investing more than 1%-5% of total funds per trade.

Future Outlook

As of December 2025, over 46 million users worldwide are exploring the possibilities of the crypto market on the Gate platform. When a novice investor buys “BTC3L” on the spot page, they may not be aware of the sophisticated automatic rebalancing algorithm running behind the scenes.

What they feel is only the power of leverage encapsulated in a simple trading action—no borrowing agreements to sign, no liquidation warning pop-ups, only a clear experience of asset net value being amplified with market fluctuations.