Flexible Leverage Indices implement a collateralized debt position in a controlled and efficient way to achieve leveraged returns and, by abstracting its management into a simple index, make leverage strategies broadly accessible. Debt position maintenance is automated by the index rules and a unique algorithm helps to reduce rebalancing turnover. ETH2x-FLI targets 2x price exposure to ETH.
FLIt = FLIt-1 * (1 + (Pricet/Pricet-1 – 1) * CLRt-1 – BorrowRatet * (CLRt-1 – 1))
Current Leverage Ratio for next epoch
CLRt+1 = max(MINLR, min(MAXLR, CLRt * (1 – RS) + TLR * RS))
The index rebalances every 24 hours and determines a new leverage ratio based on the formula.
The methodologist has discretion to update any of the parameters at any time via IIP to improve or protect the integrity of the product.
ETH2x-FLI has a 1.95% annual streaming fee.
A 0.1% fee is charged upon minting/redemption.
The following risks may apply to this digital asset: full or partial loss of digital assets due to technical hacks, exploits, or failures that may occur at the protocol or smart contract level of a product’s infrastructure; restrictions placed on the digital assets by regulatory authorities in the end users region; loss of digital assets or loss of access to the digital assets due to decisions made by centralized providers of the underlying assets; full or partial loss of digital assets through standard product operations which can be hampered by unexpected market conditions; full or partial loss of digital assets due to changes to underlying product assets made by the originating protocols; full or partial loss of digital assets due to volatility, correlation, value at risk, and contagion risks; underperformance of digital assets due to deviation from intended methodology; full or partial loss of digital assets due to the variability of an assets price; full or partial loss of digital assets due to deviation from the proposed methodology and volatility decay incurred during rebalancing; full or partial loss of digital assets due to liquidation of the position in the event of product malfunctions.