Risk Disclosure Statement — Bybit Leveraged Tokens
Please read this risk disclosure statement carefully, in which Bybit will describe both the relevant and specific risks of Leveraged Tokens. As this risk disclosure statement is not exhaustive, please first make sure to read the terms and conditions of the Bybit platform. After you fully understand the risks involved, Bybit will provide services related to Leveraged Tokens.
You should always carefully consider whether Bybit Leveraged Tokens match your risk tolerance, investment objectives and experience, financial situation and needs, personal circumstances, and other relevant circumstances.
You should fully understand and be aware of investment risks, especially the following:
A. Bybit Leveraged Tokens are risky investments.
Leveraged Tokens trading are a risky investment. Although Bybit Leveraged Tokens generally have lower risks and costs than derivatives and other Leveraged Tokens (issued and managed by institutions other than Bybit), they are not risk-free investments. As a trader, you acknowledge and agree that you will access and use Bybit Leveraged Tokens at your own risk. You should fully understand the risks associated with Bybit Leveraged Tokens and are solely responsible for all trading and non-trading actions on your account. Do not trade or invest beyond your financial means.
B. Bybit Leveraged Tokens are not long-term investments.
Investors with long-term investments or intention to hold Leveraged Tokens do so at their own risk. Due to inherent market risks, fees, slippage, rebalancing algorithms and any unknown risks associated with Bybit Leveraged Tokens, Bybit Leveraged Tokens may become zero (0) in value and cannot be recovered.
C. Bybit Leveraged Tokens are only rebalanced when needed
The investment portfolio behind Bybit Leveraged Token products will be adjusted, so that the combined leverage multiple and the targeted multiple will not deviate too much. The Leveraged Token rebalancing mechanism refers to the intraday Leveraged Token anchoring target when the leverage exceeds a certain range and temporarily adjusts the position. After the position adjustment, the leverage of the Leveraged Token will return to the target leverage multiple.
D. Commissions, Fees and Charges related to Bybit Leveraged Tokens
Before investing in or trading Bybit Leveraged Tokens, you should clearly understand all commissions, fees and other charges that you will be responsible for. These fees will affect your expected earnings.
i. Trading fee: Trading fees are charged when buying and selling tokens on the spot market, and the fees are the same as spot transactions.
ii. Purchase fee: When users choose to purchase tokens, they need to pay a subscription fee.
iii. Redemption fee: When the user chooses to redeem the token, they need to pay a redemption fee.
iv. Management fee: Management fee is charged every day, and it is directly included in the net asset value.
Bybit reserves the right to modify or change the above fees at any time and at its sole discretion. Any updated administration fees will be covered at the time of the transaction, and will be implemented from the corresponding effective date. You authorize Bybit to debit your account for any applicable fees for any amount owed by you in accordance with these Terms.
E. Liquidity and Pricing Risks Associated with Bybit Leveraged Tokens
Due to the centralized creation and market liquidity of Bybit Leveraged Tokens, Bybit strives to provide sufficient market liquidity to ensure Bybit Leveraged Tokens are within a reasonable price range. Bybit will take reasonable measures, including but not limited to capital injection, creating more tokens and selling tokens in the secondary market, to minimize the above risks.
Users can redeem tokens at any time except during the position adjustment period. Redemption is usually more expensive than selling tokens on the spot market. This is not recommended during normal trading hours.