The X2 protocol provides the simplest way for anyone to obtain on-chain leverage.. BULL and BEAR tokens of any asset can be bought with zero spread and zero slippage using a simple swap interface.

The protocol is fully decentralised while remaining front-running resistant. It achieves this by ensuring that profits can only be made on a position 10 minutes after opening the position or 10 minutes after increasing the position.

Basic Example

  1. The price of ETH/USD is 5000

  2. Alice mints 20 10X BULL ETH/USD tokens for 20 ETH

  3. Bob mints 20 10X BEAR ETH/USD tokens for 20 ETH

  4. The price of ETH/USD increases by 1% to 5050

  5. Alice would have 20 10X BULL ETH/USD tokens and a pending profit of 2 10X BULL ETH/USD tokens

  6. Bob would now have 18 10X BEAR ETH/USD tokens

In this example, Bob's tokens decreased while Alice's tokens have not yet decreased. This is because of the front-running protection previously mentioned.

Profit Example

  1. Continuing on the previous example, if after 10 minutes, the price of ETH/USD remains at 5050

  2. Alice would now have 22 10X BULL ETH/USD tokens

  3. Bob would still have 18 10X BEAR ETH/USD tokens

It is important to note that if Alice buys 1 more BULL at this point, Alice would now have 21 10X BULL ETH/USD tokens and a pending profit of 2 10X BULL ETH/USD tokens. She will have to wait another 10 minutes to have 23 10X BULL ETH/USD tokens.


Every BULL / BEAR token can be redeemed at a 1:1 ratio for ETH.

Leverage Decay

Similar to FTX's leveraged tokens, gains and losses are compounded. If you buy 20 10X BULL tokens and the price increases by 1%, your profit would be +10%. If the price increases by another 1% your profit would be +21%. The opposite would happen for losses where a sequence of two 1% decreases would lead to a loss of 21%.

Another case to consider would be if the price moves 1% in favour of your position and 1% against your position. On the first move your profit would be +10% and your position size would now be 110% of your initial capital. On the second move your loss would be 11% because of the increase in your position's size.

Due to this, BULL and BEAR tokens are more suitable for short term trades or for traders who take profits more frequently.

Target and Actual Leverage

While the tokens have a target leverage, profits and losses are capped to the liquidity of the smaller side. For example, if there is a total of 100 10X BULL tokens and 80 10X BEAR tokens, then profits and losses of BULL tokens will follow an 8X leverage while profits and losses of BEAR tokens will continue to follow a 10X leverage.

These leverages are indicated on the X2 trading interface.

Funding Rates

To help keep positions balanced, a funding rate is applied every hour to BULL and BEAR positions. BULLs pay BEARs when there are more BULLs and BEARs pay BULLs when there are more BEARs. The hourly funding rate is calculated as:

[max(BULLs,BEARs)min(BULLs,BEARs)]/5000[max(BULLs, BEARs) - min(BULLs, BEARs)] / 5000

For example, if there are 10 BULLs and 5 BEARs, then every hour the total size of all BULLs is reduced by 5/5000 ETH while the total size of all BEARs is increased by 5/5000 ETH. The increase and decrease is proportionally shared among all token holders, in this example, it would mean that the size of a BULL position would decrease by 0.01% every hour, while a BEAR position would increase by 0.02% every hour.

Settlement in ETH

Since the collateral for the system is in ETH, there is a constant exposure to the price of ETH. This is useful if you want to maintain exposure to ETH's price. For example, you can take a short or long position on BTC, even if the price moves against your position, if the price of ETH increases you could still be in profit relative to USD.


A 0.2% fee is applied when buying and selling BULL and BEAR tokens. This fee is distributed to XVIX stakers.

Price Feed

X2 integrates Chainlink for reliable price feed data.


BULL and BEAR tokens are regular ERC-20 tokens so they can be easily stored in wallets or transferred to different addresses as needed. The changes in balances are achieved through rebases similar to AMPL.


There are no liquidations for BULL / BEAR tokens, on a large price movement, the maximum loss is 90% of the current position size. If the price moves continuously against a trader's position then their amount of BULL / BEAR tokens will tend slowly toward zero.

Useful Links