Disclaimers: none of this is investment advice. HALF tokens are not being offered to US users. See our guide for more information on HALF tokens.

FTX recently launched HALF tokens–a version of Leveraged Tokens that use 50% leverage. In other words, ETHHALF is 50% ETH, 50% USD.

Of course, you could get 50% leveraged yourself even without futures by just spending half your stack on spot ETH. So what’s the point of ETHHALF?

Maybe no one will care about HALF tokens, and that’s fine!

But there is something cool about HALF tokens, and it comes from the rebalances. HALF tokens essentially allow the holder to bet on mean-reversion–an attempt to tokenize the strategy “buy low, sell high”.

Buying and holding HALF tokens allows users to gain from back and forth swings in the market, at the cost of losses if markets keep trending in one direction.

Like BULL and BEAR tokens, HALF tokens rebalance at the end of each day to return to their target leverage; a static 50/50 portfolio would no longer be 50/50 after a market move. But it turns out that their rebalances are the opposite of BULL and BEAR rebalances.

If ETH goes up, ETHHALF now has more value in its ETH holdings than its USD holdings, so it sells off some ETH; similarly if ETH goes down, it buys back some so it’s once again 50% leveraged. This means it sells after things go up and buys after things go down.

So because of their daily rebalances, HALF tokens are essentially betting on mean-reversion–they do well if large moves revert, and then do poorly if markets continue trending.

That’s the opposite of BULL/BEAR/HEDGE tokens, which do relatively well in markets with momentum, but lose to mean reversion.

We introduced HALF tokens as a complement to the BULL and BEAR tokens, so that FTX both has tokens that do well during periods of momentum, and during periods of mean reversion.

You can trade HALF tokens on FTX. You can find more information about all FTX Leveraged Tokens in our leveraged tokens guide.

Sam Bankman-Fried