xSOL is Hylo’s leveraged token, designed for users who want amplified exposure to SOL price movements—without the complexities of margin trading or managing a leveraged position. By simply holding xSOL, you benefit from effective leverage on SOL, with the protocol handling all the mechanics for you.

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No Liquidation, No Ongoing Costs

Unlike traditional leveraged products, xSOL does not expose holders to liquidation risk or ongoing borrowing costs. This is made possible by Hylo’s automatic rebalancing mechanism: when SOL’s price drops, the protocol automatically deleverages your position, and when SOL’s price rises, it re-leverages, ensuring your exposure is always in line with the system’s effective leverage. There are no margin calls or risk of being forcibly closed out of your position. xSOL is designed to be the perfect tool for stress-free leverage. All you need to do is buy xSOL, hold it in your wallet, and sell when your price target is reached. The protocol takes care of all rebalancing and risk management behind the scenes, so you can focus on your investment strategy without worrying about active position management.

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Fees

xSOL has minting and redemption fees that dynamically adjust based on the system’s health. When the system is operating normally (collateral ratio above 150%), fees are minimal to encourage participation. During market stress, fees adjust to incentivize actions that improve system health:
  • Minting fees decrease during stress to encourage new xSOL creation
  • Redemption fees increase during stress to discourage xSOL burns
This fee structure ensures that xSOL holders can always enter and exit positions, while the protocol maintains stability through market volatility. For detailed information about fee structures and stability mechanisms, see risk-management.

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Risk

While xSOL offers a simple and efficient way to gain leveraged exposure to SOL, it is important to understand the risk of volatility decay. Volatility decay refers to the tendency for leveraged tokens to lose value over time in volatile markets, even if SOL’s price returns to its original level. This occurs because xSOL’s value is path-dependent: large price swings, both up and down, can erode value due to the way leverage amplifies gains and losses. xSOL is best suited for users with a strong directional view on SOL and an understanding of the risks associated with holding leveraged tokens over time.