In the crypto space, leverage tokens refers to the list of tokens that give traders a leveraged position in trading. This simply means that earnings and losses are multiplied.
For instance, ERC-20 is a leverage token that allows holders to trade without completely understand the liquidation risk. However, trading leverage token comes with risk and show be traded carefully.
Leverage token manages risks by automatically reinvesting the profit and selling more of them when the price drops. ERC-20 tokens can also be withdrawn anytime.