2Factor Launches On-Chain Leverage for Long-Term Investors
2factor.finance has launched on Base for Coinbase's tokenized stocks, providing long-term investors with moderate leverage that can be held indefinitely at a lower cost than traditional leveraged ETFs.
The product breaks the link between leverage and hedging costs by sourcing its leverage from investors seeking stable yield rather than those willing to take short positions.
This results in a 75% reduction in the all-in cost of holding a leveraged single-stock position, making it more accessible to long-term investors.
2factor sets leverage targets that account for volatility drag, providing Kelly-optimal multiples that compound in favor of long-term holders. Over the past decade, one dollar invested in 1.33x Bitcoin grew to approximately $506, compared to $281 for spot and only $0 for a traditional 3x position.
According to Evan Kuo, co-founder of 2factor, 'I want to own moderately leveraged Google for exactly the same reason I want to own moderately leveraged Bitcoin. I don’t know what path it will take, but I think the position will simply be worth more in five years.'