Why maximum leverage is a fee, not a feature

Exchanges advertise leverage the way carriers advertise data speeds, as a capability offered for your benefit. The arithmetic says something else. A venue earns on notional, so the slider that multiplies your position multiplies its revenue identically while collapsing your survival odds, and the deleveraging queue ranks you first for forced closure because the venue knows exactly which accounts are fragile. Summary Trading fees are charged on notional value, meaning the size of the position, not the collateral behind it, so a 50-times position generates 50 times the fee revenue from the same deposit. The trader’s outcome moves in the opposite direction: at 10 times leverage, roughly a 10% adverse move eliminates the position; at 50 times, roughly 2% does, and 2% moves occur in crypto several times a day. Funding payments in perpetual futures also apply to notional and not margin, so leverage multiplies the recurring holding cost identically. Auto-deleveraging queues rank candidates for forced closure by unrealised profit and effective leverage, which means high leverage raises your position in the queue even when you are winning. Every element of that structure is disclosed in exc...