Why We Built Mooncake — a Leveraged Token Market RateX is currently the leading yield trading protocol on Solana. What we’ve been doing is actually quite simple: making yield tradable. Through yield tokenization, we separate the future yield embedded in yield-bearing assets so that the market can freely price and trade it. By introducing margin trading, we’ve also greatly improved market liquidity and trading efficiency for yield assets. But to be honest, not many people really care about that. Most users come to RateX and just see it as an airdrop hub. Still, to us, the concept of yield splitting itself is fascinating. It’s a way to make risk abstract and tradable. A Yield Token (YT), at its core, is the tokenized form of a leveraged carry trade on yield-bearing assets. It allows anyone to express a view on future yield simply by trading a token, without the need to borrow or lever up manually. Earlier this year, we started asking ourselves a question: If yield splitting can isolate yield risk, could it also split price volatility? We wanted to bring this technology to a broader group of users, not just the small circle who understand yield. So we decided to build something new: Mooncake. Mooncake extracts price volatility from any asset and wraps it into a leveraged token. Through its rebalance mechanism, it automatically maintains target leverage, achieving liquidation-free leverage. This design has one major advantage: it dramatically lowers the barrier to leverage long-tail assets. In traditional DeFi, it’s almost impossible to gain leverage on small-cap tokens. Lending protocols simply don’t support such volatile assets because liquidations are difficult to execute and often lead to bad debt. Mooncake takes a different approach. There is no lending, no collateral, and no liquidation. Through automatic rebalancing, the system adjusts exposure dynamically, reducing risk when prices fall and compounding returns when prices rise. The entire process is clean, transparent, and liquidation-free. Unlike traditional leverage, it doesn’t create additional sell pressure during market downturns. For users, leveraged tokens are an intuitive and lightweight tool. They trade like spot assets but come with fixed leverage. There is no need for monitoring or margin calls. If you want short-term amplified exposure, play trends, this tool is perfect for that. It makes leverage as easy as buying a token. For RateX, Mooncake is more than just another product. It marks a key step in building the on-chain structured finance layer. With Mooncake, our product line expands beyond yield-bearing assets into a wider range of categories, from low-risk yield assets to tokenized equities and high-volatility meme coins. All of them benefit from a universal leveraged token design that enables a more efficient and open market. As for the name “Mooncake,” there is a story behind it. A mooncake is a traditional Chinese pastry that has been around for thousands of years. It symbolizes reunion and togetherness during the Mid-Autumn Festival. Structurally, it is simple but elegant. A soft outer crust wrapping around a rich, flavorful filling (I personally like the salted egg yolk one). If you think of the underlying token as the whole mooncake, then the leveraged token is the filling, concentrated, flavorful, the essence of it. The funding token is the crust, steady, supportive, and holding the structure together. We love this metaphor because it captures both the logic and the warmth behind what we are building. Finance does not have to be cold. It can have layers, flavor, and even a story, just like a mooncake. Finally, we want to thank all the friends and partners who supported us along the way, from Solana Foundation, Pantera, Meteora, Bonk, Trends, Primitive Ventures, and all our investors who offered feedback and confidence during the building process. Mooncake may sound cute, but the logic behind it is solid and hard-core. We want to make complex financial structures simple, transparent, and on-chain, so that everyone can express their view of the future in the lightest and most direct way possible.