xSOL is an automatically leveraged token created within the Hylo protocol on Solana for users seeking enhanced returns on SOL price growth without the risk of liquidation or the need to manage their positions. Its price and effective leverage are dynamically calculated by the protocol based on the ratio of the collateral pool value to the supply of hyUSD, allowing xSOL to absorb SOL volatility to ensure hyUSD stability.

The protocol automatically rebalances xSOL positions when SOL price changes, eliminating the risk of liquidation for holders but subjecting the token to volatility decay — loss of value in volatile markets even when the SOL price returns to its original level — due to the path-dependency of its value.