Liquidation
Liquidation Mechanism
Trigger Condition: When (collateral - losses - fees) falls below threshold
Threshold Levels:
Non-synthetic markets: 0.4% - 1% of position size
Synthetic markets: Higher thresholds for safety
Newly listed markets: 0.45%+ for volatility
Price Calculation: Based on oracle price, not including price impact
Actual Liquidation: Applies real positive/negative price impact when closing
Liquidation Fees
Fee Structure:
0.2% for fully backed markets
0.3% for synthetic markets
0.45% for high volatility/new markets
Fee Deduction: Taken from remaining collateral
Remaining Collateral: Returned to account after fees
Prevention Strategies
Monitor Liquidation Price:
Check regularly, especially with >10x leverage
Consider borrow and funding fee accumulation
Liquidation price is dynamic, not static
Add Collateral: Use "Edit" button to deposit and reduce risk
Reduce Leverage: Partially close position to increase safety margin
Set Stop Loss: Automatic closure before liquidation
Balanced Positions: Avoid max leverage in volatile markets
Auto-Deleveraging (ADL)
Applies To: Synthetic markets only
Trigger: When pending profits exceed pool threshold
Process:
Most profitable positions deleveraged first
Partial or full automatic closure
Ensures market solvency
All profits payable at closure
Prevention: Occurs in extreme market moves, rare in fully backed markets
Notification: Interface shows ADL risk levels
Risk Indicators
Liquidation Distance: Percentage from current to liquidation price
Health Factor: Position safety metric (green/yellow/red)
Fee Accumulation: Real-time borrow and funding cost display
Pool Utilization: Higher utilization = higher risk of ADL (synthetic markets)
Volatility Alerts: Warnings during high volatility periods
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