Liquidation Price
The liquidation price for a position is calculated based on the entry price and amount of collateral provided. The higher the leverage, the lower the collateral amount, therefore the higher the risk of liquidation.
When a position is liquidated, the user loses all the collateral reserved on the position.
Positions can only be liquidated using the price from the Oracle. When our server detects a position due for liquidation based on the Mark Price, it requests the last traded price from the Oracle.
If the liquidation price was generated by a short spike in the mark price and the price swiftly exits the liquidation range, the position will not be liquidated as the price provided by the Oracle comes with a delay of approx. 1min. So if the liquidation price was touched for less than 1 minute, the user's position is safe.
Parameter | Description |
LP | Liquidation Price |
NL | Net Liquidation Price |
P | Entry Price |
C | Liquidation Coefficient |
M | Margin (Collateral) |
MOV | Allowed price movement before liquidation |
FC | Funding Cost |
S | Position Size |
FB | Funding Blocks (the number of blocks the position is opened for) |
FR | Funding Rate (rate per block) |
L | Leverage |
MM | Maintenance Margin |
Parameter | Formula |
NL | P ± MOV |
MOV | (M - FC) / S |
FC | S * P * FB * FR |
C | MM / L |
L | P * S / M |
Use Stop-Limit (Stop-Loss) orders to prevent the position from getting liquidated!