Liquidation Price

The price when the position is liquidated.

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.

Liquidation Price Formula

LP=NL±PCLP = NL ± P * C

Definitions

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

Formulas

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!