Auto-Deleveraging (ADL) Liquidation is a mechanism used to handle the liquidation of positions when there is insufficient liquidity to fulfill all liquidation orders. It is applied in the context of leveraged trading, where traders borrow funds to amplify trading positions. ...Read more
Shiraverse Latest Questions
ADL is activated under the following conditions on Flipster:Insurance Fund is Depleted: When the insurance fund balance is $0. Backstop Liquidity Provider cannot take positions: When the backstop liquidity provider is unable to absorb the liquidated positions.Activation Condition Example:Trader A ...Read more
Calculation formulas:Margin:Position Margin = Margin Balance input in the order zone.Position Size:Position Margin = Quantity x Opening Price / Leverage.
Backstop Liquidity Providers (BLPs) are agents incentivized to manage liquidated positions. They help ensure the resilience and stability of financial markets by safeguarding against severe disruptions and promoting orderly trading.
The process involves the following steps:BLPs Take Over Liquidated Positions:If liquidation is triggered, all open orders are immediately canceled. The liquidation engine takes over the user’s entire position. These positions are closed against BLPs at the bankruptcy price plus half of the ...Read more
If the insurance fund is depleted and cannot cover the incentive to BLPs, Flipster will trigger an Auto Deleveraging Liquidation event. This event automatically deleverages opposing trader positions based on their profit and leverage priority to cover the position of ...Read more
Margin trading allows traders to borrow funds to increase their buying power and open larger positions than their initial capital would allow. It involves using leverage to amplify potential gains (or losses) by using borrowed funds.
Leverage is a ratio that indicates the amount of borrowed funds used to open a position. For example, 10x leverage means that for every 1 unit of capital, the trader can open a position worth 10 units.
Let’s assume a trader purchases a 0.1 BTCUSDT perpetual swap contract at the market price of 30,000 USDT with 10x leverage in a long position.Notional Value: 30,000 USDT * 0.1 BTC = 3,000 USDT Initial Margin: 3,000 USDT * 10% (leverage ...Read more
If the price increases from 30,000 USDT to 36,000 USDT:Unrealized P&L: 0.1 BTC * (36,000 – 30,000) USDT = 600 USDT Remaining Margin: Initial Margin + Unrealized P&L = 300 USDT + 600 USDT = 900 USDTDespite the perpetual swap price ...Read more
If the price of BTCUSDT increases, it means the value of Bitcoin rises, which can lead to greater profits for holders, attract more investors, and potentially drive up the prices of other cryptocurrencies as well. It can also create more trading opportunities and increase media attention on the markRead more
If the price of BTCUSDT increases, it means the value of Bitcoin rises, which can lead to greater profits for holders, attract more investors, and potentially drive up the prices of other cryptocurrencies as well. It can also create more trading opportunities and increase media attention on the market.
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