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

$$LP = NL ± P * C$$

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!