# Liquidations (/docs/risex/trading/liquidations)

## Overview

RISEx uses a three-stage liquidation process designed to protect traders while maintaining exchange solvency. The system prioritizes partial liquidations, giving you the best chance to stay in the market.

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## Stage 1: Partial Liquidation

**Trigger**: Margin Balance \< Maintenance Margin

When your margin balance falls below the maintenance margin requirement, partial liquidation begins:

* Positions are liquidated directly onto the orderbook
* Only enough is liquidated to restore your account to Initial Margin
* A 1% liquidation fee is charged on liquidated positions
* You keep your remaining positions and collateral

This stage handles the vast majority of liquidations, minimizing impact on traders.

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## Stage 2: RLP Takeover

**Trigger**: Margin Balance \< ⅔ × Maintenance Margin

If your account health deteriorates further, the RLP (Retail Liquidity Provider) vault steps in:

* RLP closes all remaining positions
* RLP takes over all account collateral
* The position risk transfers to professional market makers

The RLP vault acts as the exchange's insurance mechanism, absorbing positions that can't be cleanly liquidated on the book.

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## Stage 3: Auto-Deleveraging (ADL)

**Trigger**: Extreme market conditions where RLP cannot absorb positions

As a last resort, ADL matches liquidated positions against profitable traders on the opposite side:

* Traders are selected based on profit and leverage
* Positions are closed at the mark price
* No slippage for the liquidated trader

ADL is rare and only occurs during extreme volatility when normal liquidation mechanisms are exhausted.

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## No Socialized Losses

RISEx does not socialize losses across traders. The three-stage system ensures:

* Individual liquidations are contained
* The RLP vault absorbs tail risk
* ADL only affects profitable counter-positions as a last resort

This design keeps the exchange solvent without penalizing uninvolved traders.

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## Health Monitoring

Monitor your account health to avoid liquidation:

| Metric               | Formula                             |
| -------------------- | ----------------------------------- |
| **Health Factor**    | Margin Balance / Maintenance Margin |
| **Safe**             | Health Factor > 1                   |
| **Liquidation Zone** | Health Factor ≤ 1                   |

The trading interface displays your health factor in realtime. Consider reducing positions or adding margin when health approaches 1.