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:

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