Liquidation
The line
A position is liquidated when its equity falls to 10% of its margin.
Equity = margin + PnL − funding so far.
At 2x that is a 45% move against you at open: a 45% drop for a long, a 45% pump for a short. Funding moves the line closer to your entry by 0.05% of the entry price every hour.
Both prices must agree
A position can only be liquidated when it is past the line at both the live pool price and the 1-minute average price. One wick in the pool is not enough, and neither is a slow drift that the live price has already reversed.
Who liquidates, where the margin goes
Anyone can liquidate a position that is past the line.
| Who | Gets |
|---|---|
| Whoever liquidates | 0.5% of the margin |
| The vault | the rest of the margin |
| You | the small account deposit (rent) back |
A liquidation takes the whole margin. The equity left at the line is not returned.
No opens close to the line
An open is refused if it would start with equity under twice its liquidation line, or while the live price is more than 25% from the average. A position cannot start out already liquidatable.
Dead pool
If a pool is closed or drained and no valid price has existed for 0.5 h, positions cannot be priced normally. You can then close at the last valid price. You get back the lower of your margin and your equity at that price, with no close fee. On this path a winner gets at most its margin back.
Worked example: 1 SOL long
Deposit 1 SOL, entry price 100.
| Item | Value |
|---|---|
| Open fee | 0.02 SOL |
| Margin | 0.98 SOL |
| Size | 1.96 SOL |
| Line (10% of margin) | 0.098 SOL of equity |
| Funding per hour (0.05% of size) | 0.00098 SOL |
| Held | Funding so far | Move to liquidation | Liquidation price |
|---|---|---|---|
| 0 h | 0 | 45.0% | 55.0 |
| 24 h | 0.02352 | 43.8% | 56.2 |
| 72 h | 0.07056 | 41.4% | 58.6 |
| 7 days | 0.16464 | 36.6% | 63.4 |
Move to liquidation = (margin − line − funding) / size. At open: (0.98 − 0.098) / 1.96 = 45%.
At liquidation, whoever liquidates gets 0.0049 SOL and the vault gets 0.9751 SOL. A 1 SOL short is the mirror: liquidation at 145.0 at open.
Holding costs are on Fees. What happens at 7 days is on Expiry and wind-down.