Gate.io updates Liquidation and bi-directional HoldingsMargin mechanism

2024-07-10 17:42:29 UTC+8
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In order to improve users' trading experience and reduce their risks, Gate has optimized and upgraded the triggering conditions, liquidation process, and bidirectional holdings of liquidation. The main changes are as follows:

1. The Liquidation trigger condition is no longer triggered by the mark price being inferior to the Liquidation price, but by the maintenance margin level ≤ 100%. In the cross-margin scenario, all positions share the margin, unrealized PNL is hedged and included in the total margin balance, which helps to reduce the risk of Get Liquidated for drop users.
2. When Get Liquidated is triggered, it will be liquidated in a step-by-step manner according to the risk limit level. When the margin level is maintained above 100% at any level, the system will stop the liquidation and drop the user's liquidation losses.
3. Bidirectional unrealized PNL Hedging for Holdings, with high-value Positions occupying Margin. Liquidation is triggered by maintaining a margin level ≤ 100%.

Note: Gate.io will start updating the Liquidation and bi-directional HoldingsMargin mechanism in batches from July 15th. Please note: The APP version needs to be updated to 6.9 or above, and the contract account has no Position or Maker, so the system will upgrade the new Liquidation mechanism for you in batches. Please follow the latest version release recently and update it in time. The PositionLiquidation mechanism and bi-directional HoldingsMargin in your Holdings will remain consistent with before.

1. Comparison of New and Old Liquidation Triggers:

Old: When the Margin balance of your Position falls below the maintenance Margin level, your Position will be forcibly closed, and you will lose all the Position Margin used for that Position. When the mark price reaches the Liquidation price, it will trigger a forced Close Position;
New: Risk is assessed by calculating the Maintenance Margin Ratio (MMR), where MMR = Total Margin Balance / Margin Required for User's Position. When MMR reaches 100%, it will result in reducing position or getting liquidated; Liquidation price is for reference only, actual liquidation is based on MMR.

Optimization purpose:
1. All Positions share Margin. If the Margin of a certain Position is insufficient, the unrealized PNL of other Positions can be used as Margin to avoid Get Liquidated.
2. It helps users to utilize Margin in the account more effectively, thus reducing the frequency of forced Close Position.

2. Comparison of old and new Ladder-style Liquidation:

Old: After Liquidation is triggered, all positions will be closed directly.
New: After Liquidation is triggered, the contract Position risk limit will be lowered by one level, and the account's margin level will be checked to see if it returns to 100%. If it does, Liquidation will be stopped.
When the system Close Position, the Close Position will be placed in the order of 24-hour volume from high to low in the contract market (the higher the volume of the contract market, the better the Liquidity and the easier it is to trade), and the insurance fund and ADL triggering mechanism remain unchanged.

Optimization purpose:
The step-by-step Liquidation mechanism reduces the risk of loss for users in a single market Fluctuation by gradually reducing open interest.

3. Comparison of new and old Holdings:
Old: In the full-position scenario, two Position hedging each other, unrealized PNL and Margin occupy each other.
In full position mode, high-value Positions occupy Margin, and profit and loss hedging is included in the total Margin balance. Liquidation is triggered when the maintenance Margin level is ≤100%.

Optimization purpose:
1. All Positions
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