Risk & Liquidations
How does liquidation work?
When account margin falls below maintenance, the liquidation engine attempts to close positions in the account against the order book at a protective, bankruptcy-bounded limit price.
Fills can be partial - any unclosed remainder is re-attempted on subsequent oracle updates, so if your equity recovers above maintenance the position stays open.
If the book can’t absorb the position, the account’s positions and margin will be wholly taken over by the backstop liquidity layer with any deficits covered by the insurance fund, and - only as a last resort - auto-deleveraging (ADL) will be used to offset positions against opposite-side positions held by other traders.