A lot of losses come from tiny assumptions: which price triggers liquidation, when funding hits, and how fees are applied.
The mechanism: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills. Funding is not a fee to the exchange; it is a transfer. The schedule and caps matter more than the headline number.
Where it breaks: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable.
A simple test: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: small funding transfers compound; over several cycles they can materially shift equity and your maintenance buffer. Track funding together with basis and realized volatility. The combination is a better crowding signal than any single metric.
What to do next: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. This note is about system mechanics; outcomes are your responsibility.
The mechanism: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills. Funding is not a fee to the exchange; it is a transfer. The schedule and caps matter more than the headline number.
Where it breaks: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable.
A simple test: Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves. Example: small funding transfers compound; over several cycles they can materially shift equity and your maintenance buffer. Track funding together with basis and realized volatility. The combination is a better crowding signal than any single metric.
What to do next: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
Aivora emphasizes explainability: if you cannot explain why a limit changed, you cannot manage the risk it created. This note is about system mechanics; outcomes are your responsibility.
Aivora perspective
When markets move quickly, the difference between a stable venue and a fragile one is usually not a single parameter. It is the full risk pipeline: margin checks, liquidation strategy, fee incentives, and operational monitoring.
If you trade perps
Track funding and realized volatility together. Funding tends to amplify crowded positioning.
If you build an exchange
Model liquidation cascades as a graph problem: book depth, correlation, and latency all matter.
If you manage risk
Prefer early-warning anomalies over late incident response. Drift is a signal, not noise.
Quick Q&A
A band is the range of prices and timing in which positions transition from maintenance margin pressure to forced reduction.
Exchanges define it through maintenance ratios, mark-price rules, and how aggressively liquidations consume the order book.
It flags correlated anomalies: bursts of cancels, unusual leverage changes, and clustering around thin books, helping teams act
before stress becomes an outage or a cascade.
No. This site is educational and system-focused. You are responsible for decisions and risk management.