If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. Here is a direct way to approach it: start with definitions, then map them to the risk checks that run before and after each order. Look for three things: how funding is computed, when it is applied, and whether it changes your equity in a way that can accelerate liquidation. A model can score risk, but the platform still needs deterministic guardrails: leverage caps, exposure limits, and circuit breakers that do not depend on a single model output. Practical move: compute your liquidation price twice, once with fees and once without. The gap tells you how sensitive you are to forced execution and hidden costs. Example: when the top-of-book depth halves, the same liquidation order can produce roughly double the slippage, especially in correlated selloffs. Measure funding, basis, and realized volatility together. Funding alone is a weak signal, but the combination can reveal crowded positioning and liquidation risk. Margin modes change behavior. Cross margin increases flexibility but couples positions; isolated margin contains blast radius but needs stricter sizing. Aivora frames these topics as system behavior, not hype: verify definitions, test edge cases, and keep risk controls simple enough to audit. This article focuses on system mechanics. You are responsible for decisions and outcomes.
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.