If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. A simple primer: contracts depend on pricing references, collateral rules, and liquidation behavior. AI adds monitoring and prioritization, not miracles. Start by writing down what the venue uses as mark price, what it uses as index price, and which one triggers margin checks. If those definitions are missing, your risk is already higher. Liquidation is not a single event; it is a path. Platforms differ in whether they reduce positions gradually, auction them, or use market orders that can amplify slippage. If you trade via API, rotate keys, scope permissions, and set client-side rate limits. Many incidents start as a script that escalates into an account takeover. Example: a funding rate of 0.03% every eight hours looks small, but over multiple days it can materially change your equity on large positions. When slippage rises, reduce order size before you reduce leverage. Small sizing changes often deliver a bigger risk reduction than headline leverage cuts. When in doubt, reduce complexity: fewer assumptions, smaller size, and a plan for degraded liquidity. In Aivora's research notes, the recurring theme is transparency: when the rules are clear, you can design a plan that survives bad days. 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.