👥 Auto deleverage liquidation

Full Auto Deleverage Liquidation guide on ebi.xzy

Auto-Deleveraging (ADL) is a critical process on ebi.xyz, and it's activated when the Insurance Fund is insufficient to cover the losses of bankrupt positions. Here's a step-by-step breakdown of how ADL operates, including the formulas used to calculate liquidation priority:

Step-by-Step Guide to ADL on ebi.xyz:

1. ADL Activation 🚨: If a trader's position becomes bankrupt and the Insurance Fund cannot cover it, ADL is triggered.

2. Immediate Notification 📢: Affected traders receive an instant notification alerting them to the ADL event.

3. Start computation on ASL queue position 📊: A trader's position in the ADL queue is determined by their profit and leverage ratio.

   The 'LeveragePnL' formula is used to determine the priority in the ADL queue, with the position calculated as follows:

   • PnL Percent: = max(0, Unrealised Profit) / max(1, Wallet Balance)

   • Margin Ratio: = (If total equity > 0, Maintenance Margin / Total Equity, otherwise, 0)

   • Leverage PnL: = PnL Percent × Margin Ratio

   • The position in the queue is then assigned based on the 'LeveragePnL' value, with higher values indicating a higher queue position.

4. Execution of ADL ⚙️: Those with higher LeveragePnL are up first for ADL. When it's a trader's turn in the ADL queue, their position is liquidated at the bankruptcy price of the initial liquidated order.

5. Post-Liquidation Details ⛑️: After a position is auto-deleveraged, detailed information regarding the liquidation, including the amount and price, is provided to the affected trader.

6. Market Re-entry 🔄: Following ADL, traders have the opportunity to re-assess the market and can choose to re-enter trading if they decide to do so.