In order to provide a better service, MXC refers to the common practices of the industry and launched a tiered liquidation function in the margin trading zone to help users reduce the risk of being liquidated.
This launch is a trial run, the platform will continue to optimize based on user suggestions and feedback during the trail run period. If you have any questions during use, you can fill out the suggestion feedback form or contact online customer service at any time. Welcome to experience!
Note: Users who have leveraged loans before this function goes live will maintain the original liquidation process; when the user's loans are fully returned and the leveraged loan transaction is performed again, the system will adopt a tiered liquidation process.
The details are as follows:
1. Function Introduction
The Tiered Liquidation, that is, according to the user's loan amount, automatically adapt to different loan tiers, corresponding to different liquidation tiers and effective leverage multiples.
2. Function Parameters
The system configures different parameters for different trading pairs. Taking 10 times leverage as an example, the configured parameters are as follows:
3. Loan amount and Corresponding Tiers
a. The larger the user loan amount, the higher the corresponding leverage tier, the lower the effective leverage, and the higher the liquidation risk rate;
b. The smaller the user loan amount, the lower the corresponding leverage tier, the higher the effective leverage, and the lower the liquidation risk rate.
Note: The current isolated margin does not support cross-currency lending.
Taking the BTC/USDT trading pair as an example, the corresponding relationship between the loan amount and the leverage tier is as follows:
Note: The above parameters are for reference only. For details of specific trading pairs, please refer to the isolated margin leverage tier information table.
4. Tiered Liquidation
For trading pairs that have the function of tiered liquidation, users’ position will be liquidated partially to match next tiered leverage if it was under liquidation risk.
When the liquidation is triggered, the system will automatically the system will automatically calculate the amount for current tiered liquidation and reduce the position size to match the next tier and automatically place a liquidation order. After the user is successfully liquidated, the loan is returned, the loan amount is reduced, the corresponding tier is down, the effective leverage multiple supported increases, and the corresponding liquidation risk rate is down. At this time, if the risk rate of the user account is higher than the liquidation risk rate, the operation of position reducing will be stopped;
If the risk rate is still higher than the liquidation risk rate, the operation of position reducing will continue until the until the risk rate meets the required level.
For example, suppose a user borrows 600,000 USDT in BTCUSDT Isolated Margin account. The effective leverage rate is 7.41X, and the corresponding liquidation risk ratio is 1.083.
Due to market fluctuations, the price of BTC falls, and the user risk rate is now below 1.083, with the tiered liquidation being triggered to repay a debt of 150,000 USDT. The position drops to tier 3, with the effective leverage now 8.09, and the corresponding liquidation risk rate now at 1.072;
If the BTC price continues to fall with the risk ratio still below 1.072, the system will continue a gradual liquidation to repay the debt of 150,000 USDT.
By the time the market is stabilized, the user has gone through two rounds of tiered liquidation, and the debt has now become 300,000 USDT. The position is at tier 2 and the effective leverage is 8.93X. Upon recalculation, the risk ratio is 1.061.
5. How to use the tiered liquidation ？
1） Entrance: Log in [Official Website] - [Margin] - [Apply to borrow]
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