Risk Thresholds & Liquidations
Understanding how the platform protects its capital while allowing you to trade with amplification.
Overview
The platform implements liquidation thresholds to protect its capital while users amplify trades. These thresholds determine how much price movement a position can sustain before automatic closure.
How Thresholds Work
Setting the Threshold
- Liquidation thresholds are established when trades open
- The threshold directly correlates with the amplification amount applied
Amplification Impact
| Amplification | Price Buffer | Liquidation Risk |
|---|---|---|
| Lower (2x-3x) | Broader price swings allowed | Lower |
| Higher (8x-10x) | Tighter limits enforced | Higher |
Continuous Monitoring
Price monitoring occurs continuously in real-time to ensure positions are managed effectively.
User Transparency
The platform ensures you always know your risk:
- Defined before trade opens - You know the liquidation threshold upfront
- Clearly visible - The threshold is displayed throughout your trade
- No surprises - The rules are set and communicated before you commit
Liquidation Mechanics
When a position reaches its threshold:
- The system automatically closes the position
- Platform capital is recovered first
- User loses their initial stake
Over-Threshold Protection
If the closure happens beyond the predetermined threshold (due to rapid price movement), the Amplified pool absorbs any resulting losses rather than charging traders additional fees.
Core Principle
"Amplifying your trade increases your gains"
But risk management safeguards ensure platform sustainability through structured liquidation parameters tied to amplification levels. Higher amplification means higher potential returns but also tighter risk controls.