SunPerp Auto-Deleveraging (ADL)
Auto-Deleveraging (ADL) is a counterparty forced liquidation mechanism implemented when extreme market conditions or force majeure events cause insufficient or rapidly declining risk reserves. Currently, "rapidly declining" refers to a straight-line drop in risk reserves from their peak by a certain threshold within 1, 2, 4, or 8 hours. The specific threshold value varies slightly for each trading pair. The platform may adjust these thresholds based on market conditions to ensure the protection of users' rights and interests.
How ADL Works
Once ADL is triggered, the platform will no longer process users' forced liquidation or reduction positions by placing orders on the market and waiting for matching at suitable prices. Instead, it will directly identify the top-ranked counterparty accounts and execute trades with them. After the trade, the relevant contract positions of the counterparty accounts are reduced, and the position profits are converted into account balances.
Important: The execution price may fall outside the market trading price range. Therefore, we strongly advise users to consistently monitor the priority level displayed by the "Auto-Deleveraging" indicator to avoid counterparty liquidation events.
ADL Ranking System
The ranking of ADL counterparties is determined based on account risk or position risk, combined with the rate of return of the contract position. The specific rules are as follows:
Cross Margin
According to the above rules, accounts with higher rates of return and lower position margin rates are more likely to be selected as ADL counterparties and face auto-deleveraging risks.
ADL Risk Indicator
Users can monitor their auto-deleveraging risk in real time using the indicator on the page. The indicator has five levels:
High Risk (5 levels lit)
Position is ranked high among counterparties, indicating a higher risk of auto-deleveraging.
Low Risk (1 level lit)
Position is ranked lower among counterparties, indicating a lower risk of auto-deleveraging.
ADL Notifications
If a user is auto-deleveraged, they will receive comprehensive notifications:
- •SMS and email notifications detailing the reduced position and the execution price
- •Order Center records where users can review the corresponding reduction order
- •Order type classification listed as "Auto-Deleveraging" for easy identification
Best Practices
- •Monitor your ADL indicator regularly, especially during volatile market conditions
- •Consider reducing position size or taking profits when ADL risk is high
- •Maintain adequate margin to avoid being ranked high in the ADL queue
- •Stay informed about market conditions that may trigger ADL events