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What is the liquidation process of MoonXBT USDT perpetual contracts?

MoonXBT USDT perpetual contracts are highly leveraged. To keep positions open, traders must hold a percentage of the position value on the exchange, known as the Maintenance Margin percentage.

If you cannot fulfill your maintenance requirement, your position liquidates, and you lose your maintenance margin.

MoonXBT employs a partial liquidation process involving automatic reduction of maintenance margin to avoid a complete liquidation of a trader’s position.

Users on the lowest risk limit tiers:

MoonXBT cancels any open orders in the contract.

If this does not satisfy the maintenance margin requirement, the liquidation engine will liquidate the position at the bankruptcy price.

Users on higher risk limit tiers:

The liquidation system attempts to bring a user down to a lower risk limit and thus lower margin requirements by:

  1. Attempting to bring a user down to a risk limit associated with their open orders and current position.

  2. Cancelling open orders and then attempting to bring a user down to a risk limit associated with their current position.

  3. Submitting a FillOrKill order of the difference between the current risk limit position size and the position size to satisfy the margin requirement to avoid liquidation.

  4. If the position is still in liquidation, the liquidation engine takes over the entire position and places a limit order to close the position at the bankruptcy price.

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