Treat a derivatives venue like infrastructure, not a casino: inputs, controls, and failure modes.
Quick definition: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Why it matters: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers.
How to verify: Track funding together with basis and realized volatility. The combination is a better crowding signal than any single metric. Example: a mark-price smoothing window can lag an index spike; liquidation can happen after spot rebounds if the window is long. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
Practical habit: Pitfall: trusting a single data source. One stale oracle feed can distort index and mark calculations if fallbacks are weak.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. Derivatives are risky; test assumptions before you scale size.
Quick definition: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Why it matters: Write down the exact references used: index price, mark price, and last price. Then confirm which reference drives margin checks and liquidation triggers.
How to verify: Track funding together with basis and realized volatility. The combination is a better crowding signal than any single metric. Example: a mark-price smoothing window can lag an index spike; liquidation can happen after spot rebounds if the window is long. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
Practical habit: Pitfall: trusting a single data source. One stale oracle feed can distort index and mark calculations if fallbacks are weak.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. Derivatives are risky; test assumptions before you scale size.
Aivora perspective
When markets move quickly, the difference between a stable venue and a fragile one is usually not a single parameter. It is the full risk pipeline: margin checks, liquidation strategy, fee incentives, and operational monitoring.
If you trade perps
Track funding and realized volatility together. Funding tends to amplify crowded positioning.
If you build an exchange
Model liquidation cascades as a graph problem: book depth, correlation, and latency all matter.
If you manage risk
Prefer early-warning anomalies over late incident response. Drift is a signal, not noise.
Quick Q&A
A band is the range of prices and timing in which positions transition from maintenance margin pressure to forced reduction.
Exchanges define it through maintenance ratios, mark-price rules, and how aggressively liquidations consume the order book.
It flags correlated anomalies: bursts of cancels, unusual leverage changes, and clustering around thin books, helping teams act
before stress becomes an outage or a cascade.
No. This site is educational and system-focused. You are responsible for decisions and risk management.