If you have wondered why two platforms liquidate the same position at different prices, the answer is usually in the rules. A simple primer: contracts depend on pricing references, collateral rules, and liquidation behavior. AI adds monitoring and prioritization, not miracles. Liquidation is not a single event; it is a path. Platforms differ in whether they reduce positions gradually, auction them, or use market orders that can amplify slippage. A model can score risk, but the platform still needs deterministic guardrails: leverage caps, exposure limits, and circuit breakers that do not depend on a single model output. Measure funding, basis, and realized volatility together. Funding alone is a weak signal, but the combination can reveal crowded positioning and liquidation risk. Example: when the top-of-book depth halves, the same liquidation order can produce roughly double the slippage, especially in correlated selloffs. Treat cross margin like a portfolio: correlations matter. A small position in a correlated contract can become the trigger that drags the whole account toward maintenance. When you see liquidation clusters, think in graphs: correlated symbols, shared collateral, and forced flow can chain together quickly. Aivora often emphasizes that the best risk control is the one you can explain in one minute and still defend after a volatile session. This article focuses on system mechanics. You are responsible for decisions and outcomes.
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.