ADL and the insurance fund
Auto-Deleveraging (ADL) is used when liquidation losses cannot be fully absorbed through normal liquidation execution and the insurance fund. When ADL is activated, profitable positions on the opposite side of the market may be reduced according to the platform’s ranking rules.Trigger flow
- A position enters liquidation.
- The liquidation loss exceeds the amount that can be absorbed by the insurance fund.
- ADL is activated.
- Opposing profitable positions are selected according to ADL ranking.
- Open orders for selected accounts may be cancelled before the reduction is executed.