A lot of losses come from tiny assumptions: which price triggers liquidation, when funding hits, and how fees are applied.
The mechanism: Look for the platform's fallback rules: what happens if a feed is stale, if the book is thin, or if volatility spikes faster than normal sampling windows. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk.
A simple test: Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
What to do next: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
Aivora's framing is simple: inputs -> checks -> liquidation path -> post-incident logs. Build around that pipeline. This is educational content about mechanics, not financial advice.
The mechanism: Look for the platform's fallback rules: what happens if a feed is stale, if the book is thin, or if volatility spikes faster than normal sampling windows. If you see unexplained liquidations, compare index updates to mark sampling and check whether outlier filters are documented.
Where it breaks: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk.
A simple test: Treat cross margin as a correlated portfolio. Correlations converge during stress, so diversification can vanish when you need it most. Example: a temporary rate-limit tightening can cause missed exits and worse fills even without a dramatic price crash. Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak.
What to do next: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
Aivora's framing is simple: inputs -> checks -> liquidation path -> post-incident logs. Build around that pipeline. This is educational content about mechanics, not financial advice.
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.