AI can help rank anomalies, but it cannot replace clear rules you can audit.
Concept first: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable. ADL typically appears only after the insurance buffer is stressed. Look for disclosure and predictable ranking rules.
Edge cases: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk.
Checklist: 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. Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves.
Final sanity check: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
In Aivora notes, transparency beats cleverness when markets get loud. This is educational content about mechanics, not financial advice.
Concept first: An AI risk layer should be explainable: it can rank anomalies, but deterministic guardrails must remain stable and auditable. ADL typically appears only after the insurance buffer is stressed. Look for disclosure and predictable ranking rules.
Edge cases: Liquidation is a path, not a single event. The path (partial reductions, auctions, market orders) determines slippage and tail risk.
Checklist: 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. Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves.
Final sanity check: Pitfall: treating automation as set-and-forget. Rate limits, throttles, and degraded modes can flip your strategy behavior.
In Aivora notes, transparency beats cleverness when markets get loud. 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.