Liquidations

Liquidation is what happens when a position can no longer cover the loss it may still take. On Intention it is a protocol action, not a keeper transaction — the network itself closes the position, in the same block execution as everything else. There is no race to trigger it and no gas auction to win. Two things are worth understanding before the mechanics: what gets liquidated, and when the check runs.

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Risk units, not accounts

Liquidation does not evaluate your account. It evaluates a risk unit — a group of positions that share collateral and therefore rise or fall together. The consequence people miss: liquidating one unit does not touch another. An isolated BTC position can be liquidated while your cross account, holding ETH and SOL, is untouched — and the reverse. Isolation is real, in both directions.

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The margin ratio

Health is expressed as a maintenance margin ratio — how much of your available margin the maintenance requirement is currently consuming. $$\text{ratio} = \frac{\text{maintenance margin}}{\text{net collateral}}$$ Net collateral is your balance plus unrealized P&L, less what is reserved. Maintenance margin is the sum computed per position from its tier — see Leverage. The boundary is worth stating exactly, because it is easy to assume otherwise: liquidation requires net collateral to fall strictly below the maintenance requirement. Equal is not liquidated.

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A worked example

One account, two risk units, at a maintenance rate of 0.50%. Cross positions share collateral and are evaluated together; each isolated position is evaluated on its own. Neither unit is close to liquidation, but they are not equally safe, and the account has no single ratio. The isolated position is three and a half times nearer its threshold, and adding collateral to the account does not help it — isolated margin is assigned at open and only adding margin to that position changes its ratio. That is the practical difference between the two modes. Cross pools your collateral, so a gain anywhere offsets a loss elsewhere. Isolated confines both directions. Maintenance requirements are tiered by position size. A larger position is harder to unwind without moving the market, so it carries a proportionally higher requirement and a lower maximum leverage. The tier table for each market is published in its contract specification.

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When the check runs

Rather than scanning every account every block, the protocol checks what could have changed:

• On every mark price update — a full scan, since a price move can put any position at risk
• On every block — accounts whose balance or positions changed since the last check: deposits, withdrawals, transfers, fills, and funding
• At funding settlement — every account that was charged

A fill does not force a same-block rescan of the account that traded, because margin was already checked before that order was allowed to match. The check is placed where new information appears, not everywhere.

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The sequence

When a risk unit crosses the threshold, the protocol works through a fixed sequence, stopping as soon as the unit is healthy again. Cancel first. Open orders reserve margin. Cancelling them returns that capacity, and for an account that is marginal rather than insolvent this alone is often enough. Scope follows the risk unit: an isolated position cancels orders for that market and side; a cross account cancels everything. Then net off. If the account holds both a long and a short in the same market under cross margin, those positions are netted against each other — the smaller side against the larger. Both legs pay taker fees, and both appear separately in trade history so that fees and realized P&L are attributable per leg. Then take over. If the unit is still short, the protocol closes the position against the order book, bounded by the bankruptcy price — the price at which the position’s remaining margin is exactly exhausted. Then the insurance fund, which is protocol state funded by liquidation penalties, absorbs whatever the book could not. Then auto-deleveraging, the last resort, if the fund cannot cover it either.

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Reducing your odds

• Watch the ratio, not the price. Distance to liquidation is a function of margin, not of how far price has moved.
• Watch the ratio yourself. Nothing warns you and nothing stops you adding risk on the way up, so the margin you keep in reserve is the only buffer there is.
• Understand which unit is at risk. In mixed mode, the ratio that matters is the one for the unit holding the position you are worried about.
• Size for the tier. Crossing into a higher tier raises your maintenance requirement, which moves your liquidation price against you even if nothing else changed.

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Reading the live values

Every figure on this page is on-chain per-market configuration, not a constant of the protocol. The parameters that drive it: They are published in each contract specification and readable from the chain. An integration that hard-codes them will eventually compute a number the network is not applying — see Developers.

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Where to go next