Auto-Deleveraging (ADL)

1. What is ADL?

Auto-Deleveraging (ADL) is a mechanism of forcibly liquidating positions to minimize the traders and the platform's overall risk, in the event of depletion or rapid drawdown of the insurance fund due to extreme market conditions or force majeure. A rapid drawback refers to the insurance fund falling from its peak by a preset threshold within 1, 2, 4, or 8 hours. The exact thresholds vary by trading pair and may be adjusted by the platform in response to market conditions and user protection principles.

2. How does ADL work?

When ADL is triggered, the system selects positions for deleveraging based on their priority ranking instead of liquidations through the order book. Thus, after the execution, the counterparty positions will be reduced, and the funds from the closed positions will be added to their account balances.

Please note ADL execution prices may deviate from the specific contract's real-time market price. We strongly recommend monitoring the ADL Indicator (priority level signal) to avoid being selected as a counterparty.

3. How is ADL priority determined?

ADL uses a ranking system based on both account (or position) risk levels and position profitability.

[Cross Margin Mode]

· Profitable position: Leveraged PnL = Position PnL percentage / Account margin ratio

· Losing position: Leverage PnL = Position PnL percentage * Account margin ratio

Accounts with a higher PnL percentage and a lower margin ratio are more likely to be placed higher in the ADL queue.

4. Risk Reminder and Inquiry

You can track your ADL priority level via the indicator:

· 5 bars lit: You are at the top of the queue, indicating very high risk.

· 1 bar lit: You are at the bottom of the queue, indicating low risk.

If an ADL event occurs, you will receive an SMS and email notification, including details of the reduced position and execution price. You can also view this record on the Order History page, where the order type is labeled as ADL.