Liquidation closes your position when the oracle price reaches its liquidation price. You lose the margin committed to that position, including any added margin that has activated.
More leverage, less room
Section titled “More leverage, less room”Higher leverage brings liquidation closer to your entry price. Longs liquidate below entry; shorts liquidate above it.
Each market sets a liquidation buffer, 0.02% of price at launch. The liquidation price sits that much closer to entry than the point where your margin runs out. The buffer is the same price distance at every leverage, so it takes a larger share of a high-leverage position’s room: about 2% of it at 100× and 20% at 1,000×.
While available treasury equity is below the 5 million USDG threshold, a new fill takes the market’s buffer times a global buffer multiplier. The multiplier is 2× at launch, so a fill at launch takes a 0.04% buffer: about 4% of the room at 100× and 40% at 1,000×. Governance can set it from 1× to 10× after the timelock delay. At or above the threshold, a fill takes the market’s buffer alone.
Adding margin moves liquidation farther away once the addition activates. The buffer stays the one set when the position filled.
A touch is enough
Section titled “A touch is enough”Mog checks the price path recorded by the oracle. A touch of your liquidation price closes the position, even if the price later recovers. That touch takes priority over a pending close or margin addition.
A liquidation earns MOG on the buffer you give up and on your open fee.