Liquidation
1. Overview
The Alpha Perp system enforces a minimum maintenance margin requirement to manage risk. If a user's net asset value falls below the required threshold, liquidation is triggered to mitigate potential losses.
Maintenance Margin Rate: X% (differ from the underline assets)
Liquidation Condition: A user’s net assets must be at least X% of the position value; otherwise, liquidation occurs.
2. Liquidation Price Calculation
2.1 Long Position Liquidation Price
For long positions, the net asset value is calculated as:
Debt accrues over time:
where:
Thus, the liquidation price for long positions is:
2.2 Short Position Liquidation Price
For short positions, the net asset value is calculated as:
Debt quantity accrues over time:
Thus, the liquidation price for short positions is:
3. Liquidation Protection Mechanism
To prevent unnecessary or abnormal liquidations, the Alpha Perp contract incorporates an additional validation step:
When liquidation is triggered, the contract first verifies whether the AMM price confirms the expected liquidation condition.
If the AMM price does not meet the expected conditions, liquidation is halted to protect users from unintended liquidations due to temporary price fluctuations.
This dual-check mechanism ensures a fair and stable liquidation process, minimizing unnecessary liquidations and enhancing user security.
4. Summary
The Alpha Perp system enforces a maintenance margin rate to determine liquidation.
Liquidation prices are calculated differently for long and short positions.
A secondary AMM price validation ensures liquidations only occur under proper conditions.
This mechanism safeguards users from abnormal liquidations while maintaining the system’s risk management integrity.
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