Maintenance Margin
The minimum collateral required to keep a leveraged position open.
What is Maintenance Margin?
Maintenance margin on a Perp DEX is the minimum amount of collateral a trader must hold in their position to avoid liquidation. It is typically a percentage of the position’s value, lower than the initial margin. For example, dYdX might require a 5% maintenance margin for a $10,000 position, meaning the trader needs at least $500 in collateral to keep the position open.
If the position’s value falls due to market movements and the margin drops below this threshold, the smart contract triggers liquidation. Traders can add more funds to meet the maintenance margin and avoid closure. This mechanism ensures the protocol’s stability by preventing undercollateralized positions.
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