Liquidation Mechanism

Liquidation Price Distance = Open Price * (Collateral * 0.9 - Rollover Fees - Borrowing Fees) / Collateral / Leverage.

Liquidation price = If Long: Open Price - Liquidation Price Distance ,

Else (Short): Open Price + Liquidation Price Distance.

The liquidation line is 90%. When the currency price reaches the liquidation price, which means the collateral loss exceeds 90%, the liquidation mechanism will be triggered and the Liquidation Bot will automatically query the real-time quotation from Moda DON and initiate a liquidation order.

The user needs to pay an Oracle fee and liquidation order fee to run a Liquidation Bot. After the liquidation order is executed, 50% of the collateral residual value will be rewarded to Liquidation Bot in USDT, while 50% of it will be sent to mUSDT Vault.

Liquidation Residual Value = Collateral Value - Order PnL - Order Fee (Opening Fee + Borrowing Fee + Rollover Interest) - Liquidation Fee (Oracle Fee + Liquidation Order Fee)