Auto Deleverage and Mandatory Liquidation
The fluctuation of price may causes the remaining equity of a position to be negative, thus cause unavoidable risk to the system. Derify protocol may automatically reduce or liquidate positions according to the margin level of them.
When remaining margin level is lower than the Maintenance Margin Level, but higher than Liquidation Margin Level , system will automatically reduce the position until it's margin level is higher than the Maintenance Margin Level .
When remaining margin level is lower than the the Liquidation Margin Level , system will automatically close the position, any remaining margin will be allocated to the insurance pool.