Liquidation & account suspension
Two distinct risk mechanisms, with different triggers.
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Account loss floors and maintenance
| Mechanism | Trigger | Effect |
|---|---|---|
| Iceberg account loss limit | Account equity at or below the daily or total floor | Permanent account suspension and closure of remaining exposure |
| Maintenance liquidation | A cross or isolated compartment no longer meets venue maintenance | Liquidation of the affected compartment, subject to the available-depth and backstop model |
The first trigger reached matters. A position can be closed by Iceberg’s account loss limit before its displayed maintenance liquidation estimate. Isolated mode does not bypass that account limit.
Read the liquidation estimate correctly
The estimate solves the tier-aware maintenance equation at a hypothetical price. For a cross position, it holds the marks and maintenance of other cross positions fixed. Other marks, funding, collateral moves and new fills can therefore change the boundary.
The ticket also previews the hypothetical account after the proposed fill. Stale or pending-account estimates are suppressed. Neither the preview nor the position estimate is a guaranteed fill price, and neither substitutes for the separate prop loss floors.
Available-depth liquidation
The server first consumes validated opposite-side L2 liquidity using the shared quote budget. It cancels affected pending orders and rechecks requirements under the account lock. Available-depth fills use the market’s configured taker fee.
For maintenance positions above 100,000 USDC, the initial request is 20% of size. A partial execution starts a 30-second account cooldown during which the next liquidation request uses the full remaining size. If closing restores maintenance, remaining collateral stays with the trader.
Explicit simulated backstop
After an unsuccessful book close, a compartment below two-thirds of its maintenance requirement can transfer to the simulated backstop. A cross backstop transfers the cross pool; an isolated backstop transfers only that position generation.
The settlement closes the remaining inventory at the current mark for ledger reconciliation. It records no invented book fill, adds no clearance fee and records any collateral forfeiture or deficit separately. It is not a trade with real HLP or proof of real exchange liquidity.
Analytics label these events as settlements and exclude their notional from actual book-trade volume. The adjustment is not an extra winning trade.
Timing and data limits
The worker targets a scan approximately every second, but network calls, account checks, funding work and contention extend actual timing. Mark crossings between observations can be missed. Missing or stale data leaves risk queued for retry; the engine does not reconstruct every missed tick.
An unhealthy risk heartbeat blocks new exposure. The simulation models observed book snapshots rather than exchange block ordering, liquidator competition or a complete future order flow.