What would happen in a situation where your position should

Question

What would happen in a situation where your position should

be liquidated, but the position size would have too large of an impact on the price if closed all at once? My understanding, please correct me if I am wrong, is that 25% of the position would be liquidated. But then what? If the price continues to go against the position do the liquidity providers just continue to take losses? When do additional portions of the position get liquidated?

#cryptocurrency #english #perp

0

06.10.2021

5 ответов

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Joel Автор вопроса

Regarding liquidity. Is it fairly constant for each contract even in times of rapid market movement, or does it possibly dry up and price impact will be greater?

0

07.10.2021

DavidBrain

You're using v1, asking questions about v1 and we're giving you v2 answers..lol For v1 there are no liquidity providers. For every corresponding trade there's a counter position taken by other traders. If there's none the insurance fund(counterparty of last resort steps in)

0

07.10.2021

DavidBrain

Joel
Regarding liquidity. Is it fairly constant for eac...

You can scan this page to have an idea of how "liquidity" works on PERP. https://docs.perp.fi/getting-started/how-it-works/vamm#vamm

0

07.10.2021

Joel Автор вопроса

DavidBrain
You're using v1, asking questions about v1 and we'...

Oh, ok. Well this seems like an answer I should have been able to find with a search but could not - when is it estimated v2 be in production mode?

0

07.10.2021

Lee.KB | perp.com | Never ask to DM · Accepted Answer

If the price continues to go against the position do the liquidity providers just continue to take losses? When do additional portions of the position get liquidated? Makers and takers take opposite sides of a trade, so if a trader is getting liquidated, it implies a maker aka LP is earning money. The liquidation process for v2 will initially be 100% liquidation, with partial liquidations coming soon after launch as part of the rolling release. In partial liquidations, the remaining position is left in a 'healthy' state. If the price continues to move against this position, further portions will be liquidated. So the entire position would get liquidated at once? Can the price impact be approximated from using the UI, or might the price impact be very different in the type of market that would produce a lot of liquidations? Price impact of your position will be shown in the UI, e.g. if you close a position a confirmation screen will show the estimated impact. In v2 price impact will depend on how much liquidity is in each pool. More liquidity = lower price impact, less liquidity = higher price impact :)

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What would happen in a situation where your position should

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