☠️ MoneyX Liquidations Guide

MoneyX Liquidations Guide

This guide provides a comprehensive overview of liquidations on MoneyX, a decentralized perpetual futures exchange on the Binance Smart Chain (BSC). Designed for users of all experience levels, this page explains the liquidation process, its triggers, associated fees, and strategies to avoid liquidation when trading with leverage up to 100x on assets like BTC, ETH, BNB, SOL, XRP, and DOGE. By understanding liquidations, you can manage risk effectively and protect your capital. Below, we detail the mechanics, calculations, and risk management tools, with references to audited smart contracts and monitoring resources.

What is a Liquidation?

A liquidation occurs when a leveraged position’s market price reaches a predefined liquidation price, causing the position to be automatically closed to prevent losses exceeding the trader’s collateral. On MoneyX, liquidations protect the platform’s liquidity pool (MLP) and ensure solvency by closing positions before they accrue negative balances. Liquidations are executed by the Vault contract, with prices sourced from the VaultPriceFeed for accuracy.

Key Features of Liquidations

• Automatic Execution: Positions are closed instantly when the mark price hits the liquidation price, ensuring no debt to the MLP pool.

• Leverage Sensitivity: Higher leverage (e.g., 50x–100x) reduces the price movement needed to trigger liquidation.

• Fee Structure: A small liquidation fee is applied, paid in the traded asset (e.g., BTC for BTC/USD positions).

• Transparent Pricing: Oracle-based mark prices from VaultPriceFeed (0x31086dBa211D1e66F51701535AD4C0e0f98A3482) prevent manipulation.

• Remaining Collateral: After liquidation, any remaining collateral is returned to the trader’s wallet, minus fees.

How Liquidations Work

Liquidation Triggers

A position is liquidated when the mark price of the traded asset reaches the liquidation price, calculated based on:

• Entry Price: The price at which the position was opened.

• Leverage: The multiplier applied to collateral (e.g., 10x).

• Collateral: The trader’s deposited funds (e.g., USDT, USDC).

• Maintenance Margin: A small buffer (typically 1%) to cover fees and volatility.

Liquidation Price Formula:

For Long: Liquidation Price = Entry Price × (1 - (1 / Leverage) + Maintenance Margin)

For Short: Liquidation Price = Entry Price × (1 + (1 / Leverage) - Maintenance Margin)

• Maintenance Margin: ~1% (0.01), adjustable by the VaultUtils contract (0xd5AEE715c59E8e62a9d7e49d8bA68B8A52C09CE4).

• Mark Price: Real-time price from VaultPriceFeed, ensuring fair valuation.

Example: Liquidation Calculation

• Scenario: Open a $1,000 BTC/USD long position at 10x leverage, entry price $60,000/BTC.

• Position Size: $1,000 × 10 = $10,000 (~0.1667 BTC).

• Liquidation Price (Long):
  Liquidation Price = $60,000 × (1 - (1 / 10) + 0.01)

•                   = $60,000 × (1 - 0.1 + 0.01) = $60,000 × 0.91 = $54,600

• Trigger: If BTC’s mark price drops to $54,600 or below, the position is liquidated.

• Short Example: For a short at $60,000, 10x leverage:
  Liquidation Price = $60,000 × (1 + (1 / 10) - 0.01)

•                   = $60,000 × (1 + 0.1 - 0.01) = $60,000 × 1.09 = $65,400

• Trigger: If BTC’s mark price rises to $65,400 or above, the position is liquidated.

Liquidation Process

1. Price Monitoring: The VaultPriceFeed and FastPriceFeed (0x1dE47321bc0e909969Dc97484FB4949fBf19068a) monitor mark prices in real-time.

2. Threshold Breach: When the mark price hits the liquidation price, the Vault (0xeB0E5E1a8500317A1B8fDd195097D5509Ef861de) triggers liquidation.

3. Position Closure: The position is closed at the mark price, with losses deducted from collateral.

4. Fee Application:

   • Liquidation Fee: $5 (or equivalent in the traded asset, e.g., ~0.000083 BTC at $60,000/BTC).

   • Borrow Fees: Accrued at 0.0099% per hour until liquidation.

   • Trading Fees: If not already paid, a 0.1% closing fee may apply.

5. Collateral Return: Remaining collateral (if any) is returned to the trader’s wallet.

6. Distribution: Liquidation fees are distributed to MLP holders (70%) and MONEY/EsMONEY stakers (30%).

Example:

• $10,000 BTC long position (10x, $1,000 collateral) liquidates at $54,600.

• Loss: ($60,000 - $54,600) × 0.1667 BTC = $900.

• Fees: $5 liquidation (~0.000083 BTC) + $2.376 borrow (24 hours, ~0.00004 BTC).

• Remaining Collateral: $1,000 - $900 - $7.376 = $92.624 (~0.0017 BTC).

• Returned: ~0.0017 BTC to wallet.

Fees Associated with Liquidations

• Liquidation Fee: $5 (or equivalent in traded asset), fixed to cover execution costs.

• Borrow Fees: 0.0099% per hour, accrued until liquidation, paid in the traded asset.

• Trading Fees: 0.1% closing fee (if not prepaid), paid in the traded asset.

• Gas Fees: Minimal BSC fees (~$0.01–$0.05, paid in BNB) for on-chain liquidation processing.

• Funding Rates: If applicable, charged at the time of liquidation, paid in the traded asset.

Example:

• Liquidation of a $10,000 BTC position:

  • Liquidation Fee: ~0.000083 BTC.

  • Borrow Fee (24 hours): ~0.00004 BTC.

  • Closing Fee: $10,000 × 0.1% = ~0.00017 BTC.

  • Total: ~0.000293 BTC + ~$0.03 gas (BNB).

Avoiding Liquidations

To minimize the risk of liquidation, implement these strategies:

1. Use Lower Leverage:

   • Lower leverage (e.g., 2x–5x) increases the price range before liquidation.

   • Example: At 5x leverage, $60,000 BTC long has a liquidation price of $48,000 vs. $54,600 at 10x.

2. Set Stop-Loss Orders:

   • Place trigger orders to close positions before reaching the liquidation price (Orders and Executions Guide).

   • Example: Set a stop-loss at $55,000 for a $60,000 BTC long to exit early.

3. Add Collateral:

   • Deposit additional USDT/USDC to increase collateral and adjust the liquidation price.

   • Example: Adding $500 to a $1,000 position at 10x leverage shifts the liquidation price lower.

4. Monitor Mark Price:

   • Track real-time prices in the Trade tab or Stats Page.

   • Use alerts for price levels nearing your liquidation threshold.

5. Diversify Positions:

   • Spread capital across multiple assets (e.g., BTC, ETH) to reduce single-asset risk.

6. Account for Fees:

   • Factor borrow fees (0.0099%/hour) and funding rates into your strategy to avoid unexpected collateral reduction.

Pro Tip: Use the Positions tab to monitor your liquidation price and unrealized PnL in real-time, adjusting collateral or closing positions proactively.

Liquidation Risks and Considerations

• High Leverage Risk: Higher leverage (e.g., 50x–100x) significantly narrows the liquidation price range, increasing risk.

  • Example: At 100x, a $60,000 BTC long liquidates at $59,400 (1% drop).

• Market Volatility: Crypto markets can experience rapid price swings, triggering liquidations unexpectedly.

• Oracle Risk: While VaultPriceFeed and FastPriceFeed are secure, oracle delays or discrepancies could affect liquidation timing.

• Fee Impact: Liquidation and borrow fees reduce remaining collateral, especially for small positions.

• Liquidity Risk: In low-liquidity scenarios, large positions may face partial liquidation or slippage, though the MLP pool mitigates this.

Mitigate by:

• Starting with low leverage (2x–5x) for beginners.

• Setting stop-loss orders to exit before liquidation.

• Monitoring market conditions and funding rates on the Stats Page.

• Maintaining sufficient BNB for gas fees to adjust positions.

Key Contracts

Liquidations are powered by audited BSC contracts:

• Vault (0xeB0E5E1a8500317A1B8fDd195097D5509Ef861de): Executes liquidations and manages collateral.

• VaultPriceFeed (0x31086dBa211D1e66F51701535AD4C0e0f98A3482): Supplies real-time mark prices.

• FastPriceFeed (0x1dE47321bc0e909969Dc97484FB4949fBf19068a): Enhances price update speed.

• VaultUtils (0xd5AEE715c59E8e62a9d7e49d8bA68B8A52C09CE4): Enforces liquidation thresholds and margin requirements.

• PositionManager (0x62dEFAA710dcd1dA4d9231E1EED1fb16c2278CCF): Processes position closures.

For a full list, see the Governance and Security Guide.

Monitoring and Management

• Positions Tab: Track position size, collateral, mark price, and liquidation price in real-time on moneyxpro.com.

• Stats Page: View platform liquidity, funding rates, and open interest at https://stats.moneyxpro.com.

• Trades Tab: Review liquidation history and fees paid in the traded asset.

• BSC Explorer: Verify liquidation transactions via BscScan using Vault or PositionManager addresses.

Getting Support

For assistance or community insights:

• Join the BESC LLC Portal on Telegram for real-time support.

• Follow @bescllc for updates and alerts.

• Visit moneyxpro.com for platform access.

Next Steps

Trade with confidence on moneyxpro.com by monitoring liquidation prices and setting stop-loss orders. Optimize risk management using the Stats Page and engage via Telegram for tips.