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Changes to Account Margin

Peter avatar
Shared by Peter • May 30, 2023

We would like to inform you about upcoming changes to our risk engine and policies that may affect your accounts and any open positions you have.

Starting on Wednesday, May 31st, at 10:00 AM UTC, we will be adjusting how USDT reserved for working bids in our spot and repo markets affects users’ margin, and removing Loan-to-Value ratios (LTV) for all non-USDT assets.

Specifically:

1) Any reserved USDT acting as margin will be deducted from users’ collateral balances.

2) Non-USDT LTVs will be reduced to 0, therefore reducing users’ collateral balances.

These changes align with our mission to create a fair and transparent exchange for all participants.

Additionally, we will soon launch a borrow/lend pool, enabling coins to be pledged as collateral in exchange for USDT.

What does this mean practically?

These changes mean that the collateral value attributed to coins such as BTC, ETH, and USDC will be reduced to 0. Furthermore, any spot and repo bids will reduce the collateral balance available for maintaining perp positions and margin requirements.

To illustrate this, consider the following coin collateral example. In this scenario, the user's account balance and collateral value before the update are as follows:

Asset

Quantity

Index Price

LTV

Collateral Value

USDT

10,000

1

1

10,000

BTC

1

28,000

0.95

26,600

Collateral Balance

36,600

These are the updated values after the update has been applied:

Asset

Quantity

Index Price

LTV

Collateral Value

USDT

10,000

1

1

10,000

BTC

1

28,000

0

0

Collateral Balance

10,000

Furthermore, let's consider a spot and repo bid example:

Alice holds $1,000 USDT and her collateral balance is $1,000

Alice is long BTC perps with a maintenance margin of $500

Alice places an order to buy 0.03 spot BTC at $25,000

The cost of the spot BTC bid is 0.03 * 25,000 = $750

Alice’s collateral is reduced to 1,000 - 750 = $250

Alice’s collateral is now below her maintenance margin ($250 < $500) as a result of this change, meaning that the liquidation engine will automatically cancel her spot bid to avoid liquidation.

I have open perp positions. Can I get liquidated?

Yes, if you have open perp positions, you may be at risk of liquidation if your USDT balance is insufficient to cover your maintenance margin. To avoid liquidation, we strongly advise you to deposit USDT, sell assets in the repo market, or close positions to ensure you have enough USDT to cover your maintenance margin.

We appreciate your understanding and cooperation as we implement these risk policy changes to enhance the safety and stability of our platform for all users. Should you have any further questions or concerns, please don't hesitate to reach out to [email protected].

Sincerely,

The OPNX Team