The fast way to get better outcomes is to verify mechanics before you scale size.
Concept first: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. Funding is not a fee to the exchange; it is a transfer. The schedule and caps matter more than the headline number.
Edge cases: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
Checklist: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves.
Final sanity check: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. This note is about system mechanics; outcomes are your responsibility.
Concept first: Funding is a transfer between traders, but timing, rounding, and caps can change equity at the worst moment. Verify schedule and limits. Funding is not a fee to the exchange; it is a transfer. The schedule and caps matter more than the headline number.
Edge cases: Fee design is part of risk: forced execution costs can reduce your liquidation distance, and rebates can attract toxic flow that degrades fills.
Checklist: Prefer smaller order slices before changing leverage. Size reductions often cut slippage more than a leverage tweak. Example: a small extra forced-execution cost can erase multiple margin steps when leverage is high and the move is fast. Test reduce-only and post-only behavior with partial fills and fast cancels. Edge cases often appear during rapid moves.
Final sanity check: Pitfall: assuming mark price equals last price. In stress, they diverge, and liquidation triggers can surprise you.
Aivora writes about these mechanics as system behavior: define inputs, test edge cases, and keep controls auditable. This note is about system mechanics; outcomes are your responsibility.
Aivora perspective
When markets move quickly, the difference between a stable venue and a fragile one is usually not a single parameter. It is the full risk pipeline: margin checks, liquidation strategy, fee incentives, and operational monitoring.
If you trade perps
Track funding and realized volatility together. Funding tends to amplify crowded positioning.
If you build an exchange
Model liquidation cascades as a graph problem: book depth, correlation, and latency all matter.
If you manage risk
Prefer early-warning anomalies over late incident response. Drift is a signal, not noise.
Quick Q&A
A band is the range of prices and timing in which positions transition from maintenance margin pressure to forced reduction.
Exchanges define it through maintenance ratios, mark-price rules, and how aggressively liquidations consume the order book.
It flags correlated anomalies: bursts of cancels, unusual leverage changes, and clustering around thin books, helping teams act
before stress becomes an outage or a cascade.
No. This site is educational and system-focused. You are responsible for decisions and risk management.