ADL Further Information
Sat.is utilizes an Auto-Deleveraging (ADL) system instead of the traditional “Socialized Loss” system.
Comparison of the two systems:
ADL
- Resolve loss uncertainty
- Allow traders to take immediate actions right after a deleveraging event
- Inform deleveraged traders of their closeout price and size, and allow them to re-enter the market
Socialized Loss System
- One risky trader can cause large losses to other traders, including low-risk traders
- Profit is locked until rebalance or settlement in case of loss
Last modified 1yr ago