Traditional ADL handles both solvency and position management simultaneously by force closing profitable positions during cascades

CN
19 hours ago

Traditional ADL handles both solvency and position management simultaneously by force closing profitable positions during cascades.

@paradex decouples these functions.

First, temporary withdrawal haircuts address solvency and buys time for markets to stabilize.

If needed, traders get advance notice before any closeouts. This preserves hedges during liquidation storms and becomes critical as they scale into options.


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