Hyperliquid Officially Launches Cross-Margin Auto-Deleveraging (ADL) Liquidation System
BlockBeats News, November 28th, Hyperliquid has enabled its Cross-Margin Auto Deleveraging (ADL) liquidation system across all its major perpetual contract markets, introducing a deeper level of risk management as open interest climbs and funding rates fluctuate. Following a series of internal stress tests and simulations over the past month, ADL is now live to ensure orderly operation of the market during periods of intense volatility, particularly in times of liquidity strain or near liquidation of large positions.
When the insurance fund is unable to fully absorb the loss from a liquidated position, ADL (Auto Deleveraging Mechanism) serves as a backup liquidation method. In such cases, positions of highly leveraged traders with unrealized profits may be partially or entirely deleveraged to cover the shortfall. Hyperliquid emphasizes that ADL will only be triggered under special circumstances, with its design intended to maintain market integrity by preventing cascading defaults that could potentially disrupt the entire ecosystem.
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