Risk Management
Risk Management Framework:
Real-time monitoring of xPOSITION leverage and collateralization ratios, triggering rebalancing or liquidation as needed.
Real-Time Leverage Fluctuations:
Market volatility and user actions affect leverage ratios, with dynamic adjustments by the protocol.
Rebalance and Liquidation Triggers:
Threshold-based triggers initiate rebalancing or liquidation to maintain system stability.
Reserve Fund and Bad Debt Redistribution:
Reserve funds enhance risk resistance; under-collateralized debt is proportionally distributed across active positions if reserves are insufficient.
Recapitalization:
When the total collateralization ratio falls below 100%, the protocol halts new xPOSITION openings and utilizes protocol assets to restore the fxUSD peg.
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