Auto-deleveraging (ADL)

When a liquidation can't be cleared on the order book, the protocol falls back to auto-deleveraging (ADL): the position is closed against traders holding the opposite side.

How ADL works

A liquidated position is first taken over by a liquidator account at the bankruptcy price and offered to the book as a single reduce-only IOC order. That order is priced past the bankruptcy price — below it when selling, above it when buying — so the book has room to absorb the position; how far past is configured per market. Whatever the order cannot fill is force-closed against counterparties with opposing positions, until the position is cleared.

Widening that price buffer sends more of the position to the book and less to ADL, at the cost of a worse disposal price; narrowing it does the reverse. ADL is the fallback for the remainder, not the first resort.

ADL fills are priced from the bankruptcy price adjusted by the taker fee rate — not the mark price:

ADL price (long position)  = bankruptcy price × (1 + taker fee rate)
ADL price (short position) = bankruptcy price × (1 − taker fee rate)

Counterparties are ranked by leverage-PnL ratio — roughly, how profitable the position is combined with how much leverage it uses. The most profitable, highest-leverage positions are deleveraged first.

Reading your ADL light

Every position carries an ADL indicator from 1 to 5, reported as adlQuantile in your position state and derived from your leverage-PnL ratio relative to the highest ratio currently held on your side of that market:

Positions that are flat or losing always sit at 1. The light updates in real time. If you're at 5 and want to avoid being deleveraged, reduce leverage or take some profit to move down the queue.