XEI Docs
  • 👋Welcome to XEI
  • Feature Description
    • 💫Swap Trading
    • ✨Leverage Trading
    • 💰Liquidity Pools
    • 🎭Lending Pools
    • 💵Liquidation
    • 💹Oracle
  • PRODUCT GUIDES
    • 📒Tutorial
      • Getting Started on XEI
      • How to Start a Market Swap
      • How to Add Trading Tokens
      • How to Start Futures Trading
      • How to Add Liquidity
    • ❓FAQ
      • What should I do if I can't find the cryptocurrency I want to trade?
      • What are market orders and limit orders?
      • What fees are associated with Swap transactions?
      • What are fee tiers, and how do you choose the right fee tier?
      • What happens if the current price exceeds the price range set for my liquidity position?
      • Are fee rewards automatically compounded?
      • What factors affect LP APR?
      • What is Lending Pools?
      • How is the reward period calculated after participating in Lending Pool?
      • Which cryptocurrencies are supported by Lending Pool?
      • How long does it take for redemption to be credited to the account?
  • OTHER
    • 💌Contact Us
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  • Independent Risk Management Between Trading Pairs
  • Risk Assessment with AMM Prices
  • Operational Restrictions
  1. Feature Description

Liquidation

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Independent Risk Management Between Trading Pairs

To support an open margin trading market, we have established isolated pools with targeted risk parameters, tailored to the unique volatility of each asset. Each trading pair is assigned a specific collateral ratio, determined by its inherent volatility and the blockchain's block time and processing capacity.

Risk Assessment with AMM Prices

Real-time pricing provided by the on-chain Automated Market Maker (AMM) model is utilized as a benchmark for risk assessment and liquidation. This approach is crucial in accelerating the development of the leveraged trading market in a decentralized environment, especially when compared to the delay in waiting for Chainlink oracles to generate or update market data. The instant price data provided by DEXs, maintained on-chain and secured by both technical and economic measures, has become the standard oracle for various DeFi applications, such as margin trading.

Operational Restrictions

To prevent flash loan attacks, multiple restrictions have been implemented in the protocol's design:

  • Conducting open, close, or liquidation operations within the same transaction is prohibited.

  • During the liquidation process, ensure the validity of the liquidation price to prevent attackers from manipulating prices to trigger liquidations for profit or to cause cascading liquidation events.

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Oracle