Margin ratio

Liquidations on Palmswap Protocol are determined based on the margin ratio of your position. If you are using 10x leverage your initial margin ratio will be 10%, if the margin ratio drops to 6.25% or below a partial liquidation will be initiated. If your margin ratio falls to 2.5% or below, your position will be liquidated completely.

The margin ratio is calculated by adding your margin size and your PnL for a given position and then dividing by the nominal value of the position (position size multiplied by the market price).

MarginRatio=(Margin+unrealizedPnL)PositionNotionalMargin Ratio = \frac{(Margin+unrealizedPnL)}{PositionNotional}

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