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  • f(x) Protocol Documentation
  • OVERVIEW
    • 📖Abstract
    • ⭐Core Products of f(x) Protocol 2.0
  • f(x) Protocol Mechanisms
    • ⚖️The f(x) Invariant
    • ⚙️Key Functions of f(x) 2.0
    • 🚀Creating a Leveraged Position (xPOSITION)
    • 🪂Rebalancing the Position (Liquidation Brake)
      • Understanding the band system
      • Liquidation process
      • Developers
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  • RISK MANAGEMENT
    • 🧘‍♂️Risk framework
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      • Understanding the redemption mechanism
    • 🚨Risk parameters
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  • FAQ
    • 🟦Is fxUSD an algorithmic stablecoin?
    • 🟦Where does the yield come from?
    • 🟦How do f(x) Protocol stablecoins maintain stability?
    • 🟦Is there any LUNA-like risk?
    • 🟦How does f(x) Protocol minimize liquidations?
    • 🟦How does f(x) Protocol minimize funding costs?
    • 🟦What could go wrong?
    • 🟦Why are there different stablecoins?
    • 🟦What is the difference between f(x) Protocol V1 and V2?
    • 🟦What price drop would it require for my xPOSITION to be rebalanced/liquidated?
  • GUIDES
    • 📈How to open a leverage position (xPOSITION)
    • 📉How to close a leverage position (xPOSITION)
    • 📐How to adjust your leverage / how to reduce your Liquidation Brake
    • ➕How to add/reduce a leverage position?
    • 💰How to stake into the stability pool?
    • 🚶‍♂️How to unstake from the stability pool?
  • MORE
    • 🔡Token Breakdown
    • 1️⃣f(x) Protocol 1.0
      • Leverage
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      • FX Auto-Compound
      • Oracle
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  1. FAQ

What price drop would it require for my xPOSITION to be rebalanced/liquidated?

PreviousWhat is the difference between f(x) Protocol V1 and V2?NextHow to open a leverage position (xPOSITION)

Last updated 5 months ago

f(x) Protocol prevents leverage traders from being liquidated by rebalancing the positions before liquidation would be required. The LTV at which the protocol rebalances or liquidates the xPOSITION is set by governance (see Risk parameters). The price distance to reach the rebalancing LTV depends on the leverage level the user chooses. You can find some examples of price drops required to reach the rebalancing line or liquidation line according to the leverage of an xPOSITION below.

The UI provides the exact price of rebalancing and liquidation line for your xPOSITION when opening it and can be consulted in your dashboard once the position is open. The table below is an example.

Leverage
Price drop to rebalance (LTV=88%)
Price drop to liquidation (LTV=95%)

2

-43.18%

-47.37%

3

-24.24%

-29.82%

4

-14.77%

-21.05%

5

-9.09%

-15.79%

6

-5.30%

-12.28%

7

-2.60%

-9.77%

Learn more about the rebalancing and liquidation process below.

🟦
🪂Rebalancing the Position (Liquidation Brake)