Margin, Maintenance & Liquidation Mechanics · Autonity Explainer E-02

Margin, Maintenance
& Liquidation

How the AFP DCC computed margin health, maintenance thresholds, and liquidation prices before every settlement epoch. The same computation runs on Hyperliquid and every other perp venue today.

Autonity stood down in February 2026. This explainer preserves its mechanics. Not financial advice.

Historical · Feb 2026 Educational Interactive demo

Why margin health matters

When you open a leveraged position, you post a fraction of the notional as margin. The clearing system does not wait for you to lose everything — it liquidates you once your margin drops below a maintenance threshold. This protects the other side of your trade from a situation where you cannot cover your loss.

The AFP DCC ran this computation on-chain before every settlement epoch. Every Forecastathon participant holding an open position had their margin health checked deterministically, using the formula below. GREEN meant safe, AMBER meant near the threshold, RED meant at-risk of immediate liquidation.

The DCC's job

The DCC (Decentralized Clearing Contract) was the on-chain layer that held margin, computed health, and triggered liquidations. It did not match trades. Venue-agnostic clearing meant a position opened on one venue could be liquidated by the DCC regardless of which venue the intent-signing key pointed to. See E-03 for the full clearing design.

The margin health formula

unrealized_pnl = side_sign × (mark − entry) × (notional / entry) margin_balance = margin_posted + unrealized_pnl maintenance_threshold = notional × mmr buffer = margin_balance − maintenance_threshold buffer_pct = buffer / maintenance_threshold × 100 Health classification: GREEN → buffer_pct > 100% (buffer > full maintenance threshold) AMBER → 0% < buffer_pct ≤ 100% (buffer exists but thin) RED → buffer_pct ≤ 0% (at or below liquidation threshold) Liquidation price (isolated margin): liq_price = entry − side_sign × (margin_posted − maintenance_threshold) / (notional / entry)

The mark price is what drives unrealized PnL. On Autonity, the AFP DCC used the oracle-aggregated price (computed by the same validator network that settled forecasts) rather than a last-trade price. This prevented wash-trading from manipulating margin health.

Try the margin health calculator

🔒 All inputs are processed locally in your browser. No data is transmitted. Do not enter real personal data — use synthetic or anonymised inputs only.

Preset

Position Inputs

Direction

Notional Value

Entry Price

Mark Price (current)

Margin Posted

Collateral deposited to hold this position

Maintenance Margin Rate (MMR)

e.g. 0.05 = 5% of notional

Margin Health

GREEN

Margin buffer is healthy

BUFFER PCT

--

Buffer vs maintenance threshold

Margin health on live venues

AFP/DCC mechanic	Live heir
On-chain margin health check per epoch	Hyperliquid runs margin checks continuously; liquidation is automatic once health drops below 1
Maintenance margin rate (MMR 5%)	Hyperliquid: ~2.5% at 20x leverage (1/(2×L)); dYdX v4: ~3% for BTC, higher for alt-perps
Oracle-settled mark price	Hyperliquid uses a median of top CEX spot prices; Binance uses a composite index
Isolated margin model	Hyperliquid and most perp venues support isolated mode; Binance Unified Margin mixes positions at the account level
DCC liquidation trigger	All modern perp venues auto-liquidate at MMR; some use partial liquidation (Binance) before full liquidation

AFP/DCC mechanic

Live heir

On-chain margin health check per epoch

Hyperliquid runs margin checks continuously; liquidation is automatic once health drops below 1

Maintenance margin rate (MMR 5%)

Hyperliquid: ~2.5% at 20x leverage (1/(2×L)); dYdX v4: ~3% for BTC, higher for alt-perps

Oracle-settled mark price

Hyperliquid uses a median of top CEX spot prices; Binance uses a composite index

Isolated margin model

Hyperliquid and most perp venues support isolated mode; Binance Unified Margin mixes positions at the account level

DCC liquidation trigger

All modern perp venues auto-liquidate at MMR; some use partial liquidation (Binance) before full liquidation