The formula for calculating the liquidation price for a margin trade using currency "i" is as follows:
- "i" represents the currency "i";
- "Ai" represents the total amount of "i" assets;
- "Li" represents the borrowed amount of "x" asset;
- "Ri" represents the amount of interest payable on "x" asset;
- "Pi" represents the index price of the "x" asset/BTC (or USDT) pair;
- "li" represents the liquidation price for "x" asset.
Liquidation will be triggered when the risk ratio reaches the liquidation risk ratio.
Risk Ratio = Total Assets / (Total Amount Borrowed + Interest Payable).
Using the "i" currency as an example:
Therefore, the liquidation reference price for "i" currency is:
Ratio of the Index Price to the Liquidation Reference Price = (Liquidation Price - Index Price) / Index Price.
