In Coincall's Standard Margin mode SM, the Maintenance Margin(MM) of Perpetual Contracts adopts a graded margin rate system to prevent undue market impact caused by the liquidation of extremely large positions. The larger the user's position, the higher the required maintenance margin rate, and the lower the maximum available leverage.
For MM, the minimum MM rate is calculated based on the different position value levels of the account. Similar to the progressive tax rate, the corresponding maintenance margin rate is set for each level of position value, and the maintenance margin is calculated separately for each level. The required maintenance margin for each level is added up to obtain the total maintenance margin. The "excess" in the progressive tax rate refers to the part that exceeds a certain level, which is only taxed at a higher rate for the excess part. Similarly, the maintenance margin for the excess part is calculated at a higher margin rate.
Taking BTC-Perp perpetual contract as an example, its contract gradient is set as:
|Level||Position value (USD Nominal Value)||Max Leverage||MM Rate||Quick calculation amount of MM|
|1||0 - 50,000||50x||0.40%||0|
|2||50,000 - 250,000||25x||0.50%||50|
|3||250,000 - 1,000,000||20x||1.00%||1,300|
|4||1,000,000 - 7,500,000||10x||2.50%||16,300|
|5||7,500,000 - 40,000,000||6x||5.00%||203,800|
|6||40,000,000 - 100,000,000||5x||10.00%||2,203,800|
|7||100,000,000 - 200,000,000||4x||12.50%||4,703,800|
|8||200,000,000 - 400,000,000||3x||15.00%||9,703,800|
|9||400,000,000 - 600,000,000||2x||25.00%||49,703,800|
|10||600,000,000 - 1,000,000,000||1x||50.00%||199,703,800|
- Maintenance Margin = Position Nominal Value * MM Rate - Quick Calculation Amount of MM + Liquidation Fee
- Position Nominal Value = Position Amount * Mark Price
- Liquidation Fee = Futures Liquidation Fee Rate * Futures Mark Price * Position Amount
Taking the BTC-Perp contract as an example, its contract gradient is set as follows:
For instance, if an account's BTC-Prep position nominal value is $10,000, in the first level, the maximum available leverage ratio is 50x, and the MM rate is 0.4%, the required MM would be 10,000*0.40% - 0 = $40.
If the position nominal value increases to $60,000 in the second level, with the excess part over the first level using a margin rate of 0.50% and the first level still using a margin rate of 0.40%, the required MM would be (50,000*0.40% - 0)+(60,000-50,000)* 0.50% - 50 =200+50= $250
Coincall's use of a graded margin system and progressive excess approach can significantly reduce MM usage and effectively increase user fund utilization rates.
Note: the liquidation fee is not considered here.