# Liquidation

Also written forced liquidation.

*https://cryptomarkets.tools/glossary/liquidation · next to Crypto Charting Platforms & Libraries*

**Definition:** The venue closing a leveraged position because its margin has fallen below the maintenance requirement. On most perpetual venues the trigger is a mark or oracle price rather than the last trade, and the close is sent as orders into the book by the venue's risk engine. Losses beyond the posted margin fall to an insurance fund and, once that cannot absorb them, to profitable traders on the other side through auto-deleveraging.

A liquidation is a margin call with no call. It is also the word this catalogue uses for three
different datasets — prints the exchange published, levels a model estimated, and repayments on a
lending protocol — and a chart rarely says which one it is showing.

## How it works

A leveraged position has to keep a minimum margin behind it, and the minimum is not a flat
percentage. Binance computes maintenance margin as position notional times a maintenance margin
rate, minus a maintenance amount, both read from a table keyed to the size of the position, so the
same account is liquidated at a different price at four times the size. Hyperliquid sets it at half
the initial margin at maximum leverage, which runs from 1.25% on a 40x asset to 16.7% on a 3x one.

**The trigger is not the last trade.** Binance states that liquidation occurs when the mark price
hits the liquidation price of a position, which is the moment its margin ratio reaches 100%. Bybit, OKX and Hyperliquid also trigger on a
[mark price](https://cryptomarkets.tools/glossary/mark-price). dYdX uses its oracle price. A wick on the tape that the mark
price did not follow liquidates nobody, which is the point of the design.

**The close is an order, and each venue sends it differently.**

- **Binance** first sends an immediate-or-cancel order to cut the deficit without closing the whole
  position, and stops if what is left covers the margin after losses and its Liquidation Clearance
  Fee.
- **Hyperliquid** sends market orders for the whole position. Above 100k USDC it sends 20% at a
  time with a 30-second cooldown, and it hands the position to a liquidator vault if equity falls
  below two thirds of maintenance margin. It charges no clearance fee.
- **dYdX** matches a protocol-generated liquidation order at a calculated "fillable price" against
  resting liquidity, with a maximum penalty of 1.5% that its governance can adjust.

**The bankruptcy price is where the insurance fund starts.** Bybit settles every liquidated position
at its bankruptcy price — the level at which no initial margin is left — whatever the market did. If
the forced order filled better, the surplus goes to the insurance fund. If it filled worse, the fund
covers the gap. Binance's fund is fed differently, by all or part of its clearance fees and by any profit on
bankrupt positions it takes over, and covers the same gap.

**Auto-deleveraging is what happens when the fund will not.** Each of the four venues below ranks
the opposing side and closes the top of the queue against the bankrupt position, but the rank, the
trigger and the price all differ:

- **Binance** ranks by profit percentage and effective leverage and closes at the bankruptcy price,
  with no trading fee to the trader who was deleveraged.
- **Bybit** triggers per pair when the insurance fund's eight-hour drawdown crosses a published
  line.
- **OKX** normally closes at the mark price, and at the bankruptcy price once its fund is badly
  depleted.
- **Hyperliquid** triggers when an account goes negative and closes at the previous mark price.

## Why it matters here

**A liquidation history is only as complete as each venue chose to make it, date by date.** The
throttled stream and the side convention are covered in
[how to watch liquidations](https://cryptomarkets.tools/how-to/watch-liquidations). What that page does not cover is time.
Tardis.dev, which records the venues' own feeds, publishes where each one comes from and when it
starts:

- **Deribit** removed the liquidation field from public trade subscriptions on 3 October 2023, and
  the archive ends there.
- **Bybit's** original channel runs to 5 April 2023 and its replacement from 25 February 2025, with
  nothing named in the table between the two.
- **Binance's** stream has pushed at most one snapshot a second since April 2021.
- **Kraken Futures, dYdX v4 and Lighter** are recorded from the trade channel, where a liquidation
  is a trade carrying a flag rather than an event of its own.

[Kaiko](https://cryptomarkets.tools/tools/kaiko) carries liquidation events only from 8 January 2025. A vendor's "liquidations
since 2020" is a claim about some venues, and the useful question is which, from when, and through
which gaps.

**The insurance fund is a dataset most aggregators skip.** Binance publishes an insurance-fund
balance snapshot on its public futures API. Bybit publishes its pools through `/v5/market/insurance`,
where isolated pools refresh every minute and shared pools every 24 hours. A drawdown chart built on
a shared pool is therefore a daily series, however finely it is drawn. [Bybit's API
card](https://cryptomarkets.tools/tools/bybit-api) counts the pool among the venue-specific numbers that price aggregators
rarely carry.

**The word covers a model and an unrelated event as well.** A liquidation *heatmap* is a model of
where positions would be closed, built on [open interest](https://cryptomarkets.tools/glossary/open-interest) and assumed
leverage, and it is not a record of anything that happened. A lending-market liquidation is a third
party repaying an on-chain loan against the protocol's own oracle, and it lives on the
[DeFi shelf](https://cryptomarkets.tools/collections/defi), not in an exchange feed.

**A backtest needs the mechanism, not just the data.** A liquidation check needs a mark price series
and the venue's tiered maintenance table, and most engines have neither.
[What a crypto backtest silently assumes](https://cryptomarkets.tools/guides/what-a-crypto-backtest-assumes) takes them one at
a time.

## Where you will meet this

- [Tardis.dev](https://cryptomarkets.tools/tools/tardis-dev.md)
- [Kaiko Market Data API](https://cryptomarkets.tools/tools/kaiko.md)
- [Bybit Market Data API](https://cryptomarkets.tools/tools/bybit-api.md)
- [Binance Market Data API](https://cryptomarkets.tools/tools/binance-api.md)
- [CoinGlass API](https://cryptomarkets.tools/tools/coinglass.md)
- [Velo](https://cryptomarkets.tools/tools/velo.md)
- [AGGR](https://cryptomarkets.tools/tools/aggr.md)
- [Amberdata Market Data API](https://cryptomarkets.tools/tools/amberdata.md)
- [Aster Market Data API](https://cryptomarkets.tools/tools/aster-api.md)
- [Backtesting.py](https://cryptomarkets.tools/tools/backtesting-py.md)
- [Bookmap](https://cryptomarkets.tools/tools/bookmap.md)
- [ccapi](https://cryptomarkets.tools/tools/ccapi.md)

## FAQ

### What is the difference between the liquidation price and the bankruptcy price?

The liquidation price is where the venue starts closing the position; the bankruptcy price is where the margin behind it would be exactly zero. Bybit's example puts a long's liquidation price at 65,000 USDT and its bankruptcy price at 64,000: the position is taken over when the mark price reaches the first and settled at the second, and the insurance fund keeps or pays the difference from wherever the close actually executed.

### Who pays when a liquidation loses more than the position's margin?

The insurance fund first. Binance and Bybit both describe a fund that covers the gap between the bankruptcy price and the price the forced order actually filled at, and dYdX's documentation has the insurance fund take on the profits and losses of liquidations. When the fund cannot absorb it, auto-deleveraging closes profitable positions on the other side at a price the venue sets.

### Is a liquidation fee the same on every exchange?

No, and on some there is none. Binance deducts a Liquidation Clearance Fee from the margin of a liquidated position and may allocate it to the insurance fund. Hyperliquid's documentation states that unlike centralised exchanges it charges no clearance fee on liquidations. dYdX takes a penalty of up to 1.5% into its insurance fund, a figure its governance can change.

## Sources

1. [Binance Futures Liquidation Protocols](https://www.binance.com/en/support/faq/binance-futures-liquidation-protocols-360033525271) — Binance, 2026-01-04
2. [How to Calculate Liquidation Price of USDⓈ-M Futures Contracts](https://www.binance.com/en/support/faq/how-to-calculate-liquidation-price-of-usd%E2%93%A2-m-futures-contracts-b3c689c1f50a44cabb3a84e663b81d93) — Binance, 2025-12-31
3. [Introduction to Futures Insurance Funds](https://www.binance.com/en/support/faq/introduction-to-futures-insurance-funds-360033525371) — Binance, 2026-01-04
4. [What Is Auto-Deleveraging (ADL) and How Does It Work?](https://www.binance.com/en/support/faq/what-is-auto-deleveraging-adl-and-how-does-it-work-360033525471) — Binance, 2026-01-13
5. [Insurance Fund](https://www.bybit.com/en/help-center/article/Insurance-Fund) — Bybit, 2026-03-24
6. [Auto-Deleveraging (ADL) Mechanism](https://www.bybit.com/en/help-center/article/Auto-Deleveraging-ADL) — Bybit, 2026-04-13
7. [Get Insurance Pool, V5 market endpoints](https://bybit-exchange.github.io/docs/v5/market/insurance) — Bybit, read 2026-09-26
8. [Auto-deleveraging: what it is and how it affects your positions](https://www.okx.com/en-us/help/iv-introduction-to-auto-deleveraging-adl) — OKX, 2026-08-11
9. [Liquidations](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/liquidations) — Hyperliquid, read 2026-09-26
10. [Auto-deleveraging](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/auto-deleveraging) — Hyperliquid, read 2026-09-26
11. [Liquidations](https://docs.dydx.xyz/concepts/trading/liquidations) — dYdX, read 2026-09-26
12. [Data FAQ — which exchanges support the liquidations data type](https://docs.tardis.dev/faq/data) — Tardis.dev, read 2026-09-26

*Last updated 2026-09-26. A reference page, corrected in place — not a dated post.*