Huobi DM, a cryptocurrency derivatives exchange from Huobi Group, recently announced the launch of a new liquidation mechanism to systematically minimize user exposure during times of market volatility.
To help users hedge against liquidation risk; Huobi DM now provides partial liquidation, a system that gradually reduces a user’s positions rather than liquidating them in full in a single event.
With the new mechanism, the platform will automatically start liquidating a user’s positions in stages at predetermined margin ratios; determined by the user’s calculated exposure—until the margin ratio reaches above zero. The liquidation process also includes a circuit breaker function that halts liquidation when large or unusual deviations between the liquidation price and market price are detected.
All coins and leverages on Huobi DM are supported by partial liquidation. Huobi DM also lowered its overall adjustment factor also called the maintenance margin ratio. This is a key liquidation indicator that directly impacts how margin ratios are calculated; to reduce the frequency of liquidation events.
Exchange Improvements for Future Products
In addition to the new liquidation mechanism, Huobi DM recently installed a firmware update (V 3.3.0). The upgrade increases transaction throughput by over 50%, and doubles system response speed.
Later this month, Huobi DM will launch perpetual swaps with up to 125X leverage; starting with support for BTC swaps. As Huobi DM expands into new markets in 2020, other products in the pipeline include an OTC loan service and options trading.