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▶ General Rules

Support Staff
  • Updated

  1. Balance and deposit/withdrawal

    You can deposit cryptocurrency as collateral before margin trading begins, like USDT, BTC, and ETH. WOO X defines the collateral ratio for each token, which represents the equivalent USDT value as your equity. The collateral ratio of USDT is 1 and some tokens don’t count towards collateral. (Collateral ratio for supported tokens)  

    Account assets will be displayed in the Wallet section of the account. A positive balance indicates that the account has a surplus of that asset, and a negative balance indicates that the account borrows that asset.

  2. Leverage

    By default, most deposited assets can be used as margin with discounts to conduct leverage trading on WOO X. The initial leverage is 3x, you can select up to 5x leverage. Note that the available leverage will change according to your position size, the available leverage could be down to 3x.

  3. Equity and Exposure

    Equity represents the total value of all your assets with discounts. Exposure is the sum of total opened positions and pending orders and excludes USDT. The detailed formula defines below: 
      1. Equity = SUM ((Balance.i - Interest.i)* Market price.i*discount.i), including all currencies. USDT price is always 1, and the collateral ratio of any negative tokens is 1.
      2. Exposure = SUM (ABS (Balance.i * Market price.i) + SUM (ABS (pending orders.ij) * Open price), including all currencies with exclusion of USDT.
      3. For instance, you have 1 BTC (40,000 USDT and collateral ratio is 0.9) and 10,000 USDT (collateral ratio is 1) and select the maximum of 5x leverage. If you short 10 ETH at $3,000, which is a total of $30,000, then your USDT becomes 40,000. Your equity is 1 BTC * 40,000 * 0.9 + 40,000 USDT * 1 * 1 - 10 ETH * 3000 = 46,000 USDT; your exposure is 1 BTC * 40,000 + abs(-10) * 30,000 = 70,000 USDT.

  4. Margin ratio

    The margin ratio defines your risk level of equity relating to exposure. A higher margin ratio will lead to a lower risk level. 
      1. Margin ratio = (Equity / Exposure) * 100%
      2. Margin usage rate = 100% / (Margin ratio * Maximum leverage)
      3. Buying power = Equity * (1 - Margin usage rate) * Maximum leverage
      4. Let’s take the previous instance, margin ratio is (46,000 / 70,000) * 100% = 65.7%. The Margin usage rate = 100 / (65.7% * 5) = 0.3, then buying power is 46,000 * (1 - 0.3) * 5 = 161,000. 

  5. Interest

    With margin trading, any negative balances will start accruing interest hourly and continue accruing interest until the balance is zero or positive. Interest owed is based on the maximum amount borrowed in each hourly period. The interest calculation is based on the following formula:

    Interest on the hour = Max (Borrowed assets on the hour) * Interest rate on the hour

    You need to repay in the same coin as what you borrowed. You can choose to manually repay interest under the Wallet tab or pay interest and borrowed funds at the same time by closing the position. Every 24 hours, the system will automatically repay the accrued interest by default. If the user does not have enough balance of the borrowed token to repay the interest, the system will convert the balance of the token with the highest balance to repay the outstanding interest owed. 

    For instance, if you borrow 100 and 500 USDT to long BTC respectively at 15:02 and 15:20, the interest starts calculating at 15:02 with your -100 USDT. Your total USDT becomes -600 at 15:20. If you close all BTC positions, your USDT returns to positive, then the interest is calculated based on the maximum borrowed USDT on the hour, which is 600 USDT. If you close your BTC positions at 16:00, the interest will accrue 2 times with 600 USDT as a base. Daily interest is the total of 24 times of interest accrued per hour. 

    The interest rate of each token adjusts every hour based on overall supply and demand. You can query the real-time interest rate under the Account info tab or via API. 

  6. Margin calls and Liquidation

      1. The default margin ratio sets as 1,000%, indicating you haven’t opened any position. The more exposures you open, the lower your margin ratio is.
      2. Initial Margin Ratio: If the margin ratio drops to hit the Initial Margin ratio, which is equal to 100% divided by your maximum leverage, indicating you have used up all your funds. You can not open more positions or withdraw while restricted but can close positions and deposit assets to raise your margin ratio. 
      3. Maintenance Margin Ratio: If your margin ratio falls below your Maintenance Margin ratio, which is 10%, your account will trigger liquidation, and the liquidation engine will take over the account. To significantly save your positions from liquidation, WOO X utilizes a three-step liquidation process: 
          1. The system will cancel your pending orders carefully to minimize impact. If canceling pending orders causes its margin ratio to increase back above or equal to 10%, the liquidation ends. 
          2. If the margin ratio is still below the maintenance margin ratio, the liquidation engine will aim to close down 50% of the current position of the account with IOC (Immediate Or Cancel) orders. The liquidation engine retreats if partial liquidation causes its margin ratio to rise above 10%. 
          3. If the margin ratio drops below 10% again within one hour, the account will begin to fully close down against the liquidation engine. The liquidation engine will try to close down all positions at the bankruptcy price and the liquidity provider will kick in to take over the remaining orders if all positions can not be closed down. The account’s balance becomes 0. 
      4. The three-step liquidation process significantly reduces the likelihood of the user's account being completely reduced to zero when triggering liquidation. In the event of a full liquidation, WOO X protects the liquidity of the order book by transferring the remaining positions to the liquidity provider; therefore, the system significantly reduces the possibility of cascading liquidations in the market. 

  7. Contact us

    For technical consultation, please communicate directly with the WOO X team or contact us by email ( support@woo.network ) or submit a ticket.

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