Liquidation Trigger

When collateral, leverage, and market conditions no longer support the open position.

Liquidation occurs when:

Underlying price ≥ liquidation price (YES)

Underlying price ≤ liquidation price (NO)

Once triggered:

1. The position is closed.

2. The hedge is unwound.

3. Remaining collateral is credited to the user.

4. The terminal updates the user’s account immediately.

There are no hidden conditions or discretionary rules.

Terminals receive a continuous feed of:

• current liquidation price,

• current buffer (distance to liquidation),

• recommended collateral top-ups.

When the buffer drops below thresholds:

• Warning 1: Margin Call

  The terminal prompts the user to either add collateral or reduce exposure.

• Warning 2: Imminent Liquidation

  Displayed when price is within a narrow band of the liquidation price.

Once liquidation is triggered:

1. Multiply executes the hedge unwind within configured slippage bounds.

2. Synthetic position is marked closed at the liquidation price.

3. Any remaining collateral is returned on Solana.

4. The terminal reflects final PnL.

If liquidity is insufficient for immediate unwind, Multiply enters a protected unwind mode and pauses new exposure until safe execution is possible.