Introduction

How leverage and liquidation safety are determined across the platform.

The Multiply risk model determines:

• how much leverage can be offered,

• how much notional a user can take,

• how much total exposure a market can support,

• when margin requirements change, and

• when liquidation becomes necessary.

The model is built around one invariant:

At every moment, the system must be able to unwind the net hedge at a bounded and fully collateralized cost.

All computations flow from this requirement.