Bitbase Hedge Mode at the edge

The trigger: MMR, measured on Mark Price

Bitbase measures liquidation risk with the Maintenance Margin Ratio:

MMR = Maintenance Margin Requirement / Effective Margin Equity x 100%

The higher it climbs, the closer you are. At 100% the liquidation process starts. The check runs on Mark Price, not the last traded price, so a position can enter liquidation while the chart's last price has not reached the estimated liquidation price shown on the position page.

At the check on Nov 4 (about 3:58 PM ET) the BTC-USDT perp showed last 80,114.0 and mark 80,114.2, only 0.2 apart on a calm tape. In a fast wick that gap can open wide, and that is exactly when the difference between your chart line and your liquidation line matters.

Step 1: cancel open orders

Open orders that occupy margin or affect position risk are canceled first, and the released margin goes into a fresh MMR calculation. In Isolated Margin, only orders tied to the at-risk position go. In Cross Margin, relevant orders across the contract account go, including ones linked to isolated positions. If MMR drops below 100%, the process ends here.

Step 2: net hedged positions

If you are in Hedge Mode with both a long and a short on the same contract, the system nets the portions that offset each other. That cuts total position size and the maintenance requirement, and then risk is recalculated. If it is resolved, the process ends.

Worked with today's numbers, per 1 BTC on each side: from the 24h open of 77,877.8 to the 80,114.2 mark, the long is up 2,236.4 USDT and the short is down 2,236.4. Net price exposure is zero, yet both legs still carry margin requirements. Funding behaves the same way: at the -0.006509% per 8 hours shown at an earlier check (about 3:54 PM ET), the short pays about 5.21 USDT per BTC at that mark and the long receives about the same, so the legs cancel there too. Netting 1 long against 1 short removes both legs. With unequal legs, only the smaller size offsets, and the remainder stays open as a one-sided position.

Step 3: partial liquidation (tier 2 and up)

Positions in risk-limit tier 2 or above are cut straight down to the maximum size permitted in tier 1, and MMR is recalculated. Below 100%, the rest of the position survives.

Bitbase can skip this step and go straight to step 4 in four cases:

• MMR has reached 160%.
• The position is already in the lowest tier with no cancellable orders.
• MMR would still be at or above 100% even at the lowest tier.
• Margin equity is below 0.

Step 4: Insurance Fund takeover

Whatever is left is taken over by the Insurance Fund account at the bankruptcy price and handled in the market. If the fund cannot absorb the loss, Auto-Deleveraging (ADL) can reduce opposing positions. There is no fee for ADL.

Cross vs Isolated in one line each

• Cross: equity is shared, so a loss, a transfer or a new position anywhere in cross can move every cross position closer.
• Isolated: each position is assessed on its own, and Auto-Margin Replenishment, if enabled, adds margin from available balance first. It does not guarantee you avoid liquidation.

Common mistakes

• Watching last price for your liquidation level. The trigger is Mark Price.
• Thinking a perfect hedge cannot be liquidated. Netting reduces size and maintenance; fees, unequal legs and other cross positions still count.
• Expecting resting orders to survive. Step 1 cancels them before anything else.
• Reading the estimated liquidation price as fixed. In cross it moves with everything in the account.

FAQ

Q: Does netting close my whole hedge? A: Only the portions that offset each other on the same contract.

Q: Will partial liquidation always happen before takeover? A: No. The four skip cases above go straight to takeover.

Q: Which coins does this cover? A: Every USDT perp. At the same check, ETH-USDT marked 2,418.31, XRP-USDT 1.302, SOL-USDT 94.74 and DOGE-USDT 0.07672.

Takeaway: in Hedge Mode, size the two legs on purpose. The unhedged remainder is what liquidation actually works on.