A liquidation is a forced close. When the market moves against your position and your collateral drops below the maintenance threshold, the protocol closes the trade automatically to prevent losses from exceeding what you posted.
On LeverUp, liquidation triggers when your collateral ratio falls below 15% of the position's notional value. The oracle price that determines this is sourced from Pyth Pro — the institutional feed tier with sub-100ms staleness. The liquidation price is fixed, deterministic, and visible before you open the trade.
Understanding exactly when and why this happens lets you manage positions intentionally instead of getting caught by surprise.
The Setup: Margin, Leverage, and Your Collateral Buffer
When you open a position on LeverUp, you post collateral and choose a leverage multiplier. The protocol calculates your position size from those two inputs:
Position Size = Collateral × Leverage ÷ Entry Price
Example: You deposit $1,000 LVUSD and open a 10x long on BTC at $100,000.
- Position size: $1,000 × 10 = $10,000 notional
- BTC quantity: $10,000 ÷ $100,000 = 0.1 BTC
You now control 0.1 BTC worth of exposure. A 5% increase in BTC price creates a $500 profit (50% return on your $1,000 collateral). A 5% decline creates a $500 loss — half your collateral gone.
The Liquidation Price: Exact Formula
LeverUp liquidates a position when the remaining collateral falls to 15% of the notional value. Fees are factored in at entry.
For a long position:
Liquidation Price = Entry Price − (Collateral × 85% − Fees) ÷ Position Size
For a short position:
Liquidation Price = Entry Price + (Collateral × 85% − Fees) ÷ Position Size
Continuing the example above (10x long, $1,000 collateral, entry at $100,000, ignore fees for simplicity):
Liquidation Price = $100,000 − ($1,000 × 0.85) ÷ 0.1
= $100,000 − $850 ÷ 0.1
= $100,000 − $8,500
= $91,500
BTC needs to fall from $100,000 to $91,500 — an 8.5% decline — before your position gets liquidated. That's your buffer.
At higher leverage, the buffer shrinks proportionally. At 100x with the same $1,000:
Position Size = 1,000 × 100 ÷ 100,000 = 1 BTC
Liquidation Price = $100,000 − ($850) ÷ 1 = $99,150
A 0.85% decline triggers liquidation. This is what "100x leverage" means in practice — you're operating with almost no room for adverse movement.
The Role of the Oracle
Every liquidation check on LeverUp reads from the Pyth Pro price feed — the institutional tier of the Pyth oracle network.
This matters for one specific and common reason: wick liquidations.
A wick liquidation happens when the oracle price briefly registers a price that your mark-to-market calculations show as a liquidation trigger, but the actual market never really traded there at size. On venues using slow oracles (1–2 seconds of staleness), this happens more often than traders expect — the oracle is playing catch-up to a move that's already recovering.
Pyth Pro samples at sub-100ms staleness. In testing on Monad mainnet, 91.4% of Pro samples showed zero staleness — the price the chain read matched the live market at that moment. Core averaged 1.676 seconds of lag across the same window.
The practical implication: liquidation triggers on LeverUp reference a price that's current, not a delayed snapshot. You don't get liquidated on a wick that "wasn't really there."
A Full Example, Start to Finish
Setup:
- Asset: ETH
- Entry price: $3,000
- Collateral: $500 LVUSD
- Leverage: 20x
- Position size: $500 × 20 = $10,000 notional → 3.333 ETH
- Open fee (0.045%): $4.50
Liquidation price calculation:
Liquidation Price = $3,000 − (($500 − $4.50) × 0.85) ÷ 3.333
= $3,000 − ($495.50 × 0.85) ÷ 3.333
= $3,000 − $421.18 ÷ 3.333
= $3,000 − $126.36
= $2,873.64
ETH needs to fall from $3,000 to $2,873.64 — a 4.2% decline — before the position closes.
What happens at liquidation:
- The position is closed at the mark price
- Remaining collateral (approximately the 15% maintenance margin) is used to cover the protocol's settlement cost
- The rest, if any, is returned to you
What Happens to Your Collateral When You're Liquidated
You don't lose everything. When the liquidation triggers:
- The position closes at the current oracle mark price
- The protocol retains enough to cover the maintenance threshold
- Any remaining balance above that threshold is returned to your account
At 15% maintenance, a 100x position has almost no remaining collateral at the point of liquidation — nearly all of it has been consumed by the adverse price move. At lower leverage (5x, 10x), there's typically more left over.
High leverage at high leverage → liquidation returns close to zero.
Moderate leverage → liquidation still returns a meaningful residual.
Five Ways to Stay Out of Liquidation Range
1. Size positions as a percentage of your total portfolio, not per-trade
A 10x position on 10% of your portfolio is $X at risk. The same 10x on your full portfolio is 10X at risk. Treat leverage and position size as two separate decisions.
2. Know your liquidation price before you open
LeverUp's interface shows you the liquidation price on the order entry screen. Before you submit, ask: is that price plausible given current volatility? If BTC regularly moves 8% intraday and your liquidation is 8.5% away at 10x, you're cutting it close.
3. Use stop-losses above liquidation
A stop-loss is a voluntary close at a price you set. Placing one above your liquidation price means you exit cleanly with remaining collateral instead of waiting for the forced close.
4. Watch funding rate direction
High positive funding means longs are paying shorts to hold positions. If you're long in a high-funding environment, your effective cost of holding increases every epoch. This doesn't directly affect liquidation price, but it eats into collateral over time.
5. Add collateral or reduce size if the market moves against you
You can add collateral to an open position to push the liquidation price further away. You can also partially close to reduce exposure. Both are options if you're being tested and want to manage risk without closing entirely.
Zero-Fee Liquidations at High Leverage
One specific design choice worth knowing: on LeverUp, positions closed at 500x–1001x leverage that close at a loss pay zero fees. No open fee, no close fee on the losing side.
Most protocols charge the same fee structure regardless of outcome. LeverUp's position is that charging fees on losing high-leverage positions — where statistically most trades will end — is misaligned with the trader-first model.
If your 1000x position gets liquidated, you don't owe an additional fee on that loss.
Trade on LeverUp — and know exactly where your liquidation sits before you open: app.leverup.xyz
