BETAWEB3

Liquidation, MMR

Maintenance Margin Ratio (MMR) is the minimum margin percentage required to keep a position open.

It is one of the core risk-control mechanisms in perpetual futures trading and determines when a position becomes eligible for liquidation.

Each perpetual contract has its own Maintenance Margin Ratio depending on:

  • Market volatility
  • Liquidity
  • Risk level of the asset

Higher-risk contracts usually have higher maintenance margin requirements.

Liquidation happens when the remaining margin becomes insufficient to support the position.

TTT uses Mark Price for liquidation calculations to reduce unfair liquidations during volatility spikes.

Higher MMR:

  • Higher liquidation risk
  • Closer liquidation price

Lower MMR:

  • More liquidation distance
  • Lower liquidation risk

How to check Maintenance Margin Ratio

You can check the Maintenance Margin Ratio from the contract information section of each perpetual market.

Maintenance Margin Ratio Example

Maintenance Margin

Maintenance Margin = Position Size × Maintenance Margin Ratio (MMR)

Example

Position:

  • Position Size: 20,000 USDC
  • Maintenance Margin Ratio: 10%

Calculation:

20,000 × 0.10 = 2,000 USDC

Result:

  • Required Maintenance Margin = 2000 USDC

The position must always maintain at least 2,000 USDC margin to avoid liquidation. If the remaining margin falls to this level, liquidation is triggered automatically using the Mark Price.

How Liquidation Works

Liquidation occurs when the remaining margin of a position falls below the required Maintenance Margin.

If remaining margin drops below the required level, the position is automatically liquidated using the Mark Price.

Example

  • Position Size: 10,000 USDC
  • Initial Margin: 500 USDC
  • Maintenance Margin: 50 USDC

If losses reduce remaining margin below 50 USDC:

  • Liquidation triggers automatically
  • The position is closed by the system to prevent further losses.

Liquidation Price Formula

Approximate Long liquidation price formula:

Liquidation Price = Entry Price × (1 − 1/Leverage + MMR)

Approximate Short liquidation price formula:

Liquidation Price = Entry Price × (1 + 1/Leverage − MMR)

Where:

  • Leverage = selected leverage
  • MMR = Maintenance Margin Ratio

Higher leverage:

  • Brings liquidation price closer

Lower leverage:

  • Moves liquidation price farther away

Adding Margin Effect

Adding more margin increases distance from maintenance margin requirement.

This:

  • Reduces liquidation risk
  • Moves liquidation price farther away
  • Improves margin ratio

Adding Margin Example

Current position:

  • Position Size: 2,000 USDC
  • Margin: 100 USDC

Current leverage:

2,000/100 = 20X

You add:

  • +100 USDC margin

New total margin:

  • 200 USDC

New leverage:

2,000/200 = 10X

Result:

  • Position size stays the same: 2,000 USDC
  • Effective leverage decreases from 20x → 10x
  • Lower leverage moves the liquidation price farther away (Liq price formula)
  • The position becomes safer against volatility