Maintenance Margin
The minimum collateral required to keep a leveraged position open.
What is Maintenance Margin?
Maintenance margin on a Perp DEX is the minimum amount of collateral a trader must hold in their position to avoid liquidation. It is typically a percentage of the position’s value, lower than the initial margin. For example, dYdX might require a 5% maintenance margin for a $10,000 position, meaning the trader needs at least $500 in collateral to keep the position open.
If the position’s value falls due to market movements and the margin drops below this threshold, the smart contract triggers liquidation. Traders can add more funds to meet the maintenance margin and avoid closure. This mechanism ensures the protocol’s stability by preventing undercollateralized positions.
Related Terms
Ledger
An immutable, distributed digital record of transactions maintained across network nodes.
Slippage (DEX)
Slippage on a decentralized exchange (DEX) is the difference between the expected price of a token trade and the actual executed price, caused by market volatility or insufficient liquidity in a pool.
DeFi
Decentralized Finance (DeFi) refers to financial applications built on a blockchain that operate without centralized intermediaries, using smart contracts to enable trustless lending, borrowing, trading, and more.
CLOB (Central Limit Order Book)
A trading mechanism that matches buy and sell orders for assets based on price-time priority, commonly used in both traditional and decentralized exchanges.
Consumer Price Index (CPI)
A monthly measure of average price changes in a fixed basket of goods and services purchased by urban consumers, produced by the Bureau of Labor Statistics.
Hong Kong's policy statement on development of digital assets
Government declarations outlining Hong Kong's strategy to become a global hub for digital assets, starting with the initial statement in October 2022 and followed by Policy Statement 2.0 in June 2025.