Margin (Perp Dex)
Collateral deposited to open and maintain leveraged trading positions.
What is Margin (Perp Dex)?
Margin is the amount of capital (usually in stablecoins or digital assets) a trader deposits to open a leveraged position on a Perp DEX. It acts as collateral to cover potential losses and is divided into initial margin (required to open a position) and maintenance margin (needed to keep it open). For example, dYdX may require a 10% initial margin for a 10x leveraged trade, meaning $1,000 controls a $10,000 position.
Margin is held in a smart contract and monitored in real-time. If the market moves against the trader’s position and the margin falls below the maintenance threshold, the position risks liquidation. Perp DEXs allow users to add more margin to avoid liquidation, but unlike centralized platforms, all processes are transparent and non-custodial.
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