What happens to the BitMEX insurance fund in the event of a large liquidation?

3 answers

• rameena ibrahimSep 20, 2023 · 2 years ago
  The BitMEX insurance fund is designed to protect traders from the risk of auto-deleveraging. When a trader's position is liquidated and there are not enough funds in the liquidation engine to cover the losses, the insurance fund steps in to make up the difference. It acts as a buffer to ensure that all traders' positions are settled at a fair price, even in extreme market conditions. The fund is funded by a portion of the fees collected from trading on BitMEX. In the event of a large liquidation, the insurance fund will be used to cover the losses and ensure that the liquidation process is completed smoothly.
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• PatereMar 29, 2025 · 3 months ago
  When a large liquidation occurs on BitMEX, the insurance fund plays a crucial role in maintaining the stability and integrity of the platform. The fund is used to cover any losses that exceed the available funds in the liquidation engine. This helps prevent auto-deleveraging, which can lead to unfair liquidations and potential losses for traders. The insurance fund is replenished through fees collected from trading activities on BitMEX. In the event of a large liquidation, the fund will be utilized to cover the losses and ensure that all traders are treated fairly.
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• Love YouFeb 29, 2024 · a year ago
  The BitMEX insurance fund is an important mechanism that protects traders from the risk of auto-deleveraging during large liquidations. It acts as a safety net, ensuring that all traders' positions are settled at a fair price. The fund is funded by a portion of the trading fees collected on BitMEX. In the event of a large liquidation, the insurance fund will be used to cover any losses that exceed the available funds in the liquidation engine. This helps maintain market stability and ensures that traders are not unfairly impacted by extreme market conditions.
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