Quote from: AdolfinWolf on August 18, 2019, 11:23:29 AM

Quote from: mxnicula on August 18, 2019, 07:33:03 AM

Similarly when comparing a Buy order at the same price of 9000$ but with 100X leverage, the liquidation price on BitMEX is 8957$, while the same value for DMEX stands at 8910$! The higher the leverage, the higher the proportional difference. In the 100X case, the distance from price to liquidation is more than TWICE! higher on DMEX (90$ compared to 43$).

Okay, but how? Why can you offer a better liquidation price than Bitmex? What happens when there's a flash crash? You probably won't be able to market sell those 100x leveraged longs, and thus lose a lot of money..

Or am i missing something?

Hi, thanks for the question!

Although visibly DMEX looks and operates exactly as a centralized exchange, it has a different underlying structure.

Whenever a trade is performed, it is performed between two traders in a P2P decentralized fashion.  So lets take for example two traders, one is going long Bitcoin at 10000 USD and 5x leverage and another trader is going short bitcoin at 10000 USD with 5x leverage. A contract is created between the two, each one putting up 2000 USD as collateral and having their liquidation prices at 8000$ and 12000$ respectively.  So if the price goes above 10000$ the Short pays the Long, and if the price goes below 10000 the Long pays the Short. This way there is no need to have a reserve added to the liquidation price to mitigate liquidity risks because the loss and the profit are already fully collateralized.