// GLOSSARY

What is liquidation on SilkDEX?

Liquidation is the forced closing of positions when an account runs out of margin. On SilkDEX (Orderly Network) it happens when the account's margin ratio, measured with mark prices, falls below its maintenance margin ratio: Orderly cancels the account's open orders, freezes its USDC balance and transfers positions to liquidators at a discount until the margin ratio is back at the initial margin ratio.

Liquidation fees

Fee (on liquidated notional)	To the liquidator	Markets	Applies to
0.6%	0.3%	3	BTC, ETH and SOL
1.2%	0.6%	70	other Orderly-listed markets
1.5%	0.75%	64	community-listed markets

With enough margin left, half the fee goes to the liquidator and half to the insurance fund; when little margin remains the liquidator is paid first.

What happens, step by step

The account margin ratio, at mark prices, falls below the maintenance margin ratio.
Open orders are cancelled and the USDC balance is frozen.
Liquidators take over positions at a discount, partly or fully, until the ratio recovers to the initial margin ratio.
If the account's value goes below zero, the insurance fund absorbs the rest.

How to avoid it

Use leverage well below the market's cap.
Add USDC margin.
Set a stop-loss when you open the position.
Check the estimated liquidation price in the order panel before you trade; in cross margin all positions share one balance.

FAQ

What is the liquidation fee on SilkDEX?

It is charged on the liquidated notional: 0.6% on BTC, ETH and SOL, 1.2% on other markets, 1.5% on community-listed markets. With enough margin left, half goes to the liquidator and half to the insurance fund.

How is my liquidation price calculated?

It is the mark price at which your account margin ratio would fall to the maintenance margin ratio. In cross margin the balance is shared across positions, so it depends on your whole account; the order panel shows an estimate before you trade.

Source: Orderly: Liquidations. SilkDEX figures from Orderly's public API as of 2026-10-13.