Liquidations
Liquidations on Aurora
A liquidation event occurs when a trader’s positions move against them and their account equity falls below the required maintenance margin.
Maintenance Margin Defined as half of the initial margin at maximum leverage (ranging from 3x to 40x depending on the asset).
At 40x leverage, maintenance margin = 1.25%.
At 3x leverage, maintenance margin = 16.7%.
Liquidation Process
Initial Attempt via the Order Book
When account equity drops below maintenance margin, Aurora attempts to close the position(s) by submitting market orders for the entire size of the position.
If closed fully or partially and equity rises above maintenance margin, the trader keeps any remaining collateral.
Backstop Liquidation
If equity falls below ⅔ of maintenance margin without successful closure through the book, liquidation is executed through the Liquidator Vault.
Cross vs. Isolated Backstop Liquidations
Cross Margin
All cross positions and cross margin are transferred to the liquidator.
If no isolated positions exist, the trader’s account equity is reduced to zero.
Isolated Margin
Only the liquidated isolated position (and its margin) is transferred.
Cross positions and cross margin remain unaffected.
⚠️ Note: During backstop liquidation, the maintenance margin is not returned. This ensures the Liquidator Vault maintains profitability. To avoid liquidation risk, traders should use Stop Loss (SL) orders or exit early.
Mark Price for Liquidations
Aurora uses the mark price—a weighted measure combining external CEX prices with Aurora’s on-chain order book—rather than last trade price.
This prevents manipulation and ensures fairness.
During high volatility or with high leverage, the mark price may deviate significantly from book price.
Traders should monitor positions using the exact liquidation formula for precision.
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