Margin

Margining on Aurora

Aurora’s margin system follows principles similar to major centralized derivatives exchanges, while maintaining transparency and flexibility in a fully on-chain environment.

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Margin Modes

When opening a position, traders can choose between two margin modes:

• Cross Margin (default)

  • Collateral is shared across all cross margin positions.

  • Provides maximum capital efficiency, as unrealized profits from one position can support margin requirements for others.

  • Liquidation in one asset may affect all cross positions.

• Isolated Margin

  • Collateral is dedicated to a single asset or position.

  • Limits risk, since liquidations in that market do not impact cross margin or other isolated positions.

  • Additional collateral can be added or removed after opening.

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Initial Margin & Leverage

• Leverage Settings

  • Traders may select leverage from 1× up to the maximum allowed per asset (ranging from 3× to 40×).

• Initial Margin Requirement

  Initial Margin=Position Size×Mark PriceLeverage\text{Initial Margin} = \frac{\text{Position Size} \times \text{Mark Price}}{\text{Leverage}}Initial Margin=LeveragePosition Size×Mark Price​

• Cross Margin Behavior

  • Initial margin is locked and cannot be withdrawn.

  • Unrealized PnL becomes available as initial margin for opening new positions.

• Isolated Margin Behavior

  • Traders can adjust margin after opening (add/remove collateral).

  • Unrealized PnL is applied as additional margin to the active position.

⚠️ Note: Leverage is only enforced when opening a position. Afterwards, users must manage positions to avoid liquidation. Options include:

• Closing part or all of the position.

• Adding margin (isolated).

• Depositing additional USDC (cross).

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Unrealized PnL & Transfer Margin Requirements

• Unrealized PnL can be withdrawn from both cross and isolated positions if:

  • Remaining margin ≥ 10% of total notional position value, and

  • Remaining margin ≥ initial margin requirement.

• Formula:

  Transfer Margin Required=max⁡(Initial Margin Required, 0.1×Total Position Value)\text{Transfer Margin Required} = \max(\text{Initial Margin Required},\ 0.1 \times \text{Total Position Value})Transfer Margin Required=max(Initial Margin Required, 0.1×Total Position Value)

• Transferring includes any action that removes margin outside of trading (e.g., withdrawing funds, moving to spot wallet, or isolated margin transfers).

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Maintenance Margin & Liquidations

• Maintenance Margin

  • Defined as 50% of the initial margin at max leverage.

  • Varies per asset depending on leverage tiers.

• Cross Positions

  • Liquidated when:

    Account Value (including PnL)<Maintenance Margin×Total Open Notional\text{Account Value (including PnL)} < \text{Maintenance Margin} \times \text{Total Open Notional}Account Value (including PnL)<Maintenance Margin×Total Open Notional

• Isolated Positions

  • Liquidated under the same rule, but only using the isolated margin and notional value of that specific position.