1. Liquidation Price Derivation
Let Q denote position quantity in base asset units, P_entry the fill price, M the allocated margin, MMR the maintenance margin rate for the active notional tier, and Cum the cumulative maintenance deduction amount.
At forced liquidation, the remaining equity of the position exactly equals the required maintenance margin:
For a Long position, position equity decreases as mark price falls:
2. Tiered MMR Brackets & Cumulative Offset
When notional value transitions across brackets, exchanges apply a progressive tax schedule similar to income tax brackets. Without the cumulative deduction amount ($Cum$), crossing a tier boundary would trigger an instantaneous liquidation discontinuity.
| Tier | Notional Range (USDT) | MMR | Cum Deduction | Max Leverage |
|---|---|---|---|---|
| Tier 1 | $0 to $50,000 | 0.40% | $0.00 | 125x |
| Tier 2 | $50,000 to $250,000 | 0.50% | $50.00 | 100x |
| Tier 3 | $250,000 to $1,000,000 | 1.00% | $1,300.00 | 50x |
| Tier 4 | $1,000,000 to $5,000,000 | 2.50% | $16,300.00 | 20x |
3. Cross Margin Mathematical Mechanics
In Cross Margin mode, the allocated margin M in the liquidation formula is substituted with the trader's total effective account equity W_balance, adjusted for unrealized PnL across all other active positions.
This substantially broadens the liquidation distance, but creates portfolio contagion: a sudden liquidation in one illiquid pair will consume the collateral protecting other open positions.