Margin System
OrangeBit implements a dual-margin system — Cross Margin and Isolated Margin — providing traders with flexibility in capital allocation, risk exposure, and liquidation control.
This hybrid structure ensures efficient capital utilization while maintaining strict on-chain transparency and user custody.
Cross Margin Mode
In Cross Margin, all available collateral in the trader’s account is shared across every open position.
This mode maximizes capital efficiency and minimizes liquidation risk during short-term volatility, as unrealized profits from one position can offset potential losses in another.
Key Characteristics:
Shared Collateral: All active positions draw from a unified collateral pool.
Dynamic PnL Offsetting: Gains from profitable positions can cover margin shortfalls in losing ones.
Higher Capital Efficiency: Allows traders to utilize funds more effectively without manually redistributing margin.
Increased Risk Exposure: If overall account equity drops below the maintenance margin requirement, multiple positions may be liquidated simultaneously.
Best Suited For: Advanced traders or algorithmic strategies seeking portfolio-level margin optimization.
Example:
A user holds both a long BTC-USDT and a short ETH-USDT position. If ETH price rises while BTC drops, the system automatically offsets BTC losses with ETH gains, reducing the chance of immediate liquidation.
Isolated Margin Mode
In Isolated Margin, each position has its own dedicated collateral balance that is independent from other trades.
Losses are contained within that position alone, ensuring the rest of the portfolio remains unaffected.
Key Characteristics:
Independent Collateral: Each position is funded separately with a defined margin amount.
Limited Risk Exposure: Liquidation of one position does not impact other open positions.
Manual Margin Adjustment: Users can add or remove margin per position to manage leverage dynamically.
Enhanced Risk Control: Ideal for traders who prefer predefined risk per trade or want to avoid cross-position contagion.
Best Suited For: Conservative traders, beginners, or those managing multiple independent strategies.
Example:
A user opens a 20× leveraged long on BTC-USDT using $200 margin in isolated mode.
If BTC moves against the user and the margin ratio falls below the maintenance threshold, only that BTC position will be liquidated, while other positions (e.g., ETH or SOL) remain intact.
Switching Between Margin Modes
Margin mode can be selected before opening a position.
Once a position is active, the margin mode (Cross / Isolated) cannot be switched until the position is closed.
OrangeBit’s interface clearly displays current margin utilization, available collateral, and liquidation thresholds in real time.
Comparative Overview
Collateral Pool
Shared across all positions
Dedicated per position
Risk Containment
Account-wide
Per-position
Margin Efficiency
High (dynamic allocation)
Moderate (fixed allocation)
PnL Offsetting
Allowed (cross-position)
Not allowed
Liquidation Scope
May affect multiple positions
Limited to individual position
Suitable For
Experienced or portfolio traders
Conservative or strategy-based traders
OrangeBit’s dual-margin framework combines flexibility and safety:
Cross Margin delivers capital efficiency and adaptive PnL management for professional users.
Isolated Margin provides compartmentalized risk management for precise control.
Both modes operate under OrangeBit’s non-custodial vault contracts, ensuring that margin management, liquidation logic, and PnL updates are fully transparent and verifiable on-chain — without any centralized custody or intervention.
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