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Update to Margin Trading Liquidation Mechanism


In order to further enhance the user experience, KuCoin will update the liquidation system for Margin Trading at 00:00 on November 4, 2021 (UTC) with an introduction of a liquidity provider mechanism. The new Margin trading liquidation mechanism will improve the performance of risk controlling further, effectively prevent the occurrence of negative balances, and reduce the effect on users due to the extremely volatile market.

Dear KuCoin Users,

In order to further enhance the user experience, KuCoin will update the liquidation system for Margin Trading at 00:00 on November 4, 2021 (UTC) with an introduction of a liquidity provider mechanism. The new Margin trading liquidation mechanism will improve the performance of risk controlling further, effectively prevent the occurrence of negative balances, and reduce the effect on users due to the extremely volatile market.

Old mode New mode Advantages
After the debt ratio reaches the liquidation line (97%), the liquidation process will be trigged to take over the positions systematically and automatically, then match a deal in the secondary market and close the positions, at last, repay the debts. After the debt ratio reaches the liquidation line (97%), the liquidation process will be triggered by the system, then take over the positions in the combination model of the secondary market matching mechanism and the liquidity provider mechanism to close the positions, at last, repay the debts. 1.Effectively control the dramatic impact of the market caused by large orders.

2.Negative balances will not happen anymore in users’ accounts. The negative balances will be taken over by both the liquidity providers and the Magin Risk Funds.

Note:

1. Under the new Liquidation Mechanism, there will be two types of transaction records in trading history caused by the secondary market matching mechanism and the liquidity provider mechanism separately, which has no impact on users’ accounts.

2. The only difference between the two modes is the internal control of the system. The system will determine the best takeover mode based on the market conditions, which has no impact on users.

3. This upgrade will gradually switch from the old to the new mode. It will take 3-5 days. During the upgrade, the whole system will operate normally and well. There is no effect on the use and transactions of users in Margin.

Kind Remind: Debt Ratio is the key to your risk control and survival in the fluctuating market. You can refer to the Debt Ratio is the Key to Affect Your Profit or Loss to learn more about the debt ratio. As PEOPLE’S EXCHANGE, we will continue to optimize and improve the user experience!

Thank you for your support!

The KuCoin Team




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