> For the complete documentation index, see [llms.txt](https://nobots.gitbook.io/nobots-gitbook/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://nobots.gitbook.io/nobots-gitbook/trading/liquidations-and-adl.md).

# ⚡ Liquidations and ADL

### Liquidations and ADL

This page covers liquidation mechanics, Auto-Deleveraging (ADL), and trading risks specific to the NoBots protocol.

#### 💥 Liquidations

A position is liquidated when its remaining collateral—after accounting for unrealized losses, accrued fees, and capped negative price impact—falls below the market's minimum collateral threshold.

This threshold ranges from 0.25% to 1% of position size, depending on market configuration. NoBots uses the following logic:

* Long Positions: Calculated using the minimum index price ($$minPrice$$).
* Short Positions: Calculated using the maximum index price ($$maxPrice$$).
* Collateral Value: Always uses the minimum collateral token price ($$collateralTokenPrice\_{min}$$), regardless of position side.

> ⚠️ \[!WARNING]
>
> Your liquidation price is not static. Borrow fees and funding fees accumulate over time, moving the liquidation price closer to the mark price. You can deposit additional collateral using the "Edit" button to improve your buffer.

#### 🛡️ Minimum Collateral Floor & Leverage Limits

The protocol enforces strict rules for liquidation based on absolute collateral floors and maximum leverage thresholds. Your position will be liquidated if it triggers either of these limits.

🎯 Liquidation Triggers

* Minimum Collateral: Your remaining collateral drops below the absolute floor of $1.
* Maximum Leverage: Your leverage exceeds 200x.
* WLD Exception: For Worldcoin (WLD) positions, liquidation occurs at 100x leverage.

📉 How the $1 Floor Affects Small Positions

For small trades, the $1 absolute floor dominates the liquidation requirement. Because the protocol must reserve at least $1 of your collateral as the required minimum, it leaves very little buffer against price movements and accumulated fees. This causes smaller positions to face liquidation much closer to their entry price than their leverage alone would suggest. For larger positions, the maximum leverage limits (200x, or 100x for WLD) take over as the primary liquidation factor.

#### 💸 Liquidation Fees

The liquidation fee is 0.3% of the position's notional size, deducted only when the position is closed.

#### ⚙️ Auto-Deleveraging (ADL)

ADL protects pool solvency by automatically reducing profitable positions when the ratio of pending PnL to pool value exceeds the market's `MAX_PNL_FACTOR_FOR_ADL` threshold.

This is most common in synthetic markets where the index token (e.g., a volatile token) rises significantly faster than the pool's collateral (e.g., WETH). If ADL is triggered, your position may be partially or fully closed without your manual intervention to preserve the integrity of the liquidity pool.

#### 🚨 Trading Risks

NoBots operates on World Chain and utilizes automated smart contracts. While the system is designed for robustness, the following risks remain:

* Smart Contract Risk: Potential vulnerabilities in the protocol code.
* Liquidation Risk: Rapid market moves or accumulated fees can lead to total collateral loss.
* Stablecoin De-pegging: If a stablecoin used for collateral drops below $1 USD, settlement prices may deviate from expected values.
* Oracle Spread: Price Data Stream prices include a bid/ask spread that may not be perfectly anchored to a $1.00 peg during high volatility.


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