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Liquidation Never Takes the Rest

On many centralized exchanges, a contract liquidation works like this: your equity hits the line, the position is market-closed, and nothing comes back — even the money still left in the account is confiscated. Everyone does it that way not because it's fair, but because nobody had an incentive to be good to users.

We don't do that: when a position is liquidated, what remains after debt and the liquidation penalty is returned to you.

The Rule in One Sentence​

Liquidation = deduct what you owe + the penalty, and the remainder goes back to the owner in full. We do not confiscate residual margin.

This is not a slogan; it is a hardcoded money flow, identical across all four liquidation paths:

  • Leveraged spot liquidation: the remainder returns to your account;
  • Perpetual full liquidation: same;
  • Perpetual partial (staged) liquidation: after each stage, that stage's remainder returns immediately — no waiting for the whole process to finish;
  • The portfolio-margin domain: released margin rejoins your account's free balance.

Every liquidation's money flow is on-chain: anyone can verify how much was returned, how much was charged, and where it went.

The Honest Boundaries​

  • What's returned is "what's left after deductions" — by definition your equity has fallen below the maintenance line, so the remainder is usually not much. This is not "profit from liquidation";
  • When equity is wiped out below zero, there is no remainder to return — that gap is backstopped by the insurance fund under fixed rules, and the fund's balance and every payout are equally verifiable on-chain (see the extreme-market defenses);
  • The liquidation penalty is capped by your remaining equity — it never drives the remainder negative.

Why It Matters​

The fairness of liquidation rules is invisible until the moment you're liquidated. Treating "confiscate the remainder" as the industry default leaves users no choice; we invert it: returned by default, provable on-chain. That is our answer to fair liquidation — we don't promise you profits; we promise not to loot you when you're down.