ADL

Auto-Deleveraging (ADL) is a risk control mechanism that automatically reduces the position of profitable traders in extreme market conditions, to ensure the platform remains solvent.

ADL is triggered only as a last resort. To minimize the need for ADL, StandX employs multiple layers of protection:

• Liquidated positions are first processed through the order book.
• Remaining positions are then absorbed by the platform’s vault.
• ADL is activated only when both mechanisms are exhausted.

When ADL is triggered, traders are ranked based on Leverage and Unrealized PnL. Traders with the highest risk-adjusted returns (high leverage + high PnL) are more likely to be selected for ADL.

While ADL can impact profitable traders, it is a crucial safeguard to ensure platform stability and long-term trustworthiness. StandX is committed to minimizing the frequency and impact of ADL through optimized risk engine design and deep liquidity infrastructure.