Deferred Payment System
- In the event that the Insurance Fund for a given contract has been depleted, ACDX’s Deferred Payment System will kick in to ensure the solvency of the exchange and clearinghouse.
- The Deferred Payments will be made to all traders who have a positive unrealized PNL in that contract. Each contract will have a segregated insurance fund.
Calculations for Deferred Payment
- X = realized losses of a contract that need to be made by the exchange to cover any shortfall
- Y = sum of unrealized gains in that contract
- L = X/Y; L is the percentage that needs to be taken
- For each trader with unrealized profits (UP): DP = - L * UP
- A Deferred Payment (per contract) is added to their account balance as a separate line item.
Thus, user cannot withdraw this from their account if it will take them below initial margin levels
- This is used in the calculation for Net Liquidation Value. This may cause some traders to fall short of their margin levels and be force liquidated.
- Deferred Payments will be brought to 0 with partial payments from future liquidation fees of that contract.
Even after the insurance fund pays out, there is a $100,000 shortfall in the ETH perpetual contract. The unrealized gains in that contract equal $5,000,000
- X = 100,000
- Y = 5,000,000
- L = 2% (100,000/5,000,000)
- For all traders with positive PNL: DP = - 2% * UP
Account Balance Summary looks like:
|Unrealized PNL (USD)||1000||1000|
|Deferred Payment (ETH Perpetual Futures)||-0.2||-20|
|Net Liquidation Value||40,980|
ACDX will credit the account (and reduce Deferred Payment) to bring Deferred Payment balances to 0 over time.