The unified margin (UM) trading system has multiple risk control rules for borrowing and liability, which will be triggered sequentially when the risk indicators reach a specified level.
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Risk control rulesfor borrowing |
Trigger conditions |
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Auto repayment |
When the liability of a currency exceeds the borrowing limit (borrowing mode) or interest-free amount (non-borrowing mode) the system will trigger auto repayment and repay the liability. |
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| Order blocking | When BIT’s overall liability amount reaches the risk control limit, the system will restrict all new orders that increase the overall liability. | |
Auto repayment
In the UM mode, if the amount of liability in a currency exceeds the borrowing limit (borrowing mode) or interest-free amount (non-borrowing mode), the account will enter the auto repayment process. In this case, the system will automatically buy back the deficit currency using other available assets in the account to reduce the liability until the liability amount is within the borrowing limit or interest-free amount.
(1). Auto repayment amount
When auto repayment happens, the system will use available assets in the unified account to buy the liability currency to repay the liability*, so that the amount of the liability will be reduced to within the borrowing limit (borrowing mode) or the interest-free amount (no borrowing mode) after auto repayment.
*Note: To prevent the account from entering another repayment process in a short time, the actual amount of currency bought by the system will be slightly more than the amount needed to repay the liability.
(2). Auto repayment process
When auto repayment happens, the system will first buy back the deficit currency with the available USDT in the unified account. If the available balance of USDT is not enough to repay the liability, the system will sell other available assets* to buy USDT in a certain sequence, and then buy back the liability currency with USDT. In this process, the system will sell available assets in descending order of haircut ratio, and sell in descending order of available asset * currency index if the haircut ratio is the same. The auto repayment process will be terminated when the liability is within the borrowing limit or interest-free amount.
*Range of other available assets: Collateral currencies with available assets greater than 0 (collateral i.e. currencies with a haircut ratio of less than 100%).
(3). Auto repayment fees
The system trading fees generated during the auto repayment process will be charged at the user’s actual spot trading rate.
Order Blocking
If all user’s total liabilities of a currency exceed BIT’s risk control limit, BIT will block all new orders that attempt to increase liability for that currency (existing orders will not be affected). In this case, BIT will notify all customers who have turned on the borrowing mode. Besides, you can replace orders when the lending market is stable again.