Isolated margin model

Trove uses Isolated Margin (not cross). Each position has dedicated collateral.

Key ratios

• IMR (Initial Margin Ratio):

  • minimum collateral to open a position. With max 5× leverage, IMR = 20%.

• MMR (Maintenance Margin Ratio):

  • collateral threshold below which liquidation begins (shown in the UI and may vary by market/volatility).

Ratio	What it means	Trove default
IMR	Minimum collateral to open a position	20% (at 5×)
MMR	Collateral threshold to keep a position open	10% of current notional

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Account equity & requirements

Equity = Balance + Unrealized PnL − Fees ± Funding
IM Requirement = Σ (IMR_asset × Notional_asset)
MM Requirement = Σ (MMR_asset × Notional_asset)

• Cross‑margin: equity and requirements are computed at account level across all positions.

• Health: Health = Equity − MM Requirement. Liquidation starts when Health ≤ 0.

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Position health (isolated)

Term	Plain meaning
Isolated margin	Collateral you posted to this one position
Unrealized PnL	Running PnL from entry to current mark
Maintenance requirement	10% of current position notional
Liquidation condition	If margin buffer drops below the maintenance requirement

What improves health

• Adding margin

• Reducing position size

• Price moving in your favor

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Safeguards & limits

Open Interest caps (per asset)

Cap type	Setting	Notes
Notional OI cap	$1,000,000 (initial)	New opens rejected at the cap
Size OI cap	1,000,000,000 base units	With szDecimals=2 → 10,000,000 units effective

Price-safety rails (engine-level)

Rail	Setting	Purpose
Daily price limit	±10× from start-of-day	Blocks absurd prints
Per-update bound	±1% mark change per ~3s update	Smooths paths; ~20%/min linear
OI-adjusted bound	Mark cannot jump to levels that would exceed 10× the OI cap	Prevents cascade risk
Emergency halt	haltTrading available	Pause a specific market in extremes