💧Liquidation

Let's look at the example, since only 2.41 USD worth of tokens is used as collateral to open the position, there will be a price at which the loss amount is very close to the collateral amount.

This is the Liquidation Price and is calculated as the price at which the (collateral - losses - borrow fee) is less than 1% of your position's size. If the token's price crosses this point then the position will be automatically closed.

Due to the borrow fee your liquidation price will change over time, especially if you use a leverage that is more than 10x and have the position open for more than a few days, so it is important to monitor your liquidation price.

If there is any collateral remaining after deducting losses and fees, then the corresponding amount would be returned to your account.