Liquidations

Nunchi markets use the Hyperliquid core liquidation engine.

A position is liquidated if its margin falls below the maintenance requirement based on the mark price.

The liquidation process

When maintenance margin is breached, the system sends market orders to reduce or close the position until the account’s equity is back above maintenance.

If liquidation succeeds:

• remaining collateral stays in the user’s account.

Partial liquidations

To reduce market impact:

• for positions > $100,000 notional, the engine first liquidates 20%,

• then enforces a 30‑second cooldown for that account,

• if still under‑margined during the cooldown, subsequent liquidation targets the remaining size.

No liquidator vault

Unlike some validator‑deployed perps, Nunchi HIP‑3 markets do not use a liquidator vault backstop mechanism.

Estimating liquidation price

The UI typically shows:

1. Pre‑trade estimate (guide, may differ at fill)

2. Post‑fill estimate (changes with funding, cross‑margin equity)

Margin modes

• Isolated margin: leverage directly affects liquidation price.

• Cross margin: liquidation depends on total account equity and all positions.

Nunchi HIP‑3 markets use isolated margin by default.

Formula (reference)

A commonly used form is:

liq_price = price - side * (margin_available / position_size) / (1 - l * side)

Where:

• side = +1 for long, -1 for short

• l = 1 / maintenance_leverage

• margin_available = isolated_margin - maintenance_margin_required

Always validate current maintenance/leverage parameters in the UI.