What Is ADL?
ADL (Auto-Deleveraging) is a risk control mechanism triggered under extreme market conditions when a position is liquidated due to insufficient margin, and the insurance fund is unable to cover the loss of the position. Essentially, the liquidated position will be forcibly matched and offset against positions in the opposite direction that are selected through the ADL mechanism, thereby minimizing potential impact on the market and the platform’s insurance fund. The core goal of ADL is to maintain market fairness while preserving platform liquidity.
Gate prioritizes user trading security and has implemented multiple risk control measures to minimize the likelihood of ADL being triggered. However, due to the volatility and the broad availability of high leverage in the crypto market, all position holders remain subject to a minor risk of ADL.
How Does ADL Work?
ADL Ranking: A position’s ADL rank is determined by its return rate and maintenance margin ratio (MMR). Users can monitor their real-time ADL status through the ADL indicator displayed on each position. The indicator has five bars, and the more bars that are lit, the higher the ADL rank and the greater the chance of being selected for ADL.
ADL Process: When ADL is triggered, the system selects positions for deleveraging based on their ranking. The open orders of the selected user will be canceled, and their position will be automatically matched against the liquidated position at the counterparty’s bankruptcy price. If the position is not closed through ADL, the remaining portion will re-enter the ADL ranking process. or details on how the bankruptcy price is calculated, please refer to the Estimated Liquidation Price and Bankruptcy Price Calculations .
Example:
User A holds a 100-contract long position in a certain market and ranks first in the ADL queue. At the same time, User B’s 100-contract short position is liquidated, and neither the market nor the insurance fund is able to cover the loss. As a result, 100 contracts need to be deleveraged through ADL. Since User A’s position ranks the highest, the system will select 100 contracts from their long position and forcibly match them with User B’s short position at the bankruptcy price of User B’s position, completing the ADL process.
When Is ADL Triggered?
ADL is a risk control mechanism triggered under extreme market conditions when a position is liquidated, and the insurance fund is unable to cover the loss of the position.
How Is ADL Ranking Calculated?
In the isolated margin mode (Classic Futures Account, Unified Account Single-Currency Margin Mode or Multi-Currency Margin Mode)
For profitable positions: Ranking Score = Return % / MMR
For losing positions: Ranking Score = Return % × MMR
In the cross margin mode (Classic Futures Account, Unified Account Single-Currency Margin Mode, Multi-Currency Margin Mode or Portfolio Margin Mode)
For profitable positions: Ranking Score = Return % / MMR
For losing positions: Ranking Score = Return % × MMR
Return (Long) = (Mark Price − Average Entry Price) / Average Entry Price
Return (Short) = (Average Entry Price − Mark Price) / Average Entry Price
Reminder:
The ADL system prioritizes profitable positions over losing ones. Even though losing positions have negative returns, they still participate in the ADL ranking and may be selected for ADL.
Positions with MMR below 100% (i.e., those being liquidated) are not included in the ADL ranking.
Example of ADL Ranking and Indicator Lights
Assume there are three long isolated-margin positions in the current market, with the following parameters:
| Positions | Return % | MMR | Position Size | PnL Status | Ranking Score Calculation | Ranking |
|---|---|---|---|---|---|---|
| A | 200% | 120% | 8 contracts | Profit | 200% / 120% ≈ 1.6667 | Highest |
| B | -50% | 200% | 12 contracts | Loss | (-50%) × 200% = -1 | Lowest |
| C | 150% | 150% | 6 contracts | Profit | 150% / 150% = 1 | Medium |
The ADL ranking scores of the three positions are:
Ranking Score (A) = 200% / 120% ≈ 1.6667
Ranking Score (B) = (-50%) × 200% = -1
Ranking Score(C) = 150% / 150% = 1
Ranking Score (A) > Ranking Score (C) > Ranking Score (B), so the position order is: A (8 contracts) → C (6 contracts) → B (12 contracts)
Total long position size: 8 + 6 + 12 = 26 contracts
The ADL indicator divides these into 5 segments. Each segment = 26 / 5 = 5.2 contracts
| Segment | Range | Lit Bars | Contract Range |
|---|---|---|---|
| Segment 1 | (0, 5.2] | 5 | 1–5 contracts |
| Segment 2 | (5.2, 10.4] | 4 | 6–10 contracts |
| Segment 3 | (10.4, 15.6] | 3 | 11–15 contracts |
| Segment 4 | (15.6, 20.8] | 2 | 16–20 contracts |
| Segment 5 | (20.8, 26] | 1 | 21–26 contracts |
Position A (8 contracts) spans Segment 1 and 2, starting in Segment 1, and has 5 bars lit
Position C (6 contracts) spans Segment 2 and 3, starting in Segment 2, and has 4 bars lit
Position B (12 contracts) spans Segment 3, 4, and 5, starting in Segment 3, and has 3 bars lit
How to Avoid Being Auto-Deleveraged?
While ADL risk cannot be fully eliminated, users can reduce the likelihood of their positions being selected for ADL by:
Monitoring the ADL Indicator: Stay aware of the position’s ranking and adjust accordingly.
Adding Margin: Increase the margin to raise the MMR, which can lower the ADL rank and reduce the risk of being auto-deleveraged.
Gate reserves the final right to interpret the product.
For further assistance, please visit the Gate official support page or contact our customer support team.
