ZB Tiered Leverage for Isolated supports leverage of up to 5x for certain trading pairs. Available pairs will have different available borrowing amount and initial risk ratios and liquidation risk ratios for differing effective leverage. The Tiered Leverage include 5 tiers(2x to 5x leverage), you can use Tiered Leverage in ZB’s website and ZB APP.
1.The borrowing rules of Tiered Leverage
1)Determine the current tier based on the user's actual borrowing amount.
2)The larger the user's borrowing amount, the higher the level of tiered leverage, the lower the effective leverage, and the higher the initial Risk Ratio and the liquidation Risk Ratio.
3)The smaller the user's borrowing amount, the lower the level of tiered leverage, the higher the effective leverage, and the lower the initial Risk Ratio and the liquidation line.
4) If the user borrows both the base currency and the valuation currency at the same time, the system will calculate the tier separately and take the highest tier as the final tier.
5) The sub-account and the main account respectively determine the corresponding tier independently.
Take the BTC/QC market as an example (for the more market please refer to “Tiered Leverage Info”):
Assuming that the user has borrowed 1,500,000 QC and 23 BTC, then the BTC borrowing tier is 4 and the QC borrowing tier is 2, so the current account’s borrowing tier is 4; the corresponding liquidation risk ratio is 1.395 and the effective leverage is 2.75x.
2. Tiered Liquidation and Tiered Leverage
The liquidation under tiered leverage adopts partial repayment and tiered liquidation.
1)When the user's borrowing tier is 2 and above, and the account reaches the liquidation risk ratio, the system will automatically calculate the repayment amount of partial liquidation and reduce the tier of borrowing until the risk ratio meets the requirements.
2)When the user's borrowing tier is 1, and the account reaches the liquidation risk ratio, the user's position will be liquidated.
3)When processing the tiered liquidation, the system calculates the outstanding repayment amount by tier and performs partial closing operations. If the risk ratio is still lower than the liquidation risk ratio when it reaches the next level, it will continue to be downgraded for cyclic liquidation until the risk ratio meets the requirements.
For example, assume that the user borrowed 23 BTC in the BTC/QC margin market (not include the interest), the effective multiple is 2.75x, and the corresponding liquidation risk ratio is 1.395.
4)Due to market fluctuations, the price of BTC has fallen, and the risk ratio is lower than 1.395, then the system will start a tiered liquidation and returns 3 BTC. At this time, the tier of the account drops to tier 3, the effective multiple is 3.5x, and the corresponding liquidation risk ratio is 1.29.
5)If the price of BTC continues to fall, and the risk ratio is still lower than 1.29, the system will start a tiered liquidation and return 5 BTC. Assume that the price will not change after that. The user has gone through 2 tiered liquidation, the borrowing becomes 15 BTC, if the risk ratio is 1.3, the account will be tier 2, then the effective multiple is 4.25x, and the corresponding liquidation risk ratio is 1.185.