# Maintenance Margin (CVA) Calculations
{% hint style="info" %}
**CVA and Max Leverage:**
**Note: contract parameters — maintenance margin and maxLeverage — are set by Solvers based on their own risk assessment.**
**The Rasa Solver has the following (basic) settings.**
***1) logic is as follows***
* CVA is the overall maintenance margin ( in case of liquidation, part goes to liquidators as incentives, part to the non-liquidated party who they needs to unwind their positions )
* CVA is a fixed proportion of initial notional:
*cn = CVA/Notional=CVA/(deposit\*leverage)*
*$CVA = cn \* notional (with cn fixed per market)*
cn depends on the volatility and risk of the coin.
* When measured as a fraction of collateral, CVA increases with leverage:
*cd = CVA/deposit = cn \* leverage*
* In order to avoid excessive trader risk, leverage is capped so that maintenance margin (CVA) does not exceed 60% of deposit.
* The initial CVA in dollar terms remains unchanged as long as the position in unchanged
***2) parameters are as follows***
* cn=CVA/notional starts from just above to 1% (1.08% for BTC and ETH), is 1.3-1.5% for blue chips (most alt and layer 2 coins), 4%-5% for exotic coins (three very risky coins require even more margin)
* maxLeverage (where cd=CVA/deposit = 60%) is 60x for ETH and BTC, 40-50x for alts and layer 2 (ARB, OP), and down to 20-25 for exotic coins (3 coins have lower leverage)
Overall, each Market has a different parameters depending on its volatility and risk, with max leverage falling as risk increases, see full list in [max-leverage](https://docs.symm.io/liquidity-provider-documentation/solver-settings/max-leverage "mention").\
{% endhint %}
## CVA and maxLeverage Formulas:
$$
maxLev= 60%/ ($CVA/notional) = 60%/ cn
$$
maxLeverage is (expect for 3 coins) is in the 20-60 range
## **Example:**
Consider a scenario where User A desires to engage in a trade with a leverage of buying a 10,000 USDT 60x BTC Long (the maximum leverage for BTC is set at 60x).
1. **User A navigates to the** [**SYMMIO `frontend`.**](https://www.symm.io/frontends)
2. **Upon arrival, User A expresses an intent:**
```
Tade Size: 10,000 USDT
Leverage: 60x,
Notional value: 600,000 USDT.
Price: $34,676.1 per BTC,
Size: 17.31 BTC.
```
3. **The frontend then responds with the Solvers required Maintenance Margin of:**
```
CVA: 6499.84 USDT
```
#### The CVA (Credit Value Adjustment) for this trade is calculated as:
$$
CVA=10,000×0.60
\= 6000USDT
$$
{% hint style="danger" %}
Should the unrealized profit and loss (uPnL) on his BTC position reach -$4000, User A will automatically be moved into the Liquidation Process by Liquidators.\
\
This example illustrates the interplay of leverage, CVA, and the liquidation threshold within the Rasa - Demo Solver environment through a SYMMIO frontend.
{% endhint %}
## Integration with API endpoints
Solver endpoints provide real-time parameters for collateral requirements via a REST API. See Rasa's endpoints [here](https://docs.symm.io/liquidity-provider-documentation/solver-settings/broken-reference).
#### **Endpoint Structure**
```bash
GET /get_locked_params/{symbol}?leverage={leverage}
```
**Example**:
```bash
https://base-hedger82.rasa.capital/get_locked_params/BTCUSDT?leverage=60
```
The endpoint returns the following response:
```json
{
"cva": "40", // CVA (% of deposit)
"lf": "20", // Liquidation Fee (% of deposit)
"leverage": "60.0", // Allowed leverage
"partyAmm": "40", // Party A’s initial margin (% of deposit)
"partyBmm": "0" // Party B’s initial margin (0 for single-sided)
}
```
***
### **2. Deriving `cn` (CVA/Notional Ratio)**
`cn` represents the **total Maintenance Margin (CVA + LF)** as a percentage of the **notional value**. The cn is ultimately defined by the solver. This should reflect the risk of the asset.
#### **Formula**
$$
cn = \frac{\text{cva} + \text{lf}}{100 \times \text{leverage}}
$$
#### **Example Calculation**
Using the API response for BTCUSDT:
```json
{
"cva": "40", // CVA (% of deposit)
"lf": "20", // Liquidation Fee (% of deposit)
"leverage": "60.0", // Allowed leverage
"partyAmm": "40", // Party A’s initial margin (% of deposit)
"partyBmm": "0" // Party B’s initial margin (0 for single-sided)
}
```
* `cva = 40%`, `lf = 20%`, `leverage = 60x`
* Deposit = 100 USDT (for illustration).
$$
cn = \frac{40 + 20}{100 \times 60} = \frac{60}{6,000} = 0.01
$$
***
### **3. Calculating Maintenance Margin**
The Maintenance Margin can derived from `cn` and the **notional value**.
#### **Formula**
$$
\text{Maintenance Margin} = cn \times \text{Notional}
$$
#### **Example**
* **Notional** = Deposit × Leverage = 100USDT × 60 = 6,000 USDT
* **`cn`** = 1% (from above).
$$
\text{Maintenance Margin} = 0.01 \times 6,000 = 60 \text{USDT}
$$
***
### **4. Calculating Max Leverage**
The maximum allowed leverage (`maxLeverage`) is determined by the **CVA/Deposit cap** (`cd ≤ 60%`) and `cn`.
{% hint style="info" %}
With higher `cn` the `maxLeverage` must decrease proportionally
{% endhint %}
#### **Formula**
$$
\text{maxLeverage} = \frac{0.6}{cn}
$$
#### **Example**
For BTCUSDT with `cn = 1%`:
$$
\text{maxLeverage} = \frac{0.6}{0.01} = 60x
$$
**Example Scenarios**:
| Asset Type | `cn` | Max Leverage |
| ------------------ | ---- | --------------------- |
| **BTC/ETH** | 1% | ( 0.6 / 0.01 = 60x ) |
| **Blue-Chip Alts** | 1.5% | ( 0.6 / 0.015 = 40x ) |
| **Exotic Coins** | 4% | ( 0.6 / 0.04 = 15x ) |
The [contract-symbols](https://docs.symm.io/api-endpoints-and-deployments/solver-addresses-and-endpoints/rasa-capital#get-contract-symbols) endpoint should return this maxLeverage as a parameter in the endpoint.
Example for Rasa BTCUSDT:
```json
{
"price_precision": 1,
"quantity_precision": 3,
"name": "BTCUSDT",
"symbol": "BTC",
"asset": "USDT",
"symbol_id": 1,
"is_valid": true,
"min_acceptable_quote_value": 120,
"min_acceptable_portion_lf": "0.003000000000000000",
"trading_fee": "0.000600000000000000",
"max_leverage": 60,
"max_notional_value": 2100000,
"rfq_allowed": true,
"hedger_fee_open": "0.0006",
"hedger_fee_close": "0.0006",
"max_funding_rate": "200",
"min_notional_value": "100",
"max_quantity": "1000",
"lot_size": "0"
},
```
