For the complete documentation index, see llms.txt. This page is also available as Markdown.
Liquidations
Liquidation happens when an account no longer holds enough collateral to safely support its positions.
To see how it works on Symmio, start with how your collateral is tracked. When you send a quote, the margin that position requires moves into a pending state. You can't use it to open other trades, but it still counts toward your allocated balance when the protocol checks whether you're solvent. Once a solver accepts the quote and the position opens, that margin becomes locked: it's actively backing the trade. Anything that's neither pending nor locked is your free balance.
Every position on Symmio is cross margin, so your entire allocated balance, across all positions and pending quotes, works together to support your risk. As your unrealized PnL (UPnL) moves, the protocol draws on your collateral in order: first locked margin, then free balance, and finally pending locked amounts. As long as your total UPnL stays above the lowest allowed threshold, you're safe. If losses grow until even the pending locked funds aren't enough, the account is unsafe and liquidation triggers.
Because the account is cross-margined, PartyA is liquidated as a whole. All of PartyA's open positions and outstanding quotes move into a liquidated state together; in practice, everything is closed or cancelled at once.
When that happens, special actors called liquidators step in. They use signed data from the Muon network to prove your total losses and the prices of the markets you're trading. The protocol then closes your positions, redistributes collateral between you and your counterparties, and pays a small fee to the liquidator for keeping the system safe. Your CVA and margins are applied according to the protocol's rules.
Example
Say Alice (PartyA) has $1,000 allocated for trading, with several positions open and cross-margined together:
$500 locked in active positions
$200 pending locked (quotes waiting to be filled)
$300 free and available
$100 in locked CVA
Stage 1: Alice's has manageable losses.
Stage 2: Alice suffers deeper losses
Stage 3: Alice has critical losses and is about to be liquidated
