fiddy.dime - priv/acc 🦡

ADL is a relic of isolated margin systems copied from @BitMEX. It doesn’t work for options, and at best is a terrible experience for cross-margin users. Paradex deliberately chose not to implement ADL. It breaks cross-platform hedges, adds a lot of unpredictability to users’ risk management, and fails for complex assets and portfolio-margin setups. There’s also no guarantee of finding profitable ADL counterparties under cross margin, without further amplifying liquidations. @DeribitOfficial also operates without ADL. Socialized loss (SL) is a far better experience for users and scales easily to more complex assets and margin types 👇 Portfolio-Level Integrity ADL operates at the single-market level, without considering the user’s overall account exposure. The trader who is high on the ADL queue due to a highly profitable/leveraged position on one market isn't necessarily profitable on an account level. Example: BTC = $100,000, ETH = $4,000 Insurance Fund (IF) = $100,000 collateral + short 40 BTC perps. Alice has a $4M BTC-ETH spread on, i.e. +40 BTC perps (long) and –1,000 ETH perps (short) → Both BTC and ETH rally +5% → BTC to $105,000, ETH to $4,200. Under a normal scenario, Alice’s BTC and ETH positions offset, leaving her with flat PnL. But the insurance fund’s bankruptcy price is $102,500. To protect the fund, ADL is triggered and forces Alice’s BTC leg to be closed at $102,500 as it cannot afford a loss that is higher than $100,000. Alice realizes BTC profits based on a 2.5% move while her ETH short continues to lose 5%, leaving her with a $100,000 loss. This can, in theory, lead to an unfair liquidation of Alice's account. "Ethena" Risk The same is true for a trader that could be holding the opposite position on a different exchange. If the position is subject to ADL, it closes the profitable leg, leaving the user with a naked losing leg. This destroys the intended hedge and amplifies risk exposure. @ethena smartly negotiated this provision away for it's trading on CEXs but that now means the risk of ADL is being unfairly borne by the exchange's other users. Smart for Ethena but not scalable for the exchange. Given the potential market exposure imposed on affected accounts, ADL often triggers a forced unwind of positions, leading to fire-sale behavior that further amplifies market volatility and erodes liquidity. This mechanism is particularly unsuitable for exchanges with options, where users frequently hold multiple correlated instruments on the same underlying asset for hedging or risk-neutral strategies. In such environments, forcibly closing a single profitable leg through ADL can break portfolio hedges, destabilize the portfolio and, by extension, the market. To our knowledge, NO EXCHANGE discloses how cross-instrument exposures are handled under ADL. Conditional + Reversible Under a SL mechanism, losses are conditional, deferred (not immediately realized) and give users a choice. They are applied only upon withdrawal, and only if the platform is still experiencing a solvency deficit at that time. If the market rebounds, or if the insurance fund grows (either through profitable liquidations or additional allocations) and covers the deficit, the shortfall is erased and no SL is applied. By contrast, ADL crystallizes losses instantly and doesn’t give the user a choice. If a sudden market move causes insurance fund depletion, the system immediately closes profitable positions via deleveraging. Those users now permanently lose their realized profits. SL introduces time, and recovery potential into the loss-allocation process while giving users a choice. It penalizes only those who exit during insolvency, while long-term users benefit if solvency is later restored. Fair + Predictable Risk Distribution ADL targets specific traders (often highly leveraged and profitable ones), forcibly closing their positions to cover the platform shortfall. It penalizes traders for system-level insolvencies outside their control. SL by comparison avoids arbitrary targeting and maintains fairness. All users share the risk evenly and only when a persistent shortfall exists. Transparency ADL is a complex, queue-based mechanism that is very hard to anticipate for users. In contrast, a SL adjustment is a simple, transparent function of the insurance fund shortfall relative to the platform’s TVL. As it affects users only when they withdraw, it ensures predictability and transparency in the loss allocation. Compute Efficient = "Chain Friendly" SL simplicity makes it straightforward to implement on-chain in a trustless manner. There is less compute complexity which means cost and throughput constraints are alleviated. ADL’s dynamic queue logic is computationally heavy as it requires scanning all accounts on the platform, making it very expensive and error-prone. It also adds congestion to a system that is likely to already be congested when ADL is triggered. October 10 = Wake Up Call If your CEX can’t guarantee portfolio integrity under stress, it’s the architecture that’s broken. Switch to DEXs with intelligent loss-allocation that protects hedges, distributes risk fairly while staying conditional and predictable. Paradexio

still a lot of work to do but good to see we are at ~parity with the CEXs

More layoffs are coming. This is only going to get worse. The bright side to this is that there are going to be thousands of micro companies

This is only going to get worse with all the AI related layoffs that are coming. Combine that with less risk taking in general because of the war and we are effectively looking at a high likelihood of a deep recession.

the root cause of toxic flow in continuous order books is that they treat time as continuous while processing requests serially batch auctions solve this by discretizing time and matching in batches rpi + a speed bump solves the same problem differently: keep the market continuous, but create a slow lane where participants compete on a more level clock for exchanges that are already live, it is also the less disruptive path same problem more practical fix

The Threesome continues

What does he know?

$DIME is live in the SOL trenches 🔥

👀

💪

@Kartik2Sl Soon

@fiddybps1 When $Dime Staking 🫩

pretty amazing to see how quickly people have realized that openclaw is not just another open-source project. it is now the agent framework and ecosystem and has forever changed how we think of software, automation, and human-computer interaction. going forward, projects and companies will need to consider how their products, tools, and workflows integrate with the broader openclaw ecosystem

Hyperliquid just flipped BNB Chain to become the #3 chain by Staking Market Cap. $17.96B worth of $HYPE staked, 45.08% of supply

lots of action around the 2300 strike for ETH 24hr volume on @tradeparadigm was $900m

@matveyrey @paradex Good to know, soon full rollout.

@fiddybps1 @paradex I hope so FYI that's what's making me stick with Extended, hope you guys can catch up swiftly

RWA perps on @paradex are designed to deliver a materially improved trading experience. Significant work has gone into addressing key market structure issues, including: + 24/7 market access + funding rate stability + no ADL + a robust oracle price that is not artificially anchored to the market close This methodology will be extended across all RWA markets and reflects Paradex’s continued focus on building products designed to better protect traders.

DIME time on MEXC💰

👀

@matveyrey @paradex within a few weeks we should be at parity with the market

@fiddybps1 @paradex how quickly are you expecting to enabling more RWA markets ?

Ron is cookin 🔥

keep moving forward