ADL

Astros employs an Automatic Deleveraging (ADL) system to manage scenarios where the Insurance Fund lacks sufficient assets to cover liquidation losses. In such cases, the ADL mechanism automatically reduces the positions of traders holding opposite market positions to restore balance and protect market stability.

ADL Priority Ranking

The ADL system prioritizes trader positions for deleveraging based on two primary factors:

• Profitability of the position

• Effective leverage utilized

Positions with higher profitability and greater leverage are prioritized and thus more susceptible to automatic position reduction.

---

Calculation of ADL Ranking

The ADL priority ranking is calculated using the following formulas and definitions:

Effective Leverage:

$$\text{Effective Leverage} = \frac{\text{Mark Value}}{\text{Mark Value} - \text{Bankruptcy Value}}$$

Percentage Profit (% Profit):

$$\text{Profit} = \frac{\text{Mark Value} - \text{Average Opening Value}}{\text{Average Opening Value}} \times 100\%$$

Where:

• Mark Value: The current value of the position calculated at the Mark Price.

• Bankruptcy Value: The theoretical position value calculated at the Bankruptcy Price.

• Average Opening Value: The position's value calculated using the Average Entry Price.

---

Importance of ADL

This structured ADL mechanism ensures:

• Fairness in liquidation scenarios by targeting positions with higher risk profiles first.

• Transparency through clear visual indicators and predictable calculations.

• Market stability by promptly addressing deficit situations.

Traders should regularly monitor their ADL Ranking indicator to proactively manage their positions and minimize risk exposure. Astros