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Decibel uses cross-margin by default, meaning all your collateral backs all your positions. This page explains how margin, equity, and leverage work together.
Collateral can be more than USDC. USDC counts at full value, while accepted secondary assets — such as DLP Vault shares — count toward your account at a collateral credit below 100%. Everywhere this page says “collateral,” it means the combined credited value of all your deposited assets. See Multi-Collateral for details.

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Key Concepts

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Account Equity

Your account equity is your total value:
Unrealized PnL includes both mark-to-market gains/losses and accrued funding. This is the number that determines if you can open new positions or face liquidation.

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Initial Margin (IM)

Initial margin is the collateral required to open a position. It’s based on the leverage you select:
For example, if you select 10x leverage, your IM Fraction is 10%. To open a $10,000 position, you need $1,000 in initial margin.

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Maintenance Margin (MM)

Maintenance margin is the minimum collateral to keep a position open:
If the market’s max leverage is 40x, the MM Fraction is 1.25%. Your position gets liquidated if your equity falls below your total MM requirement.

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Cross-Margin Behavior

With cross-margin, all your collateral is shared across all positions:
  • Profits from one position cover losses in another
  • Liquidation only happens when total equity falls below total MM requirement
  • Capital is more efficient since you don’t isolate margin per-position

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Example

You have $10,000 USDC deposited and two positions:
  • Long BTC-PERP: $50,000 notional, currently +$2,000 PnL
  • Long ETH-PERP: $30,000 notional, currently -$1,500 PnL
Your account equity is $10,000 + $2,000 - $1,500 = $10,500. The ETH loss doesn’t trigger liquidation because the BTC profit offsets it.

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Isolated Margin

Isolated margin allocates collateral to individual positions, limiting your risk to that specific position. If an isolated position gets liquidated, your other positions and remaining collateral are unaffected. You choose cross or isolated per market, along with your leverage for that market. Isolated positions hold their own margin, separate from your cross-margin balance:
  • Fund an isolated position by depositing directly to it, or transfer margin between your cross-margin balance and the isolated position at any time.
  • Add margin to an isolated position to move its liquidation price further away; remove margin back to cross as long as the position stays above its maintenance requirement.
  • Isolated-only markets. Some markets are configured to trade in isolated mode only.
Cross-margin remains the default. Switch a market to isolated from your account settings before opening the position.

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Tradeable and Withdrawable Balance

Decibel distinguishes between what you can trade with and what you can withdraw. A PnL haircut (set per market) prevents over-withdrawal on volatile unrealized gains.

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Tradeable Balance

Your tradeable balance determines how much you can use to open new positions:
The max() picks whichever is larger: your initial margin requirement or the PnL haircut. More volatile markets have higher haircut requirements, so large unrealized gains on volatile positions reduce your tradeable balance more than stable ones.

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Withdrawable Balance

Your withdrawable balance is more conservative. It’s based on collateral value only, excluding unrealized gains:
This means unrealized profits don’t increase your withdrawable amount. You can only withdraw collateral that isn’t backing open positions or covering unrealized losses.

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Leverage Selection

When opening a position, you select your leverage by choosing how much initial margin to allocate. Higher leverage means:
  • Smaller initial margin requirement
  • Larger position relative to collateral
  • Closer to liquidation price
  • Greater profit/loss per price move

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Key Formulas

Liquidations

What happens when equity falls below maintenance margin

Funding Rates

How funding affects your unrealized PnL