? Liquidation System & GDAO Vault

gTrade's partial collateral model enables leverage up to 1000 but creates a more complex liquidation architecture than full-collateral systems. When positions are liquidated, the GDAO vault absorbs losses or profits. Keeper bots monitor the Chainlink oracle continuously and trigger force-closes when collateral falls below the minimum buffer. In extreme scenarios, socialized losses distribute shortfalls across all GDAO stakers.

? Liquidation Price Calculator

Explore how collateral, leverage, and fees determine the liquidation price. Watch how small price moves and fee accumulation erode the margin buffer until the keeper triggers.

Direction Asset Class

Collateral ($) 100 Leverage 50 Entry Price ($) 2000 Hours Held 24

Position Size

$5,000

Liquidation Price

$1,920

Price Move to Liq

4.0%

Remaining Buffer

$40.00

Keeper Fee

$5.00

GDAO Loss Absorbed

$0.00

Liquidation Flow - Step by Step

Watch how a position moves from healthy -> under pressure -> liquidation trigger -> vault settlement. Each phase shows on-chain actions and collateral state.

Partial Collateral vs Full Collateral - Risk Comparison

The partial collateral model (gTrade) allows higher leverage but has different loss mechanics than GMX's full-collateral model. This comparison shows how losses are absorbed at each stage.

? GDAO Vault - Loss Absorption Mechanics

The GDAO vault is the central accounting layer for gTrade. It receives all trading fees, pays out winning PnL, absorbs liquidation losses, and distributes rewards to stakers. Vault health is the primary metric for GNS stakers to monitor.

Vault Balance

$2.4M DAI

Vault APR (Fees)

42.3%

Pending Liquidations

3 positions

Socialized Loss Reserve

$180k

* Keeper Bot Architecture

Keeper bots are off-chain agents that monitor positions and trigger liquidations. They compete for the liquidation fee, which creates an economic incentive for rapid execution.

Keeper Monitoring

Off-chain process, not on-chain execution
Watches Chainlink PriceFeeds continuously
Calculates margin buffer for each position
First keeper to call liquidatePosition wins fee
Runs on cloud infrastructure for reliability

Keeper Incentive

Fixed DAI fee per successful liquidation
Gas refund on liquidation transaction
Competition ensures fast execution
Bots run continuously across market events
Keeper software is open-source / auditable

Socialized Loss Scenarios

Normal Liquidation

Trader has $100 collateral, position moves against them. Keeper liquidates at $1,920. Remaining collateral minus keeper fee goes to vault. No socialized loss needed - vault absorbs $0 net loss.

Liq Price

$1,920

Vault Loss

Socialized?

High Volatility Spike

Oracle spikes 10% in seconds. Keeper can't execute fast enough. Position closed at $1,800 instead of $1,920. Trader loses $200 more than collateral. Vault covers $200 shortfall.

Liq Price

$1,800

Vault Loss

$200

Socialized?

Vault covers

Black Swan (Extreme)

Flash crash drops oracle 30%. Multiple liquidations trigger at once. Vault insufficient. Socialized loss fires: losses distributed across all GDAO stakers proportional to stake.

Liq Price

$1,400

Vault Loss

$3,000+

Socialized?

Yes - stakers absorb

Max Leverage vs Liquidation Distance

Leverage	% Move to Liq	Hours @ 1%/hr Vol	Max Loss vs Collateral	Bankruptcy Risk
10	10%	10h	100% of collateral	Very Low
50	2%	2h	100% of collateral	Low
100	1%	1h	100% of collateral	Moderate
500	0.2%	12min	100% of collateral + buffer	High
1000	0.1%	6min	100% of collateral + large buffer	Very High