Account Solvency Thresholds

Account solvency thresholds are the specific levels of equity or collateralization that a protocol uses to determine if an account is healthy or in danger of liquidation. These thresholds are defined by the protocol's risk parameters and are designed to ensure that the system remains stable.

If an account's equity falls below the maintenance threshold, the system triggers an automatic liquidation. If it falls even further, it may trigger more aggressive actions, such as closing all positions.

These thresholds are critical for protecting the protocol from bad debt. For traders, understanding these thresholds is vital for avoiding unexpected liquidations.

They are the "rules of the game" that govern the life and death of a leveraged position. Protocols often provide tools for traders to monitor their proximity to these thresholds in real-time.