Trader Risks

Price impact when opening / closing a position

Risk: If you try to open a large position relative to the pool size and require swapping token, your transaction could incur a large price impact. As an example, if a liquidity of a pool is USD 100 million, swapping USD 1 million (1% of pool's liquidity) worth of token would incur about 4% price impact. If you are unfamiliar with how price impact works for AMM, please read here.

Mitigation: Open multiple smaller positions or open a smaller position and add collateral to that position at a later time. You should wait for a short interval for arbitrageur to bring price back to normal. In addition, the positions value is limited according to the depth of the liquidity pool to ensure that the impact of price on traders is within a reasonable range.

Liquidation Risk

Risk: If you open a margin trading position, ATE lending vault will lend you a certain amount of funds. You will take the risk of being liquidated when the Debt Ratio (debt / position value) reaches the Liquidation Threshold. See Pool-Specific Parameters for more information here.

Mitigation: This can be mitigated by using a lower leverage level, monitoring positions during volatile market conditions, and closing them before hitting the Liquidation Threshold.