Margin Calls and Liquidations

Margin Calls

The Maple Operations team has a proprietary alert system in place with three separate sources for price feeds, and a 24/7/365 live monitoring process.

If collateral value falls to the Margin Call Level, the borrower is automatically notified and has 24 hours to top up and restore collateralization to the Initial Collateral Level.

If they fail to do so in time, Maple liquidates their collateral as part of the legal agreement with the borrower.

Liquidation Levels

At any point, if collateralization reaches the Liquidation level, even if a margin call is in process, Maple has full rights to liquidate collateral to protect lender principal.

How Liquidation Works

Maple has partnered with a number of leading OTC desks to enable swift execution in a falling market environment, and this is the preferred method of execution. By using OTC desks, price can be agreed immediately and the trade settled subsequently whilst assets are moved onchain. If needed, the team also has the ability to withdraw to CEXs or DEXs to liquidate instead.

Liquidations have been rare because of the quality of the underwrite - the borrower’s ability to meet margin calls quickly is checked pre-issuance as mentioned above, and monitored on an ongoing basis. Historically, margin calls issued over the past year have been met in a matter of hours by borrowers, and in many cases they elect to top up in advance of a call being issued.