Overview

Nord provides perpetual futures (over CLOB and RFQ) and spot trading (over RFQ) in a single cross-collateralized account. Its margining system limits the risk an account can take. Risk is denominated in USD, with settlement in USDC.

Cross-collateralized accounts

Positive token balances provide collateral across the account's markets. Collateral weights account for differences in asset volatility and liquidity. Nord evaluates this collateral together with borrows, perpetual positions, profit and loss, funding, and open orders.

For example, suppose an account has 20,000 USDC of collateral and opens positions in two perpetual markets:

$$\text{collateral} = 20{,}000\ \text{USDC}$$

The BTC market has a maximum leverage of 10x, so a 100,000 USD BTC position requires:

$$\frac{1}{10} \cdot 100{,}000 = 10{,}000\ \text{USDC}$$

The ETH market has a maximum leverage of 5x, so a 25,000 USD ETH position requires:

$$\frac{1}{5} \cdot 25{,}000 = 5{,}000\ \text{USDC}$$

Both positions draw from the same USDC collateral:

$$\begin{aligned} \text{total initial margin} &= 10{,}000 + 5{,}000 = 15{,}000\ \text{USDC} \\ \text{remaining margin} &= 20{,}000 - 15{,}000 = 5{,}000\ \text{USDC} \end{aligned}$$

The 20,000 USDC is not assigned to either position separately. If the BTC position loses 3,000 USD, account value falls to 17,000 USD and the margin remaining across both markets falls to $17{,}000 - 15{,}000 = 2{,}000$ USDC.

Account health

Account health compares the conservative value of an account's collateral and positions with its current and potential exposure. Open orders are included because filling them may increase the account's exposure.

Nord uses oracle confidence bounds to avoid overstating collateral or understating risk. See Definitions for account value, position notional, position open notional, and index price calculations.

Margin lifecycle

When a user opens a position, increases exposure, or borrows assets, the account must satisfy its initial margin requirement. Afterward, its margin fraction determines which actions are allowed:

• Initial margin controls new exposure.
• Cancel margin determines when risk-increasing orders can be removed.
• Maintenance margin determines when positions and borrows become eligible for liquidation.

See Margin for margin formulas, thresholds, and price bands.

Liquidation

Overleveraged accounts are liquidated. Risk-increasing orders are canceled and positions are reduced, and possibly closed, until the account returns to a healthy margin level. More distressed accounts may have their positions transferred to the backstop. Liquidated users are charged a liquidation fee.

See Liquidations for liquidation eligibility, execution, and backstop behavior.

Funding

Perpetual funding keeps market pricing aligned with the index price. Accrued funding affects account value and is settled into PnL. See Funding for premium sampling, funding indexes, settlement, and outage behavior.