ACMM

ACMM (Automated Cross Margin Management)

Note:

1. ACMM is provided only when the user has activated ACMM.

2. Only for those knowledgeable in Cross-Margin and Perp DEX Trading.

3. ACMM is launching soon

1. What is ACMM?

ACMM, or Automated Cross-Margin Management, streamlines the management of multiple positions across different Perp DEXs, eliminating the need for manual intervention. It enables the automation of long-short and cross-margin plays within DVX.

2. Background

In the last few years, the perpetual swap market has expanded quickly, leading to the rise of many Perp DEXs. However, most Perp DEXs only service isolated margin, which causes inconvenience for traders in managing their positions. The DVX team, drawing on their deep trading experience on DEXs, introduces a solution to this issue.

3. How it Works?

1. A specific position is close to reaching its liquidation price.

2. With the DVX Hybrid Trading Account, keepers can add or subtract collateral within specific constraints. ACMM keepers will manage position margins only under the following conditions:

3. DVX Keeper detects it and runs the ACMM function of the DVX account pulling margin from the Profitable Position into the DVX Account and feeding margin to the Losing Position.

To stop liquidation and adjust collateral, DVX uses two key functions: addAcmmMargin and subAcmmMargin

addAcmmMargin

Take 50% of Profit (When Profit > 50% of minimum maintenance margin)

1. Increases a losing position's collateral when it's at risk, using funds from the DVX Account.

2. If the DVX account has enough funds, it deducts them to increase the position's collateral. If not, no action is taken.

subAcmmMargin

Add free collaterals to make margin rate = initial margin rate (When margin rate < avg(initial margin rate, MMR))

If a position is taking profit, DVX will check it regularly and may deduct some of the profit. This helps keep enough collateral in the account to prevent liquidation.

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By continuously taking profits from profitable positions and add margin to losing positions, cross margin system can be implemented.

4. Details

However, due to the operational mechanisms of GMX/MUX, transferring profits from Position A to increase Position B’s collateral in one transaction is unfeasible. This process would necessitate a separate transaction for each action.

GMX and MUX differ in handling profit extraction:

• GMX

  • It lacks a direct profit extraction feature, requiring a collateral extraction function, which may heighten liquidation risks. Reducing the position size cuts down the profit proportionally, not entirely. To claim total profits, one must close the Position.

• MUX

  • Includes a function for direct profit extraction, allowing for selecting profit tokens (index tokens for long positions and USDC.e for short positions) within the DVX protocol.

5. Disclaimer

• With ACMM activated, margins can be shifted between positions across multiple exchanges.

• Depending on network and third-party exchange conditions, margins may not be moved in time.

• ACMM operates only if the amount of margin within a position is sufficiently large compared to the gas fees, which can vary based on network conditions.

• Since addAcmmMarginand subAcmmMargin are executed as separate transactions sequentially, it's possible that one may not work as intended.

• Fees are incurred when addAcmmMargin and subAcmmMargin are activated, and are charged in proportion to the amount of margin shifted at that time. The specific rate will be announced upon the launch of the ACMM feature.