The collateral deposited to maintain a leveraged position. Initial margin is the minimum to open a position; maintenance margin is the minimum to keep it open. If the margin ratio drops below maintenance due to unrealized losses, the position faces liquidation. Margin can be cross (shared across positions) or isolated (per-position).
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The collateral deposited to maintain a leveraged position. Initial margin is the minimum to open a position; maintenance margin is the minimum to keep it open. If the margin ratio drops below maintenance due to unrealized losses, the position faces liquidation. Margin can be cross (shared across positions) or isolated (per-position).
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AMMs, routing, liquidity, lending, and trading infrastructure.
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Margin (margin) Category: DeFi Definition: The collateral deposited to maintain a leveraged position. Initial margin is the minimum to open a position; maintenance margin is the minimum to keep it open. If the margin ratio drops below maintenance due to unrealized losses, the position faces liquidation. Margin can be cross (shared across positions) or isolated (per-position). Related: Leverage, Collateral
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Using borrowed funds to amplify trading exposure beyond deposited capital. In perps, 10x leverage means $100 collateral controls a $1,000 position. Gains and losses are multiplied proportionally. If losses approach the collateral amount, the position is liquidated. Higher leverage increases both potential returns and liquidation risk.
Assets deposited into a lending protocol to secure a loan. Each asset has a collateral factor (e.g., SOL at 80% means $100 of SOL supports $80 in borrows). If the collateral value drops below the maintenance threshold, the position is liquidated. Volatile assets have lower collateral factors than stablecoins.
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A margin mode where the entire account balance serves as collateral across all open positions. Unrealized profits from one position can offset losses in another, reducing overall liquidation risk. Cross margin is more capital-efficient but means a single bad position can threaten the entire account. Drift Protocol on Solana uses cross-margin by default for its perpetuals and spot margin trading.
A margin mode where collateral is dedicated to a single position, limiting the maximum loss to only the margin allocated to that trade. Other positions and the remaining account balance are unaffected if the isolated position is liquidated. Traders use isolated margin for higher-risk trades to cap downside exposure. Most Solana perps platforms offer both cross and isolated margin options.
A liquidity protocol on Solana (rebranded from Mercurial Finance) that introduced the Dynamic Liquidity Market Maker (DLMM) and Dynamic AMM, which automatically adjust fees and liquidity distribution based on real-time market activity. Meteora became a top-3 DEX by volume in 2025 driven by high-profile token launches using its concentrated liquidity pools.
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Using borrowed funds to amplify trading exposure beyond deposited capital. In perps, 10x leverage means $100 collateral controls a $1,000 position. Gains and losses are multiplied proportionally. If losses approach the collateral amount, the position is liquidated. Higher leverage increases both potential returns and liquidation risk.
Assets deposited into a lending protocol to secure a loan. Each asset has a collateral factor (e.g., SOL at 80% means $100 of SOL supports $80 in borrows). If the collateral value drops below the maintenance threshold, the position is liquidated. Volatile assets have lower collateral factors than stablecoins.
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A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
A token issued to liquidity providers representing their proportional share of a pool's reserves and accrued fees. LP tokens can be burned to withdraw the underlying assets. The value of LP tokens changes as the pool's token ratios shift and fees accumulate. LP tokens are often stakeable in yield farming programs for additional rewards.