X-Mode
X-Mode is an advanced margin mode designed to maximize capital efficiency for portfolios of highly correlated assets.
Core Concept
Assets with strong correlation are grouped into clusters.
Collateral requirements are reduced for clustered assets, reflecting the fact that offsetting exposures lower overall risk.
Allows users to reuse collateral more efficiently without increasing systemic risk.
How It Works
Collateral is pooled across all positions, similar to Portfolio Margin.
The Risk Engine identifies clusters of assets with near-1 correlation.
DV01 exposure is calculated per cluster, enabling margin offsets across positions within the cluster.
Open orders block collateral based on worst-case execution within the cluster, one side at a time.
Benefits
Higher leverage with the same collateral compared to standard Portfolio Margin.
Lower liquidation probability due to clustered risk offsets.
Efficient capital use for large or diversified positions.
Ideal for institutional users, DAOs, or funds managing multiple correlated assets.
Key Takeaways
X-Mode optimizes collateral by recognizing correlation across assets.
Supports complex multi-position strategies without over-collateralization.
Combines capital efficiency with robust risk controls.
Perfect for users who want maximum yield leverage safely.
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