X-Mode (Coming Soon)

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

• Correlated Discount factors are applied to each provided asset

• 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