Margin & Collateral
Effective margin management is crucial for perpetual futures trading. This page explains Yamata’s cross-margin system, how collateral works (including using multiple asset types), and how the platform handles collateral valuation and transfers.
Cross-Margin System
Cross-margin means all your open positions draw from one shared margin pool, rather than isolating margin per position. Key points:
Unified Margin Account: When you trade on Yamata Perps, you have a single margin account (your Perps wallet balance) that backs all positions. Gains in one position can immediately offset losses in another because the collateral is shared.
Capital Efficiency: Cross-margin maximizes your capital usage. Unused equity in the account automatically provides cushioning for any position that moves against you. This reduces the likelihood of liquidation compared to isolated margin (where each position’s collateral is separate).
No Manual Allocation: You do not need to assign specific collateral to each new trade – as long as you have available margin in your Perps account, you can open positions. The platform will calculate margin requirements and ensure your overall account meets the necessary thresholds (initial and maintenance margins).
Unified PnL Settlement: All profit and loss from your trades accrue to the same account balance. If one trade is profitable and another loses, the net P&L is what matters for your account equity.
Note: Yamata currently supports only cross-margin mode for Perpetuals. In the future, isolated margin may be introduced for those who want to limit risk per position, but cross-margin is the default and only mode at launch.
Multi-Collateral Support
Yamata allows multiple asset types to be used as collateral for Perps, giving you flexibility beyond just USDC. You can deposit supported assets (for example, USDC, USDT, ETH) into your Perps account. The system will automatically convert and discount these collateral values for margin calculations:
Supported Collateral Assets: Initially, USDC (USD Coin) is the primary margin asset. Additionally, assets like USDT, ETH, and other major coins may be enabled as collateral. All collateral is held in your Perps smart contract wallet.
Collateral Weight & Haircuts: Each non-USDC asset has a collateral weight (or haircut factor) based on its risk profile. For instance, a relatively stable asset like USDT might have a 100% weight (no haircut) or slightly less, while a more volatile asset like ETH might be given a weight like 90%. This means if you deposit $100 worth of ETH, only $90 counts toward your usable collateral. More volatile or less liquid assets have larger haircuts to protect the system from rapid value swings.
USDC as Reference: All collateral values are standardized in USDC terms. Yamata continuously uses market prices (index prices) to determine the USDC equivalent value of your non-stablecoin collateral. This Collateral Value is updated in real time as prices change.
Automatic Conversion for P&L: Because all trading profits/losses settle in USDC, if you realize a loss and do not hold enough USDC in your collateral mix, the platform will automatically swap some of your non-USDC collateral into USDC to cover that loss. This ensures your account’s obligations are met in USDC. For example, if you only have ETH as collateral and you incur a loss of 500 USDC on a trade, Yamata’s smart contracts will convert the needed amount of ETH into USDC (using oracle or DEX pricing) to realize the loss.
Manual Conversion: You can manually convert collateral assets within your account if you wish to adjust your composition (for instance, converting some of your deposited ETH into USDC for more stable collateral). However, Yamata’s system generally handles conversions only as needed for settlement or risk (see Risk Engine below for auto-conversion thresholds).
Managing Collateral Transfers
Depositing Collateral: To add margin, transfer assets from your Spot wallet to your Perps wallet via the Yamata interface. This is an on-chain transaction moving funds into the Perpetuals smart contract. Once confirmed, your Available Balance for trading increases accordingly. Ensure you deposit approved collateral types; unsupported assets must be swapped to a supported asset (e.g., via Yamata’s spot trading or externally) before transferring.
Withdrawing Collateral: If you want to free up funds, you can transfer assets back from the Perps wallet to your Spot wallet. However, you must maintain enough collateral to support any open positions. Yamata will prevent withdrawals that would drop your account below the required maintenance margin. Typically, you should close positions or reduce leverage before pulling collateral out.
Initial & Maintenance Margin
Whenever you open a position, the system calculates Initial Margin required. This is the amount of collateral that will be tied up to support the new position:
Initial Margin: The minimum collateral needed to open a position. It’s determined by the notional size of your position and the leverage. For example, opening a $10,000 position at 10× leverage requires $1,000 initial margin (which is 10% of notional). Higher leverage means smaller initial margin per contract (e.g., 50× leverage requires only 2% of notional as margin). The platform will automatically allocate this from your available balance when you place an order.
Maintenance Margin: Once a position is open, you must maintain a smaller amount of collateral per position to keep it from liquidating. Maintenance margin is typically a percentage of the position value (for example, 50% of initial margin requirement). If your account equity falls below the total maintenance margin required for all positions, you risk liquidation. Yamata’s risk engine constantly checks this (see Risk Engine & Liquidation section for details).
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