Announcements Gate Will Upgrade Risk Limit Mechanism for Improved Trading Risk Control and User Experience

Gate Will Upgrade Risk Limit Mechanism for Improved Trading Risk Control and User Experience

2025-07-29 03:29:54 UTC 117917 Read

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To further improve trading experience and mitigate trading risks for our users, Gate will upgrade the risk limit mechanism for perpetual futures trading to a dynamic risk limit mechanism. This new mechanism can auto-apply an optimal risk limit to a user's position based on position value, reducing the occurrences of systemic risks in extreme market conditions and  enhancing the stability of the entire perpetual market.

Risk limit is an essential risk management tool that helps reduce potential risks caused by market volatility by setting a maximum position size a user can hold. In futures trading, the risk limit prevents extreme price swings that can happen due to large-scale liquidations.

**Applicable products:**
1. USDT Perpetual
2. BTC Perpetual

**Major changes:**
**1. Risk limits will be automatically adjusted based on leverage**
The previous mechanism requiring manual selection of risk tiers will be removed. Instead, the system will automatically match the maximum allowable position value based on the user’s selected leverage. In addition, the current position value and any new orders will dynamically influence the available leverage range, enabling more flexible and secure risk management.

**2. Optimized MMR calculation logic**
Instead of using a flat maintenance margin ratio corresponding to a certain risk limit level, the new mechanism will use a tiered MMR structure when calculating the maintenance margin requirement for a position. This will reduce maintenance margin required and thus reduce unnecessary liquidation.

**Maintenance Margin Calculation**
![](https://gimg2.gateimg.com/image/2131202507291017299900506507.png)

Assuming user A holds a position of 1.2 million USDT in BTCUSDT market. Under the old mechanism, the user has to choose a risk limit of 2 million USDT, which has a corresponding MMR of 0.5%.
Current mechanism: the MM required for the position: 1.2 Million × 0.5% = 6,000 USDT
New mechanism: the MM required for the position: 1 million × 0.4% + (1.2 Million - 1 Million ) × 0.45% = 4,900 USDT

**Note:**
Gate will gradually upgrade the risk limit mechanism for users in batches, starting July 29, 2025. Please pay attention to the new version release and update the app timely.

With this update, the new risk limit parameters and mechanism will take effect. Some long-term positions may experience a reduced MMR. To protect these positions, a pre-upgrade risk assessment will be conducted for each account to prevent liquidation to ensure that no account falls below the 200% MMR threshold due to the changes.

New Risk Limit Mechanism: There may be cases where MMR < 100% without triggering liquidation. Compared with the previous manual risk limit adjustment, the new mechanism calculates maintenance margin using a tiered algorithm based on position value. This lowers the required maintenance margin for the same position and reduces the likelihood of liquidation. We recommend upgrading to app version v7.10.0 or above for the best experience.

Thank you for your continued support for Gate.

<sp>
Gate Team
July 29, 2025
<sp>
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Gate Will Upgrade Risk Limit Mechanism for Improved Trading Risk Control and User Experience

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