Per-Market Leverage

Per-Market leverage introduces market specific leverage limits, giving traders finer control over their positions while improving account safety.

Instead of every position sharing a single account level limit, each perpetual market now defines its own maximum leverage cap.

This allows higher leverage on stable assets and stricter limits on more volatile ones.

How Per-Market Leverage Works

Each perpetual market defines its own maximum leverage through its protocol-set initial margin ratio (margin_ratio_initial), with an additional surcharge (the IMF factor) applied to large positions. This is the most leverage anyone can use in that market.

On top of the market cap, you can optionally hold yourself to a lower limit — either account-wide (account.max_margin_ratio) or per position (position.max_margin_ratio). These overrides can only make your limit more conservative; they can never raise it above the market’s cap.

When evaluating a position, Velocity uses the largest (most conservative) applicable margin ratio — equivalently, the lowest leverage:


effective_margin_ratio = max(
    market.margin_ratio_initial,   // protocol cap for the market (+ IMF surcharge on large size)
    account.max_margin_ratio,      // your optional account-wide cap
    position.max_margin_ratio      // your optional per-position cap
)

Market	Market cap (`margin_ratio_initial`)	Your optional override	Effective leverage	Result
SOL-PERP	20x (5% margin)	none	20x	Market cap applies
SOL-PERP	20x (5% margin)	10x	10x	Your override is more conservative

Illustrative. SOL-PERP’s live initial margin ratio is 5% (20x); each market’s current values live on-chain.

A higher margin ratio means lower leverage, so the most conservative limit always wins. From this ratio, the protocol derives the maximum position size you can open with your available collateral and the liquidation threshold for that position.

Risk and Control

Per-market leverage gives traders more flexibility and control:

Apply different leverage limits for different strategies or market conditions.
High-risk markets can be capped tightly without restricting more stable ones.
Each market’s maximum leverage and liquidation threshold are clear and predictable.

Per-market leverage caps do not isolate risk between positions. Unless a position is an isolated position, all of a subaccount’s positions share one pool of collateral and one maintenance-margin requirement — a large loss on one market (say HYPE-PERP) still draws down the collateral backing your other positions (say BTC-PERP) and can contribute to a cross-margin liquidation. To fully segregate a position’s collateral and liquidation, use an isolated position.

Code Implementation

Files and functions

Per-market leverage logic is implemented in:

state/user.rs stores max_margin_ratio on the PerpPosition struct
VelocityClient.updateUserPerpPositionCustomMarginRatio (@velocity-exchange/sdk, velocityClient.ts) updates per-position settings