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This page explains the liquidation mechanism on Jupiter Perps: what triggers it, how the liquidation price is calculated for long and short positions, how it drifts over time, and how to manage your risk.

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What Is Liquidation?

Liquidation is the automatic closure of a position by the protocol when the trader’s collateral is no longer sufficient to cover the outstanding losses and fees. It is triggered when the oracle price reaches the position’s liquidation price.
When a position is liquidated, all remaining collateral is forfeited to the JLP as a liquidation fee. You will not receive any portion of your collateral back. Only deposit collateral that is within your risk tolerance.

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Liquidation Trigger

PositionLiquidation occurs when
LongOracle price falls below the liquidation price
ShortOracle price rises above the liquidation price

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Liquidation Price Formula

The liquidation price is the oracle price at which the position’s effective collateral (after fees) equals the minimum margin required by the protocol.

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Long Position

LiquidationPrice(Long)=price−(∣collateralsize−closefee−borrowfee−(size/maxlev)∣∗price)/sizeLiquidation Price (Long) = price - (|collateral_size - close_fee - borrow_fee - (size / max_lev)| * price) / size

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Short Position

LiquidationPrice(Short)=price+(∣collateralsize−closefee−borrowfee−(size/maxlev)∣∗price)/sizeLiquidation Price (Short) = price + (|collateral_size - close_fee - borrow_fee - (size / max_lev)| * price) / size

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Variable Definitions

VariableDefinition
priceAverage entry price (USD) of the position
collateral_sizeCurrent collateral value (USD)
close_feeEstimated close fee (USD) — base fee + price impact fee
borrow_feeAccumulated borrow fees (USD) to date
sizePosition size (USD)
max_levProtocol-level maximum leverage: 500
max_lev in the formula refers to the protocol limit of 500x, which is used to define the minimum maintenance margin. This is distinct from the 250x trading maximum available when opening a position.

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How the Liquidation Price Changes Over Time

The liquidation price is not static. It moves as fees accumulate:
  • Borrow fees are deducted from collateral hourly. As collateral decreases, the liquidation price drifts toward the current market price.
  • The effect is most significant at leverage above 10x and for positions held over extended periods.
A position that appears safely distant from liquidation when opened can approach its liquidation price over time due to borrow fee accumulation — even without any price movement.

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Liquidation Example

Setup: $10,000 collateral long position approaching liquidation
ItemValue
Position collateral$10,000
Remaining collateral after loss + fees$1,000
Liquidation penalty$1,000 (entire remaining collateral goes to JLP)
Returned to trader$0

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How to Avoid Liquidation

Monitor your liquidation price

Check the Positions tab regularly, especially during volatile market conditions or for long-duration positions.

Deposit additional collateral

Adding collateral reduces leverage and moves the liquidation price further from the current market price. Use the Edit button on any open position.

Use Stop Loss orders

A stop loss closes the position before it reaches the liquidation price, preserving a portion of your collateral.

Reduce leverage

Lower leverage means a larger price movement is required before liquidation is triggered.