Introduction to the platform collateralized borrowing limit
Why is there a platform collateralized borrowing limit?
To manage overall platform risk, OKX imposes a platform-wide collateralized borrowing limit for each collateral cryptocurrency across trading accounts. This platform collateralized borrowing limit (“platform limit”) will consider, among other factors, the asset’s liquidity, trading depth, total platform volume, and borrowing volume.
Unaffected scenarios
When a crypto reaches the platform limit:
If your trading account doesn’t hold this crypto, there’s no impact.
If your trading account holds this crypto, the following trading and transfer activities won’t be affected:
Spot mode (borrowing on): transfer in, transfer out, trading of all instruments
Spot mode (borrowing off): transfer in and spot trading when there’s no borrowing frozen margin in the trading account
Futures mode: transfer in, transfer out, spot, expiry futures, perpetual futures, options trading
Trading in advanced mode (multi-currency and portfolio margin modes): transfer in and spot trading when there’s no derivatives or borrowing frozen margin in the trading account
For each crypto’s discount rate details, please refer to discount rates.
Affected scenarios
When collateralized borrowing on a crypto reaches the platform limit and your trading account holds this crypto, the following trading and transfer out activities will be affected:
Spot mode (borrowing on):
When trading spot, and there's no borrowing frozen margin, this crypto won’t be included in the account’s available margin. Trading will be restricted if the account’s available margin is insufficient after placing the order.
When borrowing while trading spot, this crypto won’t be included in the account’s available margin and cannot be used as margin for borrowing.
When transferring out, the collateral crypto won’t be included in the account’s available margin. As a result of decreased available margin, the amount you can transfer may be lower.
The collateral crypto is included in the account’s adjusted equity. This crypto doesn’t impact your account’s margin ratio, and your positions won’t be liquidated as a result of this limit.
Margin trading in futures mode (cross-margin and isolated margin modes):
You can’t open positions with margin trading pairs that include this crypto. Existing positions and their floating profit and loss (PnL) are unaffected, and the margin ratio is calculated as usual. Additionally, you can only close your positions using reduce-only orders.
You can trade margin pairs that do not include this crypto as usual.
Trading in advanced mode (multi-currency and portfolio margin modes):
When trading spot, and there's no derivatives or borrowing frozen margin in the trading account, this crypto won’t be included in the account’s available margin. Trading will be restricted if the account’s available margin is insufficient after placing the order.
When trading spot margin, expiry futures, perpetual futures, and options (cross-margin and isolated margin), the collateral crypto won’t be included in the account’s available margin. This means that the collateral crypto won’t provide margin for borrowing or opening new positions.
When trading margin pairs in isolated mode, you can’t open new positions on margin trading pairs that include this crypto. You can close your existing positions using reduce-only orders. You can trade margin pairs that don’t include this crypto as usual.
When transferring out, the collateral crypto won’t be included in the account’s available margin. As a result of decreased available margin, the amount you can transfer may be lower.
The collateral crypto is included in the account’s adjusted equity and doesn’t impact your account’s margin ratio. Your positions won’t be liquidated as a result of this limit.
Receiving notifications when the collateral limit is reached
When the platform-wide collateralized borrowing of a certain crypto approaches the platform’s collateral limit, the system will notify you of a potential auto conversion if you’ve set this crypto as collateral and have large borrowings. This notification will be sent to your email and through in-platform messages.
Auto conversion
When the total liability for each crypto set as collateral exceeds a certain percentage of the platform's total limit, the auto-conversion mechanism may be triggered. This may result in the automatic sale of excess collateral crypto if you’ve set this crypto as collateral and have large borrowings. This auto-conversion mechanism is used to lower the overall collateralized borrowing of that crypto on the platform. This would involve one or more of the following steps, in any order, at OKX’s sole discretion:
Ranking users based on liability with the excess collateral crypto, and then ordering them from largest to smallest collateralized borrowing.
Canceling orders involving the excess collateral crypto.
Selling the excess collateral crypto in your accounts.
Canceling any pending margin orders involving the excess collateral crypto.
Closing margin positions in the excess collateral crypto, including cross-margin and isolated margin positions.
Auto-conversion methods may vary by account mode. To minimize market impact, the platform carries out auto conversion in batches, and has sole discretion to adjust the batch selling timing and quantities based on market conditions.
During processing, the system will notify you of the auto conversion through email and in-platform messages. For cryptocurrencies that have triggered auto conversion, the auto-conversion process will immediately terminate when the platform-wide collateralized borrowing amount drops below the platform’s collateral limit.