Progress and Response of Each PubDeck Project Following the Plunge ADL Yesterday, as record-breaking liquidations occurred, ADL, the last-ditch defense against liquidations, was activated on each exchange. This triggered server downtime and severe price fluctuations on several exchanges. What is ADL (Automatic Deleveraging)? (Separate explanation) Even CEXs maintain insurance funds to address liquidity shortages and cover losses, always preparing for the worst. Typically, the insurance fund is used to cover extreme one-sided liquidations or guarantee profits on opposing positions. However, when open interest (OI) accumulates to a level that prevents priority processing by the insurance fund, each exchange's preset ADL is triggered. ADL involves artificially intervening in the positions of opposing traders (traders with high profits) and shifting individual positions to maintain market stability. Ex- FTX, Luna: During the crash, accounts that had profited tens of times by shorting were all wiped out by ADL. When a large liquidation is expected, exchanges try to manage risk before ADL by using a method such as: Partial liquidation —> Backstop liquidation —> ADL. Partial liquidation On CEX and perp-dex, positions are liquidated before reaching the expected liquidation price, leading to an increase in the liquidation price. This is a first step to address this risk by reducing positions in advance. Backstop liquidation This method involves LPs/MMs taking positions near the bankruptcy price before the liquidation engine releases them into the market, mitigating the market impact. In this case, the insurance fund is used to compensate for the inaccurate operation of the backstop. ADL (Automatic Deleveraging) A method of reducing risk by reducing positions in the opposite direction when even the insurance fund and backstops aren't enough to fully cover losses. If all processes were to be liquidated, all losses would be... shared... Comparing Lighter, edgeX, Variational, and Hyperliquid: Hyperliquid - A massive liquidation of OI led to a 9.3% gain for the day. The liquidation amount was enormous, and HLP appears to have performed as intended, returning a decent return to HLP participants. (Jeff's post) Lighter - The market was down for a long time that day. It's believed that the plunge that began around 3:00 AM triggered a significant increase in spread gaps across many pairs, leading to a surge in limit order bots. While the front-end was unable to withstand the overload and was subsequently liquidated, API orders remained active. LLP's profits subsequently recorded a -5.3% return, but the extended downtime was the main issue. The clearing system itself functioned well and did not attack traders. —» They promised substantial compensation for the downtime and LLP users. Previously, perp-dexes responded with more than 100% compensation, so it would be great if they could properly handle the liquidation during the downtime. However, the scale of the problem is likely to be significant. (Link) edgeX - eLP generated a 3% return and maintained 24/7 uptime. Even if not all liquidity was provided by edgeX, the fact that the exchange was able to maintain its operations without downtime is significant. With the TGE approaching in November, it's encouraging that it survived an extreme stress test so close to the TGE! Variational - OLP: This logic, which has held up well and solely handles all liquidation and spread orders, including offsetting trades, is likely to yield the highest returns. Current volume $103.46M / OI $85.39M This is a really crazy number... (link)