Overview
A liquidation closes your position automatically when accumulated losses approach the size of your margin. The protocol must guarantee repayment to lenders, so it cannot let a position drift further into the red than the collateral can cover.
A position is liquidated when its losses reach 88% of the initial margin. You keep an enforced 12% buffer; the rest is your runway to ride out volatility or close manually.
For context: Hyperliquid liquidates around 60% margin loss, and most other perp DEXes sit in the 60-80% range. Atomic's deeper threshold gives positions more room before forced exit, while the keeper network and oracle design absorb the additional solvency risk on the protocol side (see Protocol → Keeper network).
Liquidation price
The exact price at which the 88% threshold is hit is computed when you open the position, from your margin amount and leverage. It is shown:
- in the order panel before you confirm, and
- in the Open Positions tab while the trade is live.
That number is the one to plan around. Use the calculator below to plug in your own margin, leverage, and entry price - it shows the adverse move and liquidation price on Atomic, side by side with Hyperliquid and the perp-DEX average.
| Venue | Liq threshold | Adverse move | Liquidation price |
|---|---|---|---|
| Atomic | 88.0% | 8.80% | - |
| Hyperliquid | 60.0% | 6.00% | - |
| Avg perp DEX | 70.0% | 7.00% | - |
Entry-time estimate. Funding and realized volatility erode the buffer while the position is open, so real liquidation distance on a multi-day trade is always tighter.
In plain terms: on a $1,000 margin trade, the position survives a drawdown of up to $880 on Atomic before forced exit, versus ~$600 on Hyperliquid. Position size is identical; what differs is how deep the protocol lets the trade run.
What happens on liquidation
When the threshold is hit, the position is closed by a keeper in a single transaction:
- The borrowed portion is repaid to the lending pool.
- Trading and liquidation fees are deducted.
- Whatever is left of the margin is returned to your wallet.
If the price moved fast - a wick, a thin book, a network congestion event - the residual returned to your wallet may be zero. The 12% buffer is a target, not a guarantee.
The liquidation price assumes the keeper can execute at or near that level. In thin liquidity or violent moves, the actual close price can be worse, and the recovered margin smaller than the buffer suggests.
How to avoid liquidation
- Use lower leverage. The single biggest lever - 5x roughly doubles your survivable adverse move vs 10x.
- Set a Stop Loss above the liquidation price. Closes you at a price you choose, with normal trading fees instead of liquidation fees.
- Watch funding. Long-held positions bleed buffer to funding even when the price is flat.
- Read the order panel. Liquidation price is shown before you sign - if it sits inside the day's normal range, the position is too aggressive.
Liquidation incurs a higher fee than a manual close, paid to the keeper that executes it. Closing yourself - even at a loss - is almost always cheaper than letting the protocol do it for you.