How Can a DAO Treasury Manage Liquidation Risk on a Perpetual Swap Position?

Liquidation risk, where a leveraged position is automatically closed due to insufficient margin, can be managed by maintaining a high collateralization ratio. The DAO should avoid excessive leverage and monitor the position's health constantly.

Adding more collateral (margin) to the position or partially closing the position to reduce the overall size can prevent a liquidation event during market volatility.