How Do Different Margin Tiers (E.g. Tier 1, Tier 2) Influence the Maintenance Margin Rate?

Margin tiers are a risk management tool that segments traders based on their position size. Larger positions (higher tiers) are subject to progressively higher maintenance margin rates.

This is because larger positions pose a greater systemic risk to the exchange's insurance fund and liquidity. By increasing the margin requirement for large traders, the exchange ensures they maintain a larger collateral buffer, making them less likely to incur a loss that the exchange must absorb.