How Do Smart Contracts Handle the Continuous Mark-to-Market Requirement of Futures Contracts?

Smart contracts automate the mark-to-market process by using real-time price feeds delivered by oracles. They continuously calculate the unrealized profit or loss of the futures position and update the margin account balance.

If the loss exceeds the maintenance margin, the contract automatically triggers a margin call or liquidation. This automated, continuous process replaces the end-of-day, manual reconciliation typical in traditional finance.