How Does ‘Socialization’ of Losses Differ from a ‘Clawback’ Mechanism?

Socialization of losses is a pre-defined, proportional distribution of a deficit across all profitable traders, typically a small reduction in their realized PnL. A clawback is a much rarer, extreme, and often retroactive measure where the exchange forcibly reclaims a large amount of funds, potentially from past profits, to cover a catastrophic, system-threatening loss.