What Are the Alternatives to ADL for Managing a Deficit?

The primary alternative to Auto-Deleveraging (ADL) is a robust insurance fund, which covers deficits without affecting profitable traders. Other alternatives, though less common on major crypto exchanges now, include a 'socialized loss' system, where the deficit is spread across all profitable traders proportionally.

Some exchanges also employ a 'clawback' mechanism, where the exchange may attempt to recover funds from other sources, but this is complex and rare.