What Are the Two Primary Outcomes of a Liquidation in Relation to the Insurance Fund?
The two primary outcomes are a surplus or a deficit. A surplus occurs when the liquidation order is executed at a price better than the bankruptcy price.
The residual margin is then contributed to the insurance fund, helping it grow. A deficit occurs when the liquidation order is executed at a price worse than the bankruptcy price, resulting in a negative balance.
This deficit is then covered by the insurance fund, causing it to shrink.
