Skip to main content
Learn

What Is the Alternative to ADL Used by Some Exchanges?

The 'socialized loss' system, which proportionally distributes remaining losses across all profitable traders.
Greeks.Live23.11.25

What Is the Alternative to ADL Used by Some Exchanges?

The primary alternative to the ADL system is a 'socialized loss' system. In this model, if the insurance fund is depleted, the remaining losses are distributed proportionally among all profitable traders.

This spreads the loss thinly across a wider base, rather than targeting a few highly profitable and leveraged traders. However, it can still be unpopular.

How Does ADL Differ from ‘Socialized Losses’ in Futures Trading?
Can a Depleted Insurance Fund Lead to a Loss of Collateral for Non-Bankrupt Traders?
Can an Exchange Use a Combination of ADL and Socialized Losses?
What Is ‘Auto-Deleveraging’ (ADL) and How Is It Used by Crypto Exchanges?

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.