What Is the Ethical Debate Surrounding Liquidation Fees?

The ethical debate centers on whether the exchange is incentivized to allow liquidations to occur, given that it profits from the liquidation fee. Critics argue that the fee is excessive and that the exchange should prioritize preventing liquidations over profiting from them, especially when the fee is taken from an already losing position.

What Happens If a Crypto Exchange’s Margin Requirements Are Too Low?
What Are the Arguments against Trading Halts, Particularly concerning Market Efficiency and Trapped Liquidity?
What Is the ‘Sticky-Strike’ versus ‘Sticky-Delta’ Debate in Volatility Modeling?
Why Is the Base Fee Burned Instead of Going to Validators?
What Is the Primary Risk Associated with Losing One of the Keys in a Multisig Setup?
How Does a Decentralized Autonomous Organization (DAO) Challenge the ‘Common Enterprise’ Prong of Howey?
What Is the Relationship between the Block Size Debate and Transaction Fees?
What Is the Role of Risk-Based Pricing and Fees in Mitigating Moral Hazard?

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