Which Type of Futures Contract Is More Prone to Socialized Losses?

Futures contracts that use coin-margined (inverse) collateral are historically more prone to socialized losses. In these contracts, the value of the collateral itself (e.g.

BTC) can fluctuate wildly, potentially exacerbating the deficit during a market crash. USDT-margined (linear) contracts, where collateral is a stablecoin, are generally less prone because the collateral's value is stable, simplifying risk management and deficit calculation.