The Vault and your margin

One pool underwrites every trade. Your collateral is what backs yours.

The Vault is one liquidity pool that takes the other side of every trade on the exchange. Liquidity providers deposit USDC and hold sLP shares in it. Your margin is separate: the collateral behind one position backs that position alone, and a losing trade cannot reach across and drain a winning one.

One pool, every trade

When traders lose, the pool gains. When traders win, the pool pays. It also earns every borrow fee and the part of funding that no trader on the other side absorbs. An sLP share is a claim on a fraction of whatever is left over.

This is why there is no order book and no waiting: the counterparty is always there. It is also why the Vault window is worth a look even if you never provide liquidity, because the pool's spare capacity is the exchange's capacity.

Utilization, and why size gets capped

Reserved is the pool's own cash held back against positions that are still open. Idle Liquidity is the rest, and it is what withdrawals are paid from.

utilization = reserved / (reserved + idle)

The higher utilization runs, the less the pool has left to pay out with, and the more borrow costs. The same headroom sets the largest position a market will take, which is the max size the order ticket enforces.

Your margin

Margin here is per position, not per account. What you paid into a position is what backs it, and a losing trade cannot reach across and drain a winning one. Each market publishes two margin levels:

Initial margin: The collateral a new position needs, as a fraction of its size. It sets the leverage cap: max leverage = 1 / initial margin. A 5% initial margin is a cap of 20x.
Maintenance margin: The floor a position's health may not fall through. It is lower than the initial margin, which is what gives a position opened at maximum leverage some room before liquidation.