What is auto-deleveraging? When winning gets you closed

Every leveraged crypto venue has a mechanism that can close your profitable position without asking, and it fires precisely when you are most right. It is the last step in a risk waterfall, it selects victims by a published formula, and it works differently on every architecture. Summary Auto-deleveraging is a backstop that force-closes profitable positions when a liquidation cannot be settled in the market and the venue’s buffers are exhausted, ensuring the exchange’s books balance. It exists because perpetual futures are zero-sum instruments backed by finite collateral: every long has a corresponding short, and when a losing side runs out of money the accounting must still close somewhere. It is the final step in a chain, margin call, liquidation into the market, backstop absorption by an insurance fund or protocol vault, and only then deleveraging of the winning side. Selection is not random: venues rank candidates by some combination of unrealized profit, effective leverage, and position size, so the most profitable and most leveraged positions are closed first. Architecture determines how likely you are to encounter it, since venues with deep, well-capitalized backstops absorb...