Crypto Futures & Leverage Guides

Liquidation Price, Funding Rates, and Impermanent Loss Explained

Leverage and liquidity provision both come with a specific kind of risk that a plain spot trade doesn't have. This category is dedicated to understanding that risk before it becomes an actual loss, starting with how liquidation price is calculated in crypto futures and how to avoid liquidation when trading with leverage in the first place.

On the futures side, you'll find a detailed explanation of what a funding rate is, how funding fees affect long-term futures positions, and how APY compares to APR once compounding frequency is factored in. Position sizing gets its own dedicated coverage too, including position sizing rules every crypto trader should know and how to size positions based on your actual risk tolerance rather than a fixed percentage everyone repeats.

For anyone providing liquidity instead of trading futures, two guides walk through what impermanent loss actually is and practical ways to reduce it when providing liquidity to a pool. Every article in this category is written around the same idea: leverage and liquidity provision amplify outcomes in both directions, so understanding the mechanism matters more here than almost anywhere else in trading.