According to this article, it is a good opportunity to learn about Backpack and clearing mechanisms. In extreme market conditions, the orderly progress of clearing directly determines the security of the exchange and the preservation of user assets. Backpack adopts a multi-level clearing mechanism, striving to protect users while maintaining system stability. Whether trading in the field of encryption or traditional finance, one will face fluctuations and risks. If the risk control and liquidation mechanisms are insufficient, an extreme market situation may lead to financial losses and even bankruptcy. The lesson of FTX tells us that a so-called powerful risk control engine, without transparency and auditing, can also lead to disasters. Liquidation logic: 1. Clearing in the order book: When the user's margin maintenance rate reaches a critical value, the system first cancels unexecuted orders and attempts to sell or hedge them in batches on the pending order book at the best possible price. This can reduce the impact on the market and leave room for users. 2. Backstop: If the liquidity of the order book is insufficient or the market fluctuates excessively, the system will transfer the position to the market makers participating in the backstop plan, who will take on the risk and profit from it. This avoids further impact on the market. 3. Automatic reduction of inventory (ADL): If neither of the first two steps can complete the liquidation, it enters the final security mechanism. The system enforces hedging or reduction of positions to ensure overall risk is zero and prevent platform defaults. Many exchanges in the industry engage in self operated market making, which may provide additional motivation for clearing targets, such as wanting to make as much profit as possible from the price difference. Backpack does not operate self operated market making, and has no intention of clearing profits or monopolizing clearing traffic. Instead, it allows the market to complete spontaneously, which is theoretically more fair and transparent. Clearing is not meant to bring down users, but a necessary process for exchanges to maintain stability and protect more investors. Any margin system must accept bankruptcy or liquidation as a legal state, otherwise it ignores the reality of extreme risks. For users who want to gain a deeper understanding of a certain exchange, it is necessary to pay attention to both its risk control and clearing mechanisms, as this is the true last line of defense to protect assets.