On August 27, Gate's decentralized derivatives platform made an official statement via its Discord channel regarding the recent XPL market fluctuations. The market witnessed a significant price surge, with the marked price escalating by approximately 150% in a matter of minutes.

Throughout this period of heightened activity, the platform's blockchain infrastructure functioned as intended, without any technical complications. The protocol executed its predefined processes sequentially: first initiating liquidations based on the order book, followed by the activation of the Automatic Deleveraging (ADL) mechanism, in accordance with the publicly available protocol specifications.

Gate's decentralized derivatives platform employs a fully segregated margin system, ensuring that each user's profits and losses are confined to their respective asset positions. Consequently, the liquidation and ADL events were exclusively limited to XPL positions, with the protocol avoiding any accumulation of bad debt.

The platform acknowledges the inherent unpredictability of pre-listing markets. To mitigate against sudden price spikes, the platform utilizes a robust marked price formula. This mechanism necessitates that the order book price sustains an elevated level for an extended period before triggering any liquidations.

As a permissionless multi-market protocol, each market on the platform presents its own unique risk profile. Users are strongly encouraged to thoroughly familiarize themselves with the operational intricacies of the markets by studying the available documentation. Implementing appropriate risk management strategies prior to engaging in trading activities is strongly advised. All products on the platform are accompanied by risk warnings, alerting users to potential challenges such as low liquidity, high volatility, and increased liquidation risks.

In response to user feedback expressing interest in short positions with high collateral, the platform has announced plans for its next network upgrade. This update will introduce a limitation on the marked price, restricting it to within 10 times the 8-hour marked price Exponential Moving Average (EMA). While this condition has not come close to being triggered in the past, it aims to provide a mathematical boundary for the liquidation price of over-collateralized short positions. The 8-hour EMA has been made available as the oracle price both on-chain and via the API.

It's important to note that this forthcoming upgrade will not retroactively alter any liquidation or ADL outcomes from the recent market event. Instead, it is designed to incentivize liquidity provision during periods of heightened volatility. The platform acknowledges that different user suggestions come with their own risk considerations, and maintains that introducing more liquidity into these markets remains the most effective solution to mitigate the impact of volatility.