# Automatic Deleveraging (ADL)

Strictly as a last resort, if LSP program participants and the Arkham Insurance Fund cannot fully cover a liquidated position, the exchange resorts to Automatic Deleveraging (ADL). During ADL, the system automatically closes out positions by matching them with opposing open positions held by other traders on the platform.

### How ADL Works:

The exchange looks for opposing positions (e.g., a long position matched against a short position) held by other participants, ranked by leverage and unrealized PnL (uPnL). The highest leverage/uPnL position will be closed out against the insolvent trader’s position, to bring the insolvent account back into compliance with the margin requirements.

### Impact on Other Traders:

Traders with high leverage and profits are prioritized for ADL matching, meaning their positions might be automatically reduced or closed to balance the risk on the exchange.

Auto-deleveraging is an important final safeguard on the solvency of the platform, and is strictly used as a last resort.


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