No. Socialized Loss System calculates the total contract loss and spreads it out proportionately to all profitable traders.
A socialized loss system has some clear disadvantages:
- A single risky trader can create a large loss for all profiting traders, including low-risk traders.
- Traders also cannot withdraw their realized profit until the settlement date of the specific contracts.
Instead, Bybit adopts an Auto-Deleveraging (ADL) system to improve the fairness of our exchange.
For more information on the Auto Deleveraging (ADL) system, please click here.