Margin & Allocation
What does a maker post, and where does it sit?
Initial margin, into a segregated account per relationship. You deposit collateral into your general balance — your free, global pool — then allocate from it into the SCA of each Master Agreement you bind. The SCA is segregated, per taker, non-rehypothecable. CRX does not lend it, reuse it, or net it against another counterparty. It moves only on on-chain proof.
Two pools, defined once:
- General balance. Your free, global collateral. Deposits land here; variation margin you win lands here.
- SCA. Your initial margin inside one agreement. It holds only IM — never accumulated P&L.
How does allocation work across positions?
You allocate per agreement, and the contract tracks the requirement as a running sum. When you bind a position, its IM is added to that agreement's requirement; when you close, it is subtracted. Your free margin in an agreement is SCA − requiredIM, read without iterating over positions. So you can run many positions against one taker and still know your free margin in one read.
await crx.write.allocate([maId, USDC, imMaker]); // general → this agreement's SCA
Deallocation is two-phase and exact: snapshot the free margin, then withdraw within the window, or it reverts as stale. You never over-withdraw and you never strand collateral.
How is your margin sized?
A percentage of notional, written into the quote as imLongBps / imShortBps — one rate per side, set by you, independent of the entry price. As the mark moves, the target drifts, and the contract re-trues the SCA toward it once a day inside the VM cycle. Under-margined, it tops up from your general balance. Over-margined, it refunds the excess. You do not run this; the cycle does.
Because you set it, the margin is your lever, not a fixed cost:
- A riskier client or a gappy pair carries a higher rate.
- A client you trust carries a tighter one — that is how you win the trade on terms, not on waived credit.
It is always collateral, never credit. A bank prices credit into its spread; you price risk into your margin.
What is the maker risk surface?
Three things you carry, and where each is bounded:
| Risk | What it is | What bounds it |
|---|---|---|
| Market risk | the rate moves against your side | VM clears it daily into general balance; IM buffers the gap |
| Counterparty risk | the taker cannot pay | you are paid in full from the taker's own estate, never your collateral |
| Funding risk | margin sits locked | post in a yield-bearing token so it earns while locked |
You never send a margin call, chase a taker, or file a claim. The contract removes a taker that runs out of collateral, at the margin line, before the loss reaches you. That removal is solvency-based — the venue removes a taker that runs out of collateral, and does nothing else for behaviour.
What happens when a taker defaults?
You are made whole from the taker's own estate, in a fixed order: its SCA in your agreement first, then its general balance, then the guarantee fund. One counterparty's collateral is never spent on another's claim — that separation is what keeps CRX bilateral rather than a clearing house. See Liquidation & Default Waterfall (~5 min).
A taker reaches your collateral only after its own is gone — and removal happens long before that line.
Next: Answer an RFQ (~5 min) — the calls that turn a priced quote into a margined position.