When a trader opens a position, a commitment and a liquidation fee are locked in their balance. Commitment size depends on the leverage. If the position has a loss more than the commitment size (and a 10% tolerance range), the smart contract allows anyone to liquidate the position and earn the liquidation fee. At any time, traders can add additional commitment to their positions to prevent liquidation. When a trader closes their position, commitment and liquidation fee are returned to their balance.