Backpack follows a multi-currency, cross-margin model designed to maximize capital efficiency.
Unlike other exchanges that force you to segregate your balances in separate wallets (spot, futures, margin, earn, etc), Backpack offers a single cross-margin wallet that can be used to trade all products. If you would like to isolate risk, you can seamlessly create a new subaccount, which is completely segregated from other subaccounts.
You can use a variety of non-USD assets as collateral, which contribute towards your account equity in order to open and maintain futures and borrow positions.
To provide the highest level of capital efficiency amongst all centralized exchanges, Backpack allows you to use 100% of lent assets as collateral, enabling them to earn yield even when it's being used to maintain positions. Additionally, unrealized profits are cycled into the borrow lending pool and generate yield as well, providing further capital efficiency.
Here's a quick video walkthrough that shows you how it works:
Collateral on Backpack is calculated in USD terms. Assets that are eligible for collateral receive a Collateral Value, which contribute towards your Net Equity.
Collateral Value is calculated as follows: Token Quantity * Mark Price * Weight
Each collateral asset has a default Collateral Weight, or in other words, a haircut. An asset's Collateral Weight may decrease based on how large the collateral amount is to adjust for risk and the time needed to liquidate. The Collateral Value curve for each of your assets can be found in the statements page.
Here’s an example to illustrate how Collateral Value is calculated (note that the haircut values below are not accurate. Check the statements page to see the actual weights):
As illustrated above, while this user holds $120,000 worth of assets, their Total Account Collateral (i.e. the sum of the Collateral Value of all their assets), is $116,300.
Equity represents the risk-adjusted value of your account, which can be used to maintain futures and borrow positions. This is also known as your Margin Balance.
Net Equity is calculated as follows = Total Account Collateral + Total Unrealized PnL + Unsettled Balances - Total Borrow Liability
You can find all these values and a full breakdown of your account’s equity in your .
Available Equity is the capital you can use to open new positions or orders. It's calculated as Net Equity - Equity Locked, where Equity Locked represents margin tied up in open positions and orders that increase exposure. To maximize efficiency, your unrealized profits also count toward Available Equity.
Your Account Margin (AKA Margin Health) can be evaluated using these two data points:
1) Initial Margin Rate (IMR) - this illustrates how much Available Equity is left to open new positions. Once IMR reaches 100%, no new positions that increase risk can be opened.
IMR = Total Initial Margin / Net Equity
You can see your Initial Margin Balance (i.e. how much initial margin is being used across all your positions) in the Margin Overview section on the trade page when you hover over your Initial Margin percentage.
As a rule of thumb, the Initial Margin required to open a new position can be calculated as follows:
Initial Margin = Position Notional Value / Max Account Leverage
For example, if your max account leverage is 10x and you want to open a $10,000 position, your initial margin will be $1000.
However, keep in mind that, just as with Collateral Value, as the size of the position increases, the initial margin requirement may increase as well to adjust for risk.
Additionally, margin requirements may differ by market. For example, if the baseline Initial Margin Fraction (IMF) for a given market is 0.20, the initial margin requirement will be 20% of position size (ignoring large sizes), even when the max account leverage is 10x. To see the margin requirements for a given market, check the Margin tab on the trade page.
To see how much Margin a new position requires before submitting an order, you can see the Margin Required value when placing an order. To see how much margin an existing position is using, see the Initial Margin column in the Positions tab.
2) Maintenance Margin Rate (MMR) - this shows how far your account is from getting liquidated. Once MMR reaches 100%, your account will start getting liquidated.
MMR = Total Maintenance Margin / Net Equity
As a rule of thumb, the Maintenance Margin Fraction (MMF) starts at 5%. However, same as with Initial Margin, your Maintenance Margin requirements may increase depending on the size of your position and also may differ by market.
To see your Maintenance Margin (i.e. the total maintenance margin used across all of your positions), hover over your Maintenance Margin percentage in the Margin Overview section on the trade page.
Backpack’s margin model is centered around subaccounts.
Every subaccount is cross-margined, multi-currency, and has access to all products (spot, futures, spot-margin, borrow, lending). To illustrate the simplicity of this model, if you deposit USDC and BTC, your Net Equity increases and you can start trading all products right away without taking any extra steps. No need to move assets around wallets to start trading.
Moreover, subaccounts are completely segregated from one another. This means that any funds sitting in one subaccount are not exposed to another subaccount that might be getting liquidated. Balances and risk are completely isolated at the subaccount level, allowing you to run different strategies and determine how much in assets you want to put at risk.
If you prefer to trade with Isolated Margin, you can open a position in a different, isolated subaccount.
You can create up to a maximum of 10 subaccounts and seamlessly transfer funds between each other.
Max leverage on Backpack is set at the subaccount level.
You can choose how much risk you want to take on a given subaccount across all your positions by editing your Max Account Leverage in a given subaccount.
When you change your Max Leverage, the initial margin used by open positions and future orders will change as well.
Futures on Backpack settle in USDC. This includes fees, funding payments, and PnL.
If you have both USDC and non-USDC collateral (e.g. BTC), the system will use your USDC balance to cover these settlements.
When you have insufficient USDC but holds other collateral like BTC, the system automatically creates a USDC borrow to cover settlement payments instead of selling the collateral. For example, if the user needs to cover a 1 USDC fee to open a position, the system creates a 1 USDC borrow rather than liquidating any BTC.
In the case that the USDC lending market's utilization rate exceeds the throttle threshold or if you get liquidated while using Non-USDC assets as collateral, your collateral will get converted to cover the settlement payments. These conversions would appear on Reconciliation Conversions in the Settlements .
At Backpack Exchange, our commitment to providing a transparent and competitive fee structure is paramount.
The tables below outlines the Spot Trading & Perpetual Futures fee tiers for our Public Beta Launch, enabling traders to easily identify the fees associated with their trading volume.
We may change these fees for the next phase of launch and will post the updated fees here beforehand.
*SUBJECT TO CHANGE*
Mad Lads holders who connect their Backpack Wallet containing the NFT to Backpack Exchange will automatically qualify for VIP Tier 1 trading fees. The Mad Lads VIP program is in place for both Spot and Perpetual futures.
Maker Fee: A "maker" is someone who places a limit order that adds liquidity to the market. This means the order isn’t filled immediately but waits for a matching order (opposite buy or sell) to come along. The fee incurred for such orders is called the "maker fee". Makers typically pay a lower fee as they contribute to the market's liquidity.
Taker Fee: A "taker" is someone who places an order that matches immediately with an existing order on the order book. This takes liquidity away from the market. The fee for such orders is called the "taker fee". Takers typically pay a slightly higher fee due to the immediate nature of their trades.
The more you trade, the more you save! Our fee structure is designed to reward high-volume traders with reduced fees. As your 30-day trading volume increases, you ascend through our tier levels, and your applicable fees decrease. Both maker and taker fees decrease as you move to a higher tier, allowing for a more cost-effective trading experience.
Please refer to the table provided to view the fee structure across different tiers and the corresponding 30-day volume requirements. We aim to offer a seamless trading experience with a clear understanding of the associated costs.
Backpack offers a Spot Margin trading product that empowers you to go long or short on spot assets beyond current wallet balances. Behind the scenes this system leverages Backpack’s real-time liquidation engine and the transparent borrow & lending market to enable capital-efficient spot trades. All spot margin positions on Backpack tap into the same lending pools and are subject to the same margin requirements and liquidation processes that govern the broader borrow & lending framework.
This ensures that:
You can automatically borrow the assets you need to complete a spot trade.
Borrowers are always sufficiently collateralized, with the platform liquidating positions if necessary.
Before placing a margin trade, you need to ensure Margin Trading is enabled in the subaccount’s settings. With Auto Lend on, you can borrow via spot margin trades without needing to create manual loans—Backpack automatically borrows on your behalf whenever you trade beyond your spot balances.
Spot Margin allows you to buy or sell an asset in amounts exceeding your available balance, seamlessly creating a borrow for the shortfall (or withdrawing the borrowed asset if you want to transfer it off-exchange).
Enable Margin in your order form.
Place a Buy or Sell order for the desired asset in the spot market.
If you sell more than you hold (short selling) or buy more than your balance can cover, the system borrows on your behalf.
Example:
You have 1,000 USDC but want to buy 2,000 USDC worth of SOL.
By checking the “Margin” box, Backpack automatically borrows the extra 1,000 USDC and completes your spot purchase.
You now have a long SOL position financed by a partial borrow.
When you owe a certain asset due to a spot margin borrow, you can repay in the following ways:
Auto-Repayment with Auto Lend
If Auto Lend is enabled, any matching assets you acquire in your subaccount (via deposits, trades, or conversions) immediately go toward paying down your debt.
Spot Margin
Simply buy back the asset you owe. For instance, if you are short 10 SOL, placing a margin-enabled BUY for 10 SOL will automatically repay your SOL debt.
Manual Repayment
If Auto Lend is disabled, visit the Borrow tab (or the Borrow modal) and click Repay. Any assets you hold that match the borrowed asset can be used to repay.
Spot Margin on Backpack uses the same cross-margin system as the rest of the exchange, meaning:
Collateral is calculated from all assets in your subaccount, each with its own “haircut” (collateral weight).
Maintenance Margin is monitored in real time. If your margin fraction (collateral vs. open positions) dips below the required threshold, liquidation is triggered.
Initial Margin: The collateral you need to open a position.
Maintenance Margin: The collateral you need to keep that position open without liquidation.
Position Size: For spot margin, your short or overbought balances count toward your total exposure.
Your maximum position size depends on:
Collateral Haircuts (some assets count less toward collateral due to higher volatility)
Borrowing Pool Liquidity (there must be enough supply for you to borrow)
Available Equity in your subaccount
This means it’s not as straightforward as a simple “balance × max leverage” calculation.
Example
Suppose you have 100 USDC in your subaccount and the system allows 10× max leverage. Theoretically, you might assume you can buy $1,000 of SOL.
USDC is considered high-quality collateral (minimal haircut).
SOL may have a lower collateral weight (a “haircut”) due to higher volatility.
When you trade USDC for SOL, your collateral composition changes from “good collateral” to “riskier collateral.” As a result, the margin engine may limit your final position to, say, $800 of SOL, ensuring you retain enough stable collateral to cover potential volatility in SOL’s price.
Spot margin borrowing relies on the same borrow & lending framework as standard manual borrows. This means:
Utilization Rate = Total Borrowed / Total Lent.
Borrow Rate: Determined by the market’s Utilization Curve. Higher utilization means higher borrowing costs.
Lend Rate: Equal to Borrow Rate × Utilization. Lenders earn more yield as the pool’s utilization grows.
Because spot margin taps into the same pool, your borrow is subject to the hourly interest charges outlined in the borrow & lending doc. You can track real-time utilization and interest rates on the Lend page for each asset.
All subaccounts on Backpack are cross-margined. Margin is isolated per subaccount.
There is only one wallet to access all products (spot, futures, spot margin, borrow/lending).
Currently, markets are denominated and settled in USDC.
Lent assets can be used as collateral to open and maintain futures positions. Interest rates are determined by the public utilization rate curve of the Borrow Lend market.
PnL is continuously realized by default and counts toward net equity. Realized PnL earns or pays interest based on your borrow/lend exposure—surplus earns interest if Auto-Lend is enabled, while borrowed balances incur interest by default.
Liquidations first go through the orderbook, and upon hitting the auto-close margin, accounts are liquidated against Backstop Liquidity Providers.
We have fallback logic to calculate the Mark Price. The order of preference is:
Index price + 1 minute EWMA of (mid price - index price) delta. The mid price is the mean of the best bid and best offer.
Index price.
Median of the best bid, best offer and last traded price on Backpack.
Mid price (mean of best bid and best offer) on Backpack.
We will resort to using the fallback logic if we do not have the necessary data (e.g. it is stale).
Markets in post only state will use the index price as the mark price until the order book state changes to open.
For Index Price, we retrieve market price data from a set of exchanges.
For each exchange, we take the median of {best bid, best ask, last price} and use this as the market price.
We then calculate the median market price for the exchanges.
We apply a ceiling price of 100bps above the median and a floor price of 100bps below the median. If an exchange is outside of that, then they will be given the ceiling / floor price.
Each exchange is given a weighing that affects their weight. We use that weighting in a weighted mean average market price calculation for the set of exchanges.
Note: on Wednesday August 20 at 08:00 UTC, the funding rate intervals across all perpetual futures markets were changed to hourly.
Funding rate = Clamp[(mean_premium_index + Clamp(interest_rate – mean_premium_index, -0.05%, 0.05%)) / 8, Funding rate cap, Funding rate floor]
The funding rate is calculated as follows:
Every second we record the premium index
premium = (mark price − index price) / index price
Average premium index = moving-average of those per-second premiums over the funding interval.
Interest-rate add-on
These are applied to limit orders.
We calculate the median of {best bid, best offer, last price}. This is called the Active Price.
We then have a configurable Max Multiplier and Min Multiplier parameters.
If a limit order is submitted with a limit price that exceeds Active Price * Max Multiplier, then it is rejected. Conversely, if it has a limit price below Active Price * Min Multiplier, then it is rejected
These are applied to taker orders.
We have parameters Max Impact Multiplier and Min Impact Multiplier.
If we have a buy taker order, we will only allow it to to take up to the price level of best offer * Max Impact Multiplier. If the order is not fully filled at that point then we will expire the order and it will be partially filled. Converse logic applied for Min Impact Multiplier.
We calculate the 5 minute moving mean average for the mark price, mean mark price
We then have 2 parameters Max Multiplier and Min multiplier
If a taker order is submitted, then we will allow it to fill up until the price level of mean mark price * Max Multiplier . If the order is not fully filled at that point then we will expire the order and it will be partially filled. Converse logic applied for Min Multiplier . This is similar to the above price impact price bands.
We calculate the 5 minute moving average of the premium, mean premium
We then have a parameter tolerance pct
If, e.g. the tolerance percentage is 1% and the mean premium is 3%, then if a taker order is submitted, we will only allow it full up to a price level at which the current premium is 4%. If the order is not fully filled at that point then we will expire the order and it will be partially filled.
If, e.g. the tolerance percentage is 1% and the mean premium is -3%, then if a taker order is submitted, we will only allow it full up to a price level at which the current premium is -4%. If the order is not fully filled at that point then we will expire the order and it will be partially filled.
Notional size of current open positions and open orders that increase risk within a symbol
Total Exposure Notional
Total notional sum of open positions and orders that increase risk across all symbols
Base IMF
Position IMF without considering size
Position Initial Margin Fraction (IMF)
Initial margin requirement for a position adjusted for position size
Position Maintenance Margin Fraction (MMF)
Maintenance margin requirement adjusted for position size
Account IMF
Minimum margin fraction required to open new positions
Account MMF
Minimum margin fraction required to not get liquidated.
Net Equity
Total net equity value of the account.
Net Equity Locked
Total equity used to maintain open positions and orders that increase risk.
Net Equity Available
Equity available to open new positions.
Account Margin Fraction (MF)
How levered an account is given its current active positions and the mark prices of the coins.
Auto Close Margin Fraction
Margin fraction in which account is liquidated against BLPs.
Last traded price on Backpack.
interest_rate = 0.03 % × (funding_interval_hours / 24)
The funding rate floors and ceilings are set per market and can be found on the market specs page or fetched via API using the markets endpoint.
Funding payments are debited/credited at the end of the interval and are calculated as follows:
payment = funding rate × position quantity × mark price
Item
Description
Formula
Collateral Value
Notional value of collateral asset with haircut applied
Total Account Collateral
Total value of collateral assets with haircut applied
Unrealized PnL
Position Unrealized PnL
Net Exposure Quantity
Size in tokens of current open positions and open orders that increase risk within a symbol
Net Exposure Notional
Futures on Backpack settle in USDC. This includes fees, funding payments, and PnL.
If you have USDC in your account, then all USDC settlements will be debited from your USDC balance. However, in the case that you don't have USDC available in your account and therefore owe it to the system, Backpack considers the following options (in order):
Redeem any outstanding USDC lends
Borrow USDC from the borrow lending pool
Convert non-USDC collateral into USDC
This means that you can trade futures without having any USDC in your account.
PnL on Backpack is settled in real-time. Every 10 seconds, any unrealized profits or losses are realized without affecting your position size. This means your USDC balance is continuously credited or debited as your PnL fluctuates.
This real-time settlement model maximizes capital efficiency. For example, if you have a position with +$1,000 unrealized profit and want to physically use those assets (for spot, withdrawals, etc):
On traditional crypto exchanges, you would need to close your position to access that $1,000, or borrow against your increased equity.
With Backpack, that $1,000 profit is immediately credited to your USDC balance, allowing you to use it for spot trading, opening new positions, withdrawing from the exchange, or lending—all without reducing your original position.
To further enhance capital efficiency, if you enable Auto Lend, all profits are automatically lent into the USDC lending pool to earn yield while your position remains open. Importantly, these lent assets still count 100% towards your equity, meaning you can simultaneously earn yield while using those funds to maintain existing positions and open new positions.
The same process applies to losses. When your futures positions experience losses, your USDC balance is debited accordingly. This functions identically to traditional unrealized loss models in terms of liquidation risk—the only difference is in accounting. In both models, losses reduce your account equity, which affects your margin calculations and liquidation thresholds in exactly the same way. Whether your losses are "unrealized" on traditional platforms or "realized" through real-time settlement on Backpack, the risk management mechanics and liquidation parameters remain the same.
If you don't have sufficient USDC collateral and are using other assets (BTC, SOL, ETH, or USDT), the system will automatically create a USDC borrow to cover any losses rather than liquidating your non-USDC collateral.