Overview
The active open interest on any live market affects the initial IMF that traders can use. Generally, as open interest increases, the amount of initial leverage that traders can use decreases. The maintenance margin fraction, which determines when traders get liquidated, does not update based on open interest and is solely determined by governance.
Formulas
The IMF of a perpetual market scales linearly according to the current open_notional in the market, starting at open_notional_lower_cap to open_notional_upper_cap (USDC denominated):
open_notional = open_interest * oracle_price
scaling_factor = (open_notional - open_notional_lower_cap) / (open_notional_upper_cap - open_notional_lower_cap)
IMF_increase = scaling_factor * (1 - base_IMF)
effective_IMF = Min(base_IMF + Max(IMF_increase, 0), 100%)
Open notional lower and upper caps are tied to a market's liquidity tier. To view the current liquidity tiers on the protocol, see here.
What is the current IMF of a market I would like to trade?
The current IMF is shown on the UI. Simply head to the details section of any market's trade page and view the Initial Margin Fraction.
How do OIMF changes affect my open position?
If you have an open position that has leverage exceeding a market's OIMF limits, then you will only be able to place trades that will reduce your existing leverage, until you satisfy the market's current IMF.