BTC Subsidy Plan by Backpack After Oct 11 Flash Crash Expands to Basis-Trade, Offering 100% Subsidies for Low-Leverage Accounts and ADL Liquidations
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Backpack unveiled a cash subsidy plan in response to the October 11 market flash crash, targeting Basis trade strategies that rely on Spot-Futures arbitrage. The program aims to bolster market liquidity and mitigate risk for participants amid elevated volatility.
Under the framework, accounts with leverage below 5x receive a 100% subsidy on eligible losses, while those with >5x leverage obtain a partial subsidy, sized by the degree of leverage and current market conditions.
In cases where BTC borrowing positions were liquidated passively via ADL (auto-deleverage), investors will receive a 100% subsidy; funds deposited before settlement are fully distributed; and all liquidation fees are eligible for a 50% rebate.