Margin Maintenance Requirement (MMR) is minimum collateral required to keep the leveraged position open.

This value can also be derived as the difference between the liquidation price and the price at which the margin in a leveraged position is worth zero.

MMR is typically set by the lending protocol or margin trading platform, and is used to ensure that there is sufficient collateral in the user’s margin account to cover any potential losses on the position.

For example, if a user has borrowed funds from a DeFi lending protocol and their collateral falls below the required MMR, the lending protocol may issue a margin call and request that the user add more collateral to their account. If the user is unable to add additional collateral, their position may be liquidated and they may be required to repay the loan in full.

Margin Maintenance Requirement is an important concept in the world of DeFi, as it is used to ensure that there is sufficient collateral in a user’s margin account to cover any potential losses on a leveraged trade or loan.

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