Please clarify what option 2 does.
A lot of users on discord (and some in this forum) have pointed out that penalizing the safest positions the most seems unfair.
Does option 2 sort users by margin size, or by margin ratio?
If margin size then it doesn’t seem like any of the options address the problem of haircutting the free collateral users. E.g. a user with 0.5x leverage that can’t be liquidated at 1.0x leverage, who could have simply withdrawn collateral without ever making a trade, but now takes an extra haircut.