🌪️Extreme Market Conditions: Dynamic Position Limit (DPL)

Due to liquidity constraints in the broader market, encompassing both CEX and DEX for a specific trading pair, it becomes challenging for market makers to hedge their positions. As a risk management strategy, the ability to open large positions may be restricted, especially when it's impractical for LPs to hedge such substantial positions.

DPL (Dynamic Position Limit) safeguards the capital of LPs and MMs during events akin to 'lunar collapses', where the market skews heavily short with extremely limited liquidity. If MYX were to permit users to open sizable short positions without any price impact, LPs could be exploited, potentially resulting in a total loss of their funds.