Solana
Jupiter Perps
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The auto-cut
The auto-cut is the rule that keeps a funded seat from losing more than its lines allow. It is the reason the pool can fund strangers.
The two lines
| Line | Size | Measured from |
|---|---|---|
| Daily | 5% | The seat's exit value at the start of the day |
| Total | 10% | The seat's starting balance |
When either line is touched, the seat is closed: positions are closed on Jupiter Perps and the seat stops trading.
Exit value
A position's paper value is the mark price times the size. Its exit value is what you would actually get if you closed it now, after the price impact and fees of closing. PROPFUN grades and cuts on exit value, because that is the money the pool would really get back.
A worked example
This is the example on the landing page.
| Step | Number |
|---|---|
| Seat balance | $10,000 |
| Position | $20,000 long SOL |
| Cost of closing, demo assumption | 0.1% of the position, $20 |
| Daily line | 5% of $10,000 = $500 |
| SOL move that touches the line | about -2.4% (a $480 paper loss plus $20 to close) |
| Seat after the cut | $9,500 |
| Pool loss | $500 |
If SOL keeps falling to -6%, the seat without a cut would be at $8,780. With the cut it stays at $9,500, because the position is already gone.
What the cut does not promise
A very fast move can carry the price past the line between two checks. The cut closes at the first exit value it sees past the line, which can be slightly worse than exactly 5%. The pool sizes seats with that gap in mind.