Correctly dealing with parties not meeting margin requirement is derivatives exchange 101. Closing long is not a great design choice. If a party cannot be closed-out immediately because of insufficient volume there are three reasonable design choices: 1/n

dYdX *could* socialise losses among profitable traders without "deleveraging" (closing positions) though — this is what @vegaprotocol does. It is one thing to take a haircut on your gains, quite another to become exposed because the system closed your hedge.