You need to deposit your funds into the DMEX smart contract before trading, so the contract can reserve the necessary margin. This is crucial because, without it, anyone could move their funds upon seeing a loss on their position, thereby avoiding covering the loss.
When you open a position on DMEX, the selected margin is reserved in your account and is released when you exit the position.
Keeping funds in the DMEX contract is as safe as keeping them in your personal wallet. Only the owner of the private keys can access their funds in the DMEX smart contract.