Liquidation Risk Monitor

Monitor DeFi lending positions for liquidation risk. Get alerts before your collateral is liquidated on Aave v3, Compound v3, and other lending protocols.

What is a Liquidation Monitor?

A Liquidation Monitor tracks your lending positions and calculates the health factor. When the health factor drops below a safe threshold, you receive an alert to add collateral or repay debt.

Supported Protocols

Aave v3: Ethereum, Polygon, Arbitrum, Optimism
Compound v3: Ethereum, Polygon, Arbitrum
Maker DAO: Ethereum (Vaults/CDPs)

Understanding Health Factor

Health Factor is calculated as:

Health Factor = (Collateral Value × Liquidation Threshold) / Borrowed Value

Example:
Collateral: 10 ETH × $2,000 = $20,000
Liquidation Threshold: 80%
Borrowed: $10,000 USDC

Health Factor = ($20,000 × 0.80) / $10,000 = 1.6

Health Factor Ranges

Health Factor	Status	Action
> 2.0	✅ Safe	No action needed
1.5 - 2.0	⚠️ Caution	Monitor closely
1.2 - 1.5	🟠 Warning	Add collateral soon
1.05 - 1.2	🔴 Danger	Urgent action required
< 1.0	💥 Liquidation	Position liquidated

Configuration

{
  "type": "liquidation",
  "name": "My Aave Position",
  "chain": "ethereum",
  "protocol": "aave-v3",
  "walletAddress": "0x1234...5678",
  "healthFactorThreshold": 1.5,
  "alertLevels": [2.0, 1.5, 1.2, 1.05],
  "interval": 300000
}

Alert Examples

Health Factor Warning

⚠️ Liquidation Risk Warning

Protocol: Aave v3 (Ethereum)
Position: 0x1234...5678

Health Factor: 1.42 (was 1.68)
Status: Warning - Add collateral

Collateral: 10.5 ETH ($21,000)
Borrowed: $12,500 USDC
Liquidation Price: $1,190 per ETH

Actions:
1. Add 2 ETH collateral
2. Repay $2,500 USDC
3. Wait for price recovery

[View Position] [Add Collateral]

Critical Alert

🚨 CRITICAL: Liquidation Imminent

Health Factor: 1.08
Liquidation in: ~$95 price drop

URGENT: Add collateral or repay debt NOW

[Emergency Actions]

Use Cases

1. Prevent Personal Liquidations

Monitor: Personal Aave Position
Threshold: 1.5
Alert: Email + Telegram
Action: Manual intervention

2. Automated Collateral Management

Monitor: Trading Bot Position
Threshold: 1.3
Webhook: https://bot.example.com/add-collateral
Action: Automated collateral addition

3. Portfolio Risk Management

Monitor: Multiple positions
Alert Levels: 2.0, 1.5, 1.2
Dashboard: Track all positions
Action: Portfolio rebalancing

Best Practices

1. Set Multiple Alert Levels

Level 1 (HF 2.0): Information - Monitor
Level 2 (HF 1.5): Warning - Plan action
Level 3 (HF 1.2): Critical - Act now
Level 4 (HF 1.05): Emergency - Immediate action

2. Check Every 5-15 Minutes

Crypto prices are volatile:

5 minutes: High-risk positions
10 minutes: Medium-risk positions
15 minutes: Conservative positions

3. Maintain Buffer

Don't wait until HF = 1.0:

Alert at HF 1.5, not 1.1
Account for gas fees
Allow time to react

4. Have Emergency Plan

Pre-approve token spending
Keep collateral tokens liquid
Set up flash loan backup

Troubleshooting

Health Factor Shows 0 or ∞

Causes:

No borrowed amount (HF = ∞)
Position doesn't exist
RPC node error

Alerts Not Triggering

Solutions:

Verify wallet address is correct
Check protocol and chain match
Ensure position exists on selected protocol