Detailed Instructions

First, calmly check your liquidation health factor on the protocol's interface. This is the critical metric that determines how close you are to being liquidated. A health factor below 1.0 means your position is eligible for liquidation. For Aave or Compound, you can query this directly via their smart contracts.

• Sub-step 1: Query your health factor. Use a block explorer or the protocol's UI to find your position's current health. On Ethereum mainnet for Aave V3, you can call getUserAccountData on the 0x87870Bca3F3fD6335C3F4ce8392D69350B4fA4E2 pool contract.
• Sub-step 2: Identify the debt and collateral assets. Note which assets are borrowed and which are supplied as collateral. Determine the current market prices, as volatility is likely high.
• Sub-step 3: Calculate the required action. Determine how much collateral you need to add or debt you need to repay to raise your health factor to a safe threshold, typically above 1.5 for a buffer.

Tip: Use a dashboard like DeBank or Zapper to get a consolidated view of your health across multiple protocols quickly.

Detailed Instructions

The fastest way to improve your health factor is to deposit more collateral. This directly increases the value backing your loans. Use stable, liquid assets like ETH, wBTC, or stablecoins that the protocol accepts to minimize price slippage.

• Sub-step 1: Choose the optimal asset. Deposit the most capital-efficient collateral available (e.g., stETH on Aave has a high loan-to-value ratio). Ensure you have the asset in a connected wallet.
• Sub-step 2: Execute the deposit transaction. On the protocol's UI, navigate to the 'Supply' or 'Deposit' section for your chosen asset. Approve the token if it's your first time, then deposit.
• Sub-step 3: Verify the updated health factor. Immediately after the transaction confirms, refresh the interface and confirm your health factor has increased above the dangerous threshold (e.g., from 1.05 to 1.3).

Tip: If gas fees are high, consider using Layer 2 solutions like Arbitrum or Optimism where the protocol is deployed, as transactions are cheaper and faster.

Detailed Instructions

If adding collateral isn't feasible, strategically repay debt. Focus on repaying the debt of the most volatile borrowed asset or the one with the highest interest rate, as it compounds risk. This directly decreases the numerator in the health factor calculation.

• Sub-step 1: Decide which debt to repay. Check your borrowed assets. Repaying a stablecoin debt is predictable, while repaying a volatile asset like ETH can have a larger impact if its price is rising.
• Sub-step 2: Execute the repayment. On the protocol's dashboard, go to the 'Borrow' or 'Repay' section. You may need to ensure you have the exact token to repay. For example, to repay 100 USDT on Aave V3, you would call the repay function.

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// Example: Repaying 100 USDT on behalf of your own address on Aave V3
IERC20(0xdAC17F958D2ee523a2206206994597C13D831ec7).approve(0x87870Bca3F3fD6335C3F4ce8392D69350B4fA4E2, 100e6);
IPool(0x87870Bca3F3fD6335C3F4ce8392D69350B4fA4E2).repay(0xdAC17F958D2ee523a2206206994597C13D831ec7, 100e6, 2, yourAddress);

• Sub-step 3: Confirm the reduced debt and improved health. Verify the borrow balance has decreased and the health factor has risen accordingly.

Tip: Use a flash loan from a service like Aave's Flash Loan facility to repay debt and redeposit in one atomic transaction if you lack immediate funds, but this is an advanced maneuver.

Detailed Instructions

Once immediate danger has passed, conduct a full position restructuring. This may involve swapping debt types, adjusting collateral mix, or closing the position to prevent a recurrence. The goal is to achieve a sustainable health factor well above 1.5.

• Sub-step 1: Evaluate long-term viability. Ask if this leveraged position still aligns with your strategy. High volatility assets as collateral require a much larger safety buffer.
• Sub-step 2: Execute swaps or withdrawals. You might use a DeFi aggregator like 1inch to swap a portion of your collateral to repay debt in a single transaction, improving capital efficiency.
• Sub-step 3: Consider closing the position. If the market outlook is bearish, the safest option is to fully repay all debt and withdraw your collateral. This eliminates liquidation risk entirely.
• Sub-step 4: Set up monitoring alerts. Use a service like DeFi Saver, Tenderly, or Gelato to create automated alerts for when your health factor drops below a custom threshold (e.g., 1.7).

Tip: For complex restructuring, use "leveraged position management" tools offered by platforms like DeFi Saver, which can automate health factor rebalancing through smart contract recipes.

Detailed Instructions

First, immediately review your transaction history and position metrics on the protocol's interface or via a block explorer. Identify the primary trigger, which is often a rapid price drop in your collateral asset or a spike in borrowing costs. For DeFi positions, check the Health Factor (HF) or Collateral Ratio just before the event.

• Sub-step 1: Query your position data. Use a subgraph or the protocol's API to get historical health metrics. For Aave on Ethereum, you might query:

javascriptCopy
// Example GraphQL query for Aave V3 position health
query {
  userPositions(where: {user: "0xYourAddress"}) {
    healthFactor
    totalCollateralETH
    totalDebtETH
  }
}

• Sub-step 2: Correlate with market data. Check the price feed (e.g., Chainlink's ETH/USD at 0x5f4eC3Df9cbd43714FE2740f5E3616155c5b8419) for volatility at the time.
• Sub-step 3: Identify the leverage point. Calculate your effective leverage (Total Debt / Total Collateral) to see if it exceeded a safe threshold, often above 4x.

Tip: Use a dashboard like DeBank or Zapper to get a visual history of your position's health over time.

Detailed Instructions

Your priority is to rapidly improve your Health Factor (HF) above 1.5 or your collateral ratio above 150% to create a safety buffer. This can be done by adding more collateral or paying down debt. Given the stress of the event, adding high-quality, stable collateral like ETH, stETH, or USDC is often the fastest solution.

• Sub-step 1: Deposit additional collateral. On Compound, execute supply(asset, amount).

solidityCopy
// Example: Supplying 1 ETH to Compound V3
CErc20 cToken = CErc20(0x4Ddc2D193948926D02f9B1fE9e1daa0718270ED5); // cETH
cToken.supply{value: 1 ether}();

• Sub-step 2: Repay a portion of the debt. Focus on the debt with the highest borrow APR. On Aave, use repay(asset, amount, rateMode, onBehalfOf).
• Sub-step 3: Consider a partial withdrawal. If over-leveraged, closing a portion of the position (e.g., selling 20% of your leveraged asset) can instantly reduce risk.

Tip: Use a flash loan from Aave or dYdX to atomically repay debt and deposit new collateral in one transaction, saving on gas during volatility.

Detailed Instructions

Post-recovery, permanently lower your leverage ratio and diversify your collateral. Aim for a maximum leverage of 2-3x instead of 4-5x. Adjust the Loan-to-Value (LTV) ratio of your assets by choosing collateral with lower LTV caps (e.g., using wBTC at 70% LTV instead of a volatile altcoin at 50%).

• Sub-step 1: Rebalance collateral types. Move from a single volatile asset to a basket. For example, shift from 100% ETH collateral to 60% ETH, 30% wBTC, and 10% stablecoins.
• Sub-step 2: Adjust debt composition. Refinance variable rate debt to a stable rate if available, or use a stablecoin like DAI for borrowing to avoid interest rate spikes.
• Sub-step 3: Set new alert thresholds. Configure bots or use services like Gelato to monitor your HF, triggering an alert at 1.8, not 1.1.

Tip: Utilize money market protocols like Euler that allow for tiered risk modules, letting you isolate risky assets from your core collateral.

Detailed Instructions

Automation is key to resilience. Implement stop-loss mechanisms and liquidation protection bots that can act faster than you can manually. Use smart contract automation platforms like Gelato Network or Keep3r to create safety circuits.

• Sub-step 1: Deploy a safety script. Create a task that adds collateral if HF falls below 1.7. With Gelato, you'd create an execute function that calls supply() on your protocol.

solidityCopy
// Pseudo-code for a Gelato task to top up collateral
function checkHealthFactor() public view returns (bool) {
    return getUserHealthFactor(user) < 1.7 ether; // 1.7 in wei
}
function increaseCollateral() public {
    // Logic to supply 0.1 ETH from a designated wallet
}

• Sub-step 2: Use decentralized insurance. Purchase coverage for your specific position from protocols like Nexus Mutual (contract 0xCafea...) or Unslashed Finance.
• Sub-step 3: Establish a contingency fund. Keep 5-10% of your position value in stablecoins in a separate wallet, earmarked solely for emergency top-ups.

Tip: Consider using a DeFi Saver or Instadapp "MakerDAO Automation"-style vault that bundles these protections into a manageable interface.