Application

Protection Agent

Protection Agent monitors your DeFi positions and alerts you via Telegram before liquidation - modeling the probability of liquidation from collateral volatility, not just the health factor.

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Key Takeaways

  • Protection Agent monitors DeFi lending positions on Aave V3 and sends Telegram alerts before liquidation - based on liquidation probability from collateral volatility, not just the health factor snapshot.
  • Any public wallet address can be checked without connecting a wallet; enter an address, select a protocol, and get a live health factor and liquidation probability result.
  • A health factor below 1.0 means the position is already liquidatable; 1.0-1.2 is Critical; 1.2-1.35 is Danger.
  • Probability matters more than the ratio: a health factor of 1.4 backed by a volatile meme coin may be riskier than 1.3 backed by ETH.
  • Up to 9 monitored subscriptions per page; Compound V3 and Morpho support are coming soon.

Protection Agent is a liquidation risk monitoring tool at /protection-agent. It watches DeFi lending positions across supported protocols and sends Telegram alerts when a position approaches liquidation - before it's too late to act.

The tool goes beyond the health factor: it models the probability of liquidation from collateral volatility, giving you a more actionable risk signal than a raw ratio alone.

Supported protocols

Protocol Status
Aave V3 Active
Compound V3 Coming soon
Morpho Coming soon
SmartCredit Coming soon

Check any wallet - no connection needed

The wallet lookup on the main page lets you check the liquidation risk of any public wallet address without connecting your own wallet. Enter an address, select a protocol, and click Check risk.

The result shows:

  • Health factor - the ratio of collateral value to borrowed value. Below 1.0, the position is liquidatable.
  • Liquidation probability - modeled from collateral volatility; a position with a health factor of 1.4 backed by volatile assets may be riskier than one at 1.3 backed by stable collateral.
  • Collateral and debt - current values in USD.
  • Shareable report - a live risk link you can send to anyone.

From the result, you can click Monitor to add the wallet to your active subscriptions.

Setting up monitoring

To receive alerts, complete the four-step setup:

  1. Connect Wallet - sign in with your wallet to access the monitoring dashboard.
  2. Connect Telegram - link the SmartCredit Telegram bot. Alerts are delivered here; the connection is required before alerts can fire.
  3. Add position - click + Add Position (or Monitor from a lookup result). In the dialog:
  4. Select a protocol (Aave V3)
  5. Enter the wallet address to monitor - you can monitor any wallet, not only your own
  6. Enable the Telegram notification channel
  7. Get alerts - the agent monitors the position continuously. When risk exceeds the alert threshold, you receive a Telegram message.

You can add up to 9 subscriptions per page (pagination is available for larger sets).

Health factor risk tiers

Each subscription card shows the current health factor with a risk tier:

Health factor Tier Meaning
< 1.0 Liquidatable Position is already eligible for liquidation
1.0 – 1.2 Critical Liquidation imminent; act immediately
1.2 – 1.35 Danger High liquidation risk; consider adding collateral or repaying
1.35 – 1.5 Warning Elevated risk; monitor closely
1.5 – 2.0 Watch Moderate risk; safe under normal conditions
≥ 2.0 Safe Low liquidation risk

Managing subscriptions

Each subscription card shows the wallet address, protocol, last alert time, and current health factor. From the card you can:

  • Pause - temporarily stop monitoring without deleting the subscription. Resume at any time.
  • Edit - update the notification channel settings.
  • Remove - permanently delete the subscription.

Why probability matters more than the health factor

The health factor is a snapshot. A position at 1.4 backed by a volatile token like a meme coin may liquidate faster during a market move than a position at 1.3 backed by ETH. Protection Agent models liquidation probability from collateral volatility, so the alert you receive reflects actual risk - not just the current ratio.

FAQ

What is a liquidation in Aave V3?

In Aave V3, a liquidation occurs when the value of a borrower's collateral drops below the liquidation threshold relative to the borrowed amount, making the health factor fall below 1.0. At that point, a third-party liquidator can repay part of the debt and claim the collateral at a discount (the liquidation penalty), which the borrower loses.

What health factor triggers liquidation on Aave?

A health factor below 1.0 means the position is immediately eligible for liquidation. Aave V3 defines the liquidation threshold per asset - typically between 75% and 85% LTV depending on the collateral. Protection Agent flags positions as Critical at health factor 1.0-1.2 and as Danger at 1.2-1.35 to give time to act before reaching 1.0.

How does SmartCredit.io Protection Agent prevent liquidation?

Protection Agent continuously monitors the health factor and liquidation probability of registered wallet addresses on Aave V3. When risk exceeds the alert threshold, it sends a Telegram message in time for the user to add collateral or repay part of the loan - restoring the health factor before liquidation occurs.

Why does liquidation probability matter more than just the health factor?

The health factor is a static snapshot. A position at health factor 1.4 backed by a highly volatile asset like a meme coin may reach health factor 1.0 faster than a position at 1.3 backed by ETH. Protection Agent models the probability of reaching the liquidation threshold based on historical collateral volatility, producing a more actionable risk signal.

Can I monitor someone else's wallet with Protection Agent?

Yes. Protection Agent can monitor any public wallet address, not only wallets you own. This is useful for watching positions of protocols, DAOs, or addresses you have a stake in. Monitoring any address requires connecting your own wallet to manage the subscription settings.

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