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🛡️ Protection Strategies: Stay Safe

Discover overcollateralization, alerts, and repayment tactics

🛡️ Liquidation Protection Strategies

The best defense against liquidation is proactive risk management. Let's explore proven strategies to protect your positions.

🎮 Interactive: Strategy Comparison

Explore different approaches to liquidation protection:

🛡️

Conservative Positioning

Maintain low LTV ratios and high health factors for maximum safety

Effectiveness
Very High
Key Tactics
  • Keep LTV below 40% (HF {">"}2.0)
  • Only borrow with stable assets as collateral
  • Leave 50%+ buffer room
  • Use stablecoin pairs when possible
✓ Pros
  • Maximum safety margin
  • Can survive extreme volatility
  • Peace of mind
✗ Cons
  • Lower capital efficiency
  • Less leverage
  • Opportunity cost

Emergency Response Plan

1️⃣

When HF Drops Below 1.5

This is your warning zone. Take immediate preventive action before liquidation becomes imminent.

Actions
  • • Add more collateral (fastest option)
  • • Repay part of your debt
  • • Reduce exposure in other positions
  • • Set up automation if not already done
2️⃣

When HF Drops Below 1.2

Critical zone. You have very little time before liquidation. Act within minutes, not hours.

Urgent Actions
  • • Immediately add collateral (priority #1)
  • • Use fast transactions (high gas if needed)
  • • Close position entirely if necessary
  • • Don't wait—bots are already watching
3️⃣

When HF Drops Below 1.0

Liquidation in progress or imminent. Your options are extremely limited.

Last Resort
  • • Self-liquidate if possible (save penalty)
  • • Front-run liquidators with higher gas
  • • Accept the loss and learn from it
  • • Most likely too late at this point

Tools & Resources

🔔

Monitoring Tools

  • DeFi Saver: Automated position management
  • Instadapp: Smart automation recipes
  • Zapper/Zerion: Portfolio tracking
  • Protocol dashboards: Native monitoring
📊

Analytics Platforms

  • DeFi Llama: Protocol TVL & metrics
  • Dune Analytics: Custom dashboards
  • DeFiPulse: Market data
  • CoinGecko: Price alerts
💡

Golden Rules

  • 1.Never max out LTV: Leave at least 30-40% buffer
  • 2.Set alerts early: Get warned at HF 1.8, not 1.1
  • 3.Keep emergency funds: Have assets ready to add quickly
  • 4.Understand your assets: Know liquidation thresholds before borrowing
  • 5.Test with small amounts: Practice before scaling up