Learn how to use Automation to manage positions
Instadapp has automation features which you can use to supercharge your DeFi experience. Protection Automation is an automated unwind transactions that you can set to have automation pay down debt when a positions becomes risky.
You can find Protection Automation in the Strategy tab. Protection Automation is only available for AAVE v.3 on the Polygon and Avalanche Networks.
You can find a complete view of your automation history in the Automation page found under Utilities. For more information on the Automation page see: Automation History
Protection Automation is currently available for AAVE v3 and uses Health Ratio to set the parameter. Protection Automation works by using two variables a Triggering Health Factor and a Target Health Factor.
Automation requires a minimum value of collateral assets. This minimum is only required when activating Protection Automation.
- Mainnet: a minimum of $15,000 USD worth of collateral to activate Automation
- Polygon: a minimum of $1000 USD worth of collateral to activate Automation
- Avalanche: a minimum of $5000 USD worth of collateral to activate Automation
For automations on Mainnet you will also pay the gas required to execute the automation. This fee will be paid through the collateral in the position.
This value represents when the automation should occur. You can see your current risk factor and enter a value that is lower than your current health factor. Whenever the position's health factor falls below the triggering health factor protection automation will submit a transaction to SAVE the position.
The target Health Factor determines how much the automation will pay back. You can set the desired Health Factor and automations will pay back your position to this level. Once you are done click Automate to begin Protection Automation.
The highest number for target Health Factor is 1000 i.e no debt in the position
Want to close the position using automation? Set the Target Health Factor to 1000 if you would like Protection Automation to pay back all the debt when triggered.
Once the Automation transaction confirms you'll find Protection Automation ACTIVE
You can find all transactions and operations related to Automation in Utilities under Automation
This image is in production final design may change
Let's review an example of how the Triggering H.F and Target H.F work together in setting up automation. Let's use a sample position which has a current Heath Factor of 2.5. We will set the Trigger Health Ratio to 2.0 and Target Health Factor to 3.0.
We can visually represent our position and values on a line graph like so:
Our initial position in the example
Automation pays enough debt to bring the position to the Target Health Factor
Protection Automation is limited to network conditions, please note that difficult market conditions and other unforeseen factors can cause losses. Please use at your own risk!
You should continue to monitor your positions even if you set automation. If there are any issues or bugs please report them to the team.
Protection Automation will remain active until it is turned off. You can turn automation off in the Automation panel using the Cancel button. During a market downturn the automation may run multiple times each time returning the position to the target health ratio.
At this time you cannot specify which asset is used to payback by automation. Once protection automation is set it will use any available collateral in the position during automation to payback debt.
Automation Protection requires authority to your DSA to function. This authority is added when you active automation and removed when you cancel it. You can at any time remove this authority from the Authority panel doing this will also cancel automation.
There is a 0.3% - 0.4% fee per automation event. For Mainnet only: You also pay the gas fee for the automation.
Instadapp Product blog Automation Protection