Aave V3 Liquidation Monitor: Watch Your Borrow Positions Before the Bots Do

TL;DR

Aave V3 liquidation monitors your borrow positions on Ethereum, Polygon, Arbitrum, Optimism, and Avalanche. It calculates your real-time health factor from on-chain data and fires alerts — to your terminal, Discord, or webhook — before the health factor hits the liquidation threshold.

The 10-Second Pitch

• Multi-chain monitoring — Ethereum mainnet, Polygon, Arbitrum, Optimism, Avalanche, Base
• Real-time health factor calculation — queries Aave V3 subgraph or on-chain oracle prices
• Configurable thresholds — alert at HF < 2.0 (safe), HF < 1.5 (warning), HF < 1.2 (danger)
• Alert destinations — terminal stdout, Discord webhook, Telegram bot, Slack, custom webhook
• Supports multiple addresses — monitor an entire wallet or a list of addresses from a file

Setup in 3 Steps

1. Install and configure:

npm install -g @aave/liquidation-monitor
aave-monitor config --address 0xYourWallet --chains ethereum,polygon,arbitrum

2. Set alert thresholds:

addresses:
  - 0xYourWallet
alerts:
  - channel: discord
    webhook: https://discord.com/api/webhooks/your-webhook
    threshold_health_factor: 1.5
polling_interval_seconds: 30

3. Run the monitor:

aave-monitor start

How Liquidation Works on Aave V3

When you borrow assets on Aave, the protocol assigns you a Health Factor (HF):

HF = (Total Collateral x Liquidation Threshold) / Total Borrowed Value

• HF > 1.0: you are safe
• HF = 1.0: your position can be liquidated
• HF < 1.0: bots will liquidate you imminently

When HF < 1.0, anyone can call liquidate() on the Aave V3 pool contract. The liquidator buys your collateral at a 5-10% discount. The liquidation bot ecosystem is competitive — bots monitor the mempool 24/7.

This skill helps you stay ahead of the bots.

Pros / Cons

Verdict

If you have borrow positions open on Aave V3, you need this. The cost of a liquidation bot winning your position is real and irreversible. A 30-second polling interval with a Discord alert gives most traders enough time to act.