Collateral Management Best Practices

Keeping a healthy Health Factor (HF) and avoiding surprise liquidations is simpler than it sounds.

Use the tips below any time you open a borrowing account or change an existing one.

#	Tip	Why It Helps	How to Do It (Step-by-Step)
1	Separate Goals into Separate Accounts	If one idea goes wrong it won’t drag the rest down.	• Click “Open borrowing account” for each strategy (e.g., Long LUNC, Short LUNC, Stable-farm).• Name them clearly so you know which is which.
2	Mix Your Collateral	Different tokens don’t fall (or rise) at the same time. A mixed “basket” keeps your HF steadier.	• Press “Add / Transfer collateral.”• Add a stablecoin (e.g., $USDC) next to a volatile coin (e.g., $LUNC).• Keep at least 30 % of the basket in a stable asset.
3	Watch the Traffic-Light Gauge	The coloured bar in Borrowing tells you when you’re safe (green), borderline (yellow) or risky (red).	• Aim to stay green (HF > 1.8).• If it turns yellow (≈ 1.4) add collateral or repay a little.• Never let it hit red (≤ 1.2).
4	Keep a “Fee Wallet” Topped-Up	Interest and small service fees come from your Stable Balance—if it’s empty, borrowing can pause or liquidate.	• In Portfolio → Stable Balance click “Deposit”.• Add enough $USDC to cover 7 days of projected interest (shown right under the deposit box).
5	Set Free Alerts	A message on Telegram / email is faster than checking charts all day.	• Go to Settings → Alerts.• Turn on Health Factor < 1.4and Price drop > 10 %.• Enter your email or Telegram handle.
6	Plan for Bad Days	Ask yourself: “If my coins drop 40 %, can I still sleep?”	• Before clicking “Borrow” move the slider to see HF after a –40 % shock (displayed above the slider).• If HF would be < 1.0, borrow less.
7	Review Weekly	Markets change; a 5-minute check-in avoids drama later.	• Every weekend: open Borrowing page.• Check each account’s HF and Stable Balance.• Top up or repay as needed—finished.

Remember: liquidations only happen if you let Health Factor fall below 1.0 and leave it there.

A little routine—separate accounts, mixed collateral, quick top-ups—keeps you in the green and stress-free.

Health-Factor Guardrails:

• 1.8 safe, 1.4 watch, < 1.2 add collateral or repay.

• Enable Telegram / e-mail alerts in Settings.

Stable Balance Buffer:

Hold ≥ 7 days of projected interest; prevents forced liquidation for unpaid interest.

Oracle Volatility Windows: Major news events? Raise HF before prints to avoid sudden TWAP dips.