Open DeFi Notification Protocol Makes Mobile Alerts a Liquidation Saver

Decentralized finance inhabits a sphere that is largely cloistered from that of the mainstream world. It entails proprietary networks, wallets, and communities that rarely intersect with the wheels of web2. This arrangement has served DeFi fine for the most part, but there are times when greater connectivity between web2 and 3 – the old world and the new – is desirable.

One such scenario concerns crypto lending. The beauty of decentralized finance is that it enables anyone to use their crypto as collateral to obtain a loan. Lock your digital assets into a protocol such as Aave or Compound and you can borrow 50% of its dollar value in a matter of minutes. There’s a caveat though: if the value of your collateral drops below a certain threshold, you will be liquidated and your crypto sold off at a discount to repay the debt.

 

It’s Great When You’re Unliquidated

The solution to the liquidation risk is to keep tabs on your borrowing positions to ensure you never reach that critical liquidation threshold, repaying a portion of the loan if necessary to prevent this occurrence. Crypto moves fast, however, and keeping tabs on what’s happening on-chain while living in the real world isn’t easy. Even those who live and breathe crypto still have to sleep, and no one wants to be setting alarms in the middle of the night to check their borrowing health score.

Open DeFi Notification Protocol has been chipping away at this problem for a while now, and its solution to the liquidation problem is starting to bear fruit. The answer? Mobile push notifications. It sounds simple, and yet delivering on-chain data to non-blockchain devices calls for clean code and a focus on UX. Otherwise, things can quickly get messy.

 

Health Check-as-a-Service

Developed by DeFi.org, Open DeFi Notification Protocol is a long name for a punchy service. It enables crypto borrowers to determine their health score at a glance i.e. how close they are to being liquidated. This prevents the need for borrowers to bust out the laptop, log in to MetaMask, and connect to Aave every time the market moves. Ain’t no one got time for that.

On-chain alerts aren’t exclusive to DeFi.org, it should be noted; a number of crypto projects provide Telegram bots that can alert users of similar events. These include EtherDrops and UniWhales, with the latter’s free tx notification service proving particularly popular. What makes Open DeFi Notification Protocol different is that it delivers its alerts as regular mobile push notifications, ensuring that crypto users don’t miss a thing. That and the fact that its alerts are specifically tailored around borrowing health.

So far, its greatest success has been with Alpaca Finance, whose leveraged yield farming requires regular monitoring. Unlike other yield farms, which can be operated on a “set and forget” basis (unless you’re in the high volatility Pool 2), Alpaca requires its users to monitor their health factor to prevent liquidations. To make this process easier, Alpaca has now integrated the Notification Protocol, giving humble farmers 24/7 alerts any time their position nears a critical level. Expect to see many more DeFi protocols adding this feature in the near future. If mobile banking apps can alert you any time you risk going overdrawn, after all, why not DeFi?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice

Source: https://cryptodaily.co.uk/2022/07/open-defi-notification-protocol-makes-mobile-alerts-a-liquidation-saver