Risk Monitoring Service (RMS)

Overview

The Risk Monitoring Service continuously evaluates lending, AMM, and DeFi positions across multiple protocols for risk conditions. RMS supports:

• Blend Capital — Lending pool positions (SUPPLY, BORROW)
• Aquarius AMM — Liquidity pool positions (LP)
• SoroSwap — Factory-created pair positions (LP)
• Phoenix DeFi Hub — Staking and LP positions (STAKE, LP)
• FxDAO — Collateral debt positions (COLLATERAL, BORROW)
• Untangled Vaults — ERC-4626 vault positions (SUPPLY)

When a position crosses configured thresholds, RMS triggers notifications and can provide transaction proposals for risk mitigation.

Risk Levels

Level	Health Factor	Severity	Action
healthy	≥ 1.50	LOW	HOLD — No action needed
warn	1.25 – 1.50	MEDIUM	WATCH — Monitor closely
alert	1.10 – 1.25	HIGH	REPAY — Consider repaying debt
emergency	< 1.10	CRITICAL	LIQUIDATE — Position at risk

Risk Triggers

Health Factor Triggers

• low_health_factor — Health factor has dropped below the configured threshold

Oracle Triggers

• oracle_stale — Price oracle data is outdated (configurable age threshold)
• oracle_price_manipulation — Detected potential price manipulation
• oracle_feed_divergence — Price feeds are providing inconsistent data
• oracle_address_changed — Oracle address has changed unexpectedly

Pool Triggers

• pool_utilization_high — Pool utilization exceeds safe limits (>80%)
• pool_freeze — Pool operations have been paused by admin

Collateral Triggers

• collateral_depeg — Collateral asset losing peg stability
• collateral_liquidity_low — Insufficient liquidity for liquidation
• collateral_oracle_sanity_fail — Collateral price failed sanity checks

Advanced Triggers

• borrow_apr_spike — Borrow rate increased significantly (>50% change)
• twap_deviation_exceeded — TWAP has deviated beyond safe limits
• vwap_manipulation — VWAP suggests potential manipulation
• single_trade_impact — Single large trade had outsized price impact

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Configuration

Default Thresholds

Parameter	Default	Description
Health Factor Warn	1.50	Alert when HF drops below this
Health Factor Alert	1.25	Action recommended below this
Health Factor Emergency	1.10	Immediate action below this
Oracle Max Age	300s	Max age before oracle marked stale
Utilization Warn	80%	High utilization warning threshold
Utilization Alert	90%	High utilization critical threshold

User Configuration

Users can customize their risk thresholds per wallet:

{
  "walletAddress": "GABC...XYZ",
  "thresholds": {
    "hfWarnOverride": 1.60,
    "hfAlertOverride": 1.30,
    "hfEmergencyOverride": 1.15,
    "oracleWarnAge": 180,
    "utilWarnBps": 7500,
    "utilAlertBps": 8500
  }
}

---

API Endpoints

Get Risk Configuration

GET /api/v1/rms/config/:walletAddress

Response:

{
  "success": true,
  "config": {
    "walletAddress": "GABC...XYZ",
    "thresholds": {
      "hfWarnOverride": 1.50,
      "hfAlertOverride": 1.25,
      "hfEmergencyOverride": 1.10
    },
    "createdAt": "2026-01-15T10:00:00.000Z",
    "updatedAt": "2026-04-01T08:30:00.000Z"
  }
}

Update Risk Configuration

POST /api/v1/rms/config/:walletAddress
Content-Type: application/json

Request Body:

{
  "thresholds": {
    "hfWarnOverride": 1.60,
    "hfAlertOverride": 1.35,
    "oracleWarnAge": 200
  }
}

Get Risk Evaluation

GET /api/v1/rms/risk/:walletAddress

Response:

{
  "success": true,
  "portfolioRisk": {
    "portfolioAddress": "GABC...XYZ",
    "overallRiskLevel": "warn",
    "positions": [
      {
        "positionId": "pos_001",
        "protocolId": "blend",
        "positionType": "supply",
        "healthFactor": 1.35,
        "collateralValueUsd": 10000.00,
        "liabilityValueUsd": 7407.41,
        "riskLevel": "alert",
        "riskTriggers": ["low_health_factor"],
        "liquidationBuffer": 2592.59,
        "estimatedLossIfLiquidated": 481.48,
        "evaluatedAt": "2026-04-13T12:00:00.000Z"
      }
    ],
    "evaluatedAt": "2026-04-13T12:00:00.000Z"
  }
}

List Active Alerts

GET /api/v1/rms/alerts

Query Parameters:

• wallet — Filter by wallet address
• level — Filter by risk level (healthy, warn, alert, emergency)
• limit — Max results (default: 50)

Trigger Alert Evaluation (Admin)

POST /api/v1/rms/trigger
x-admin-key: <RMS_ADMIN_API_KEY>
Content-Type: application/json

{
  "walletAddress": "GABC...XYZ"
}

---

Health Factor Calculation

Health Factor is calculated as:

Health Factor = (Collateral Value × Collateral Factor) / Liability Value

Example

Asset	Value (USD)	Factor
USDC Collateral	$10,000	0.90
USDC Debt	$5,000	—

Health Factor = (10000 × 0.90) / 5000 = 1.80

Liquidation Threshold

A position enters liquidation when:

Health Factor < 1.10

At this point, liquidators can repay the debt and claim collateral at a bonus.

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Real-Time Monitoring

RMS runs a continuous evaluation loop across all supported protocols:

Interval	Task
60 seconds	Fetch positions from all protocols for tracked wallets
60 seconds	Evaluate each position against thresholds
On change	Trigger notifications if risk level changed
15 minutes	Cooldown between repeated alerts

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Integration with TxB

When a risk alert is triggered, RMS can coordinate with the Transaction Builder to propose exit strategies:

1. REPAY — Build a repay transaction to improve health factor
2. LIQUIDATE — For liquidators: build a liquidation transaction
3. UNWIND — Build a complete position close transaction

See Transaction Builder for details on building transactions.