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New Feature: Account Health Simulation

New Feature: Account Health Simulation

Euler Finance’s frontend has had a significant improvement to the health monitor! Thanks to the hard work of contributors, users can clearly understand the risk of other events while having no effect on a position. Given that this is a simulation (and has no effect on the user’s existing position), this will assist a significant refinement in risk management.

Thanks to this boost to the Health Monitor, Users can now have a much clearer idea of what conditions might be met in order for their accounts to be flagged for liquidation. In addition, projected earnings changes are still clearly visible to enable a risk / return analysis.

Euler’s health monitor

As it stands, users enjoy a health monitor that is linked to an existing position in the protocol. Be it their own or another's (using the account spy), getting information about their positions is straightforward and easy to understand. Key metrics like time to liquidation, health score, collateral and liabilities (as well as their risk adjusted values) have been front and centre of any user’s dashboard.

This has made fitting their risk profiles to their activities on the protocol straightforward. In continuing with this spirit, users will now be able to simulate the health of their account with just a few clicks.

New feature: Account Health Simulation

This new feature can be easily accessed by clicking on the “Simulate Account Health” button. Users will be met with a screen that overviews all of their assets and liabilities presented alongside sliders that can be modified alongside text boxes for more accurate and exact asset adjustments.

These sliders can change both the value of the assets and the cost of borrowing the asset in APY terms. By changing these two variables, users will see an estimate of the standing of their new position at the bottom of the dashboard.

In addition, this health simulator can be used in conjuction with batch transations. Users can batch multiple activities to set up a position they have in mind, and then use the tool to double check how that position is exposed to market movements. After that users can execute, modify further or cancel the transaction without paying any gas or changing any on-chain position.  

Remember: this is a simulation (and is separate entirely from the reality of the existing position). A significantly greater sense of risk management can come from this. It will be far easier to identify what changes have to occur in order to suffer liquidation. Furthermore, projected earnings deltas are front and centre to evaluate risk versus return.

Simulated change:

To show the Account Health Simulation tool in action, let’s take the address used in the example above.

Say a user changes the value of WBTC to $24,000. Let’s also presume that given this increased WBTC price, those looking to short sell WBTC have driven up utilisation, increasing the cost of borrowing to almost 20%.

Alongside this, our prospective user will simulate that with this appreciation of BTC, more users have rotated from ETH based assets and so the utilisation has decreased, thereby decreasing the lending APY earnings of wstETH (to 4.81%) and cost to borrow WETH (to 0.99%).

Thanks to this new Account Health Simulation, new statistics relating to health under these conditions can easily be identified. The user is losing a substantial sum of money under these conditions, is close to liquidation should the value of BTC appreciate further / his collateral depreciate and if things remain as they are, he stands to be liquidated in around 300 days.

Roundup:

Thanks to this new tool implemented onto Euler Finance’s frontend, users can more clearly visualise different conditions to help develop a comprehensive and robust risk profile. This tool builds on an already well-fleshed out suite of tools that users of Euler’s front-end currently enjoy.

This content is provided by Euler Labs, Ltd., for informational purposes only and should not be interpreted as investment, tax, legal, insurance, or business advice. Euler Labs, Ltd, is an independent software development company.

Neither Euler Labs, Ltd. nor any of its owners, members, directors, officers, employees, agents, independent contractors or affiliates are registered as an investment advisor, broker-dealer, futures commission merchant or commodity trading advisor or are members of any self-regulatory organization.

The information provided herein is not intended to be, and should not be construed in any manner whatsoever, as personalized advice or advice tailored to the needs of any specific person. Nothing on the Website should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset or transaction.

Euler Labs Ltd, does not represent or speak for on or behalf of Euler Finance or the users of Euler Finance. The commentary and opinions provided by Euler Labs Ltd., are for general informational purposes only, are provided “AS IS,” and without any warranty of any kind. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable at the time of publication.

All content provided is presented only as of the date published or indicated, and may be superseded by subsequent events or for other reasons. As events markets change continuously, previously published information and data may not be current and should not be relied upon.

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