Auto-Repayment

Tectonic’s Auto-Repayment is a unique feature designed to help protect your positions from liquidation. It automates debt repayments using your own collateral when the Health Factor (Lava Bar) becomes too high, so you don’t need to worry or constantly check your position.

*Note: Auto-Repayment is not a guaranteed way to avoid liquidation. There are cases where it may fail. See below for more details.

How It Works:

You decide on the Health Factor (HF) thresholds:

• Trigger HF (e.g., 70%): If your HF reaches this %, it will trigger repayment.

• Target HF (e.g., 20%): Once the above Trigger HF is met, Auto Repayment will repay your debt using your collateral to bring your HF down to your set Target level.

  • e.g., Auto Repayment will use your collateral to pay down HF from 70% down to 20%.

The below rule that must be followed:

• Target HF < your current HF < Trigger HF < your Liquidation Threshold

Once Auto Repayment is enabled, it will continuously monitor your position. When your Trigger HF is reached, it uses your available collateral to repay your debt until your Target HF is reached. A 0.3% fee is charged only when a repayment transaction is successful

Key Terms

Term	Definition
Trigger Health Factor	The HF % that activates auto-repayment
Target Health Factor	The HF % your position will be adjusted to after repayment completes
Current Health Factor	Your current HF
Liquidation Threshold	The HF where your position becomes eligible for liquidation

Setup & Permissions

1. Under Dashboard, Enable Auto-Repayment per Pool (Main, Veno, DeFi.)

2. Set HF Thresholds:

   1. Target HF < your current HF < Trigger HF < your Liquidation Threshold

3. Choose the top 3 collaterals you wish to use to repay your debt. Repayment will occur in the specific order you select. For example, it can be the following:

   1. CRO

   2. CDCBTC

   3. USDC

      1. In the above situation, all the CRO collateral will be used for repayment first.

      2. If the CRO is insufficient to repay down to Target HF, then it will sell CDCBTC next.

      3. If the CDCBTC is sold and Target HF is still not reached, then it will finally sell USDC

4. Once activated, this feature stays enabled unless manually disabled

5. Users can:

   1. Adjust trigger/target thresholds (requires a new approval)

   2. Add/repay debt or collateral (if HF < trigger)

   3. This feature will block actions that would push HF above trigger

*Important Considerations

Auto-Repayment is not a guaranteed way to avoid liquidation. There are cases where it may fail:

• Slippage exceeds tolerance set

• Extreme price movements

• Insufficient collateral to repay

Please also note:

• Auto Repayment works per isolated pool only

• Actions like withdrawing collateral or adding debt are blocked if HF > trigger

• Feature remains active even if debt is fully repaid

FAQ

What happens after auto-repay is triggered?

Your position is adjusted to the Target HF. Auto-repay remains active.

Can I disable it anytime?

Yes. Disabling will prompt a confirmation and on-chain transaction.

Will auto-repayment prevent liquidation in all cases?

No. Auto-Repayment reduces your liquidation risk but does not eliminate it. In periods of extreme volatility, rapid price movements, low liquidity, or failed transactions (e.g., slippage or network congestion), your HF may reach or exceed the liquidation threshold before repayment can be executed.

Auto-Repayment is a best-effort automation and not a guarantee. You remain responsible for monitoring and managing your positions, especially during fast-moving markets.

Are there any gas fees to enable Auto-Repayment?

Yes. Enabling Auto-Repayment will incur a standard gas fee.

Do I need to pay gas fees when updating my Trigger or Target LTV?

Yes. Changing your Trigger or Target LTV requires a new approval transaction on-chain.

Will I need to pay gas fees for each collateral approval?

Each approval is a separate transaction and will incur its own gas fee. Charge will only occur if you haven’t approved the token previously, or your approved spending cap isn’t enough. The frontend will check your allowance and prompt for approval when necessary.

Are there gas fees when Auto-Repayment executes automatically?

Yes. Each repayment transaction on-chain incurs a gas fee.