Cross-Protocol Collateral Reuse Tool

WHAT IT DOES

Cross-Protocol Collateral Reuse Tool enables users to move collateral from one lending protocol to another, unlocking capital efficiency by reusing the same assets across multiple platforms. The tool reads your connected wallet address, source protocol address, target protocol address, token addresses, collateral balances, collateral utilization ratios, protocol health factors, liquidation thresholds, borrow limits, current block timestamp, and gas prices. It checks your health factor in the source protocol to ensure you won't be liquidated when withdrawing collateral, displays the liquidation threshold, and shows the collateral amounts on both protocols. Once confirmed, the tool withdraws collateral from the source protocol and deposits it into the target protocol in a single workflow.

HOW TO USE

Connect your wallet and select your network. Enter the source protocol address (where your collateral is currently held), the target protocol address (where you want to reuse the collateral), and the token address of the collateral asset. Specify the amount you want to move. Click "Fetch collateral status" to load your collateral balances on both protocols, your health factor in the source protocol, and the liquidation threshold for the token. Review the details carefully—the tool will warn you if your health factor is too low to safely withdraw. If you are eligible, click "Reuse collateral" to withdraw from the source and deposit into the target in a single transaction sequence. The tool handles approvals and both protocol interactions.

THE REAL MECHANISM — HEALTH FACTOR VERIFICATION WITH ATOMIC WITHDRAWAL-DEPOSIT

Unlike simple transfers that only check token balances, this tool implements a health factor verification system to protect against liquidation risk. The getUserCollateral function reads the user's collateral balance for a specific token on each protocol. The getHealthFactor function returns the user's health factor (as a percentage) on the source protocol—a health factor below 100% indicates liquidation risk. The getLiquidationThreshold function returns the liquidation threshold for the token. The tool verifies that the withdrawal amount does not exceed the source collateral and that the health factor remains above 100% after withdrawal. The execution flow is atomic: (1) withdraw from source protocol via withdraw, (2) approve the target protocol to spend the tokens if needed, and (3) deposit into target protocol via deposit. If any step fails, the entire operation reverts. The tool uses receipt.effectiveGasPrice for accurate cost reporting and validates that the source and target protocols are different before execution.

WHAT IT CANNOT SEE

Cannot predict liquidation risk—the tool cannot forecast price movements that could trigger liquidation after the withdrawal. It cannot ensure protocol solvency—the tool has no visibility into protocol reserves or potential insolvency. It cannot detect if protocols contain vulnerabilities—the tool does not audit the protocol contracts. It cannot verify off-chain collateral valuation accuracy—the tool relies on the protocol's valuation and cannot verify oracle prices. It cannot guarantee that the target protocol will accept the collateral or provide the same borrowing capacity.

PLEASE NOTE — EVM CHAINS ONLY

This tool exclusively supports EVM-compatible chains where ethers.js can connect via standard JSON-RPC. It does not support non-EVM chains such as Solana, Tron, Starknet, SUI, TON, Aptos, Bitcoin, Cosmos, or XRP. Both protocols must implement the specific interface expected by this tool (getUserCollateral, getHealthFactor, getLiquidationThreshold, withdraw, deposit). Always monitor your health factor after moving collateral—cross-protocol reuse can increase liquidation risk. This tool is a collateral management interface, not a financial advisor or investment strategist.