Why LP collateral needs automation
Managing an LP position that also serves as collateral is demanding. Fees accumulate but do not always stay productive. Liquidity ranges drift as markets move. Health factors weaken as price divergence changes the collateral profile. Both sides of the balance sheet stay live. The LP position evolves, and the debt against it evolves with borrowing conditions. For users borrowing against LPs through Avana on Aave v4, that is the day to day reality.
