liquidate_loan

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

With no annotations, the description carries the burden. It discloses the key safety behavior: it only builds an unsigned transaction, thus no on-chain state change. It also states the API key requirement. However, it does not reveal what the output looks like, whether it performs health checks before liquidation, or any failure conditions.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is extremely concise: two sentences, no redundant text, and the core action is front-loaded. Every phrase earns its place, including the API key requirement.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Despite having no output schema, the description does not mention what the tool returns (presumably an unsigned transaction object) or how it relates to sibling tools like simulate_transaction or broadcast_transaction. It also leaves ambiguity about the optional market_id parameter and the conditions under which liquidation is attempted, making the description incomplete for a 4-parameter tool.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100%, so the schema already documents each parameter (loan_id, market_id, max_repayment, wallet_address). The description adds no additional parameter-level semantics beyond what is in the schema, so a baseline score of 3 is appropriate.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the action: 'Build unsigned tx to liquidate an unhealthy loan,' with a specific verb (build), resource (unsigned tx), and target (unhealthy loan). This distinguishes it from related tools like repay_loan and broadcast_transaction by emphasizing 'unsigned tx' and 'liquidate'.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description implies the use case (liquidating an unhealthy loan) but does not explicitly mention when to use this tool over alternatives like repay_loan, nor does it note that the built transaction would need to be broadcast separately via broadcast_transaction. It also doesn't describe prerequisites beyond the API key requirement.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.