Health Factor

Metric to measure your position health

The Health Factor is a numerical indicator of the safety of your deposited assets compared to your borrowed assets and their underlying value. A higher Health Factor signifies a safer position for your funds, reducing the risk of potential liquidation.

$$HF = (collateral * (LT))/debt$$

Where Collateral = Value of all collateral assets you provided in ETH LT = Avg Liquidation Threshold of all the collateral assets debt = Total borrowed amount + interest to be paid

You can find Liquidation Threshold details in the asset details page when clicked on asset in the markets page

How to save your position when your health factor is < 1

When the HF < 1 then users collateral is at the risk of getting liquidated! to prevent liquidation users can

1. Repay full or part of their loan so that HF increases > 1

2. Add more collateral so that it increases HF > 1