Level 5 · The number that tracks liquidation distance

What is Health Factor?

Health Factor compares the value of your collateral (after Aave's thresholds) with the value of your debt.

If you have no debt, Health Factor does not apply.

If Health Factor is above 1, the position is not currently eligible for liquidation.

If it falls below 1, liquidators may repay some debt and seize collateral.

Health Factor moves when prices move and when interest accrues. Ronnie can interpret the current number, but cannot promise it will stay there.