What is Health Factor?
Health factor is a number that represents the safety of your borrowed position. When it drops below 1, your position can be liquidated.
Calculation
Health Factor = (Collateral Value × Liquidation Threshold) / Borrowed Value
Safe Ranges
- Above 2: Generally safe
- 1.5-2: Monitor closely
- Below 1.5: Consider repaying or adding collateral
- Below 1: Liquidation risk