// definition
Health factor
Health factor
freshreviewed 0 days ago
Short definition
In Aave’s mechanism, collateral value weighted by liquidation thresholds divided by debt value. Below 1, the position becomes eligible for liquidation. It changes with prices and balances; actual parameters and execution rules depend on the deployment.
risk atlas
Knowledge map
Intuition
Falling collateral can trigger liquidation even while the interface remains available.
Formula
HF = collateral value weighted by liquidation thresholds / debt value.Why it matters now
Examining DeFi interfaces requires separating fees, liquidity and control over rules.