Learn / Borrowing
Health factor
How far your loan is from being liquidated. Below 1.00, it can be.
In plain words
When you borrow against crypto, the protocol keeps checking that your collateral is worth enough to cover the loan. The health factor is that check as a single number: your collateral value, times the liquidation threshold, divided by what you owe.
Above 1.00 you're fine. At 1.00 a liquidator can step in, repay part of your loan and take some of your collateral at a discount. Most people keep it above 1.5 so a normal price swing doesn't put them at risk.
Worked example
You supply 10 ETH at $2,500 ($25,000) and borrow 15,000 USDC. Aave's liquidation threshold for ETH is about 83%.
Health factor = $25,000 × 0.83 ÷ $15,000 = 1.38. ETH can fall about 28%, to $1,807, before you can be liquidated.
Try it in the health factor calculator →Examples use sample numbers. Estimates, not advice.