Plain English
Health factor is a protocol-specific metric showing how close your loan is to liquidation. Most lending protocols (Aave, Morpho) express it as a number: above 1.0 is safe, below 1.0 means your position is eligible for liquidation.
How it actually works
The formula combines collateral value, borrow value, and the protocol’s liquidation thresholds. As your collateral price rises or borrowed value falls, health factor goes up. As collateral price falls or borrow value rises, health factor falls toward 1.0. Members track health factor as the leading indicator of liquidation risk and a single number that summarizes a position’s overall risk state.
What it means for you
For active borrowers, health factor is the operational metric to monitor daily. Different members maintain different target zones — conservative (3.0+), moderate (2.0–3.0), aggressive (1.5–2.0). Whatever your target, the discipline is to act before the buffer collapses, not after.
We cover health-factor targeting, automation tools that alert you when it drops, and the playbook for restoring buffer without panic-selling collateral.
Educational content only. Not investment, tax, or legal advice.