Health factor
HF
An Aave/Spark-style metric: collateral × liquidation-threshold / debt — liquidation triggers when it drops below 1.
Health factor = sum(collateral_value × liquidation_threshold) / sum(debt_value). HF > 1 = safe; HF < 1 = liquidatable. Active borrowers monitor HF in real time and top up collateral or repay debt as price moves.
Related terms
- LiquidationForced sale of collateral when a borrower's health factor falls below the protocol's threshold.
- Collateral ratioCollateral value / debt value — the headline solvency metric for CDPs.
- AaveDecentralised lending market — the largest by TVL — with stablecoin supply and borrow markets across 12+ chains.