Health Factor

The Health Factor is a numerical value that indicates the safety of your position from its liquidation point. A higher value indicates a healthier position, and thus, greater safety against liquidation.

If the Health Factor drops to 1 or below, liquidation is triggered.

The calculations are as follows:

Health Factor = Collateral Credit / Borrow Credit

$$HealthFactor=CollateralCredit/Borrow Credit$$

Where

• Collateral Credit:

$$Collateral Credit=\sum(Token Amount*CollateralTokenPrice*CollateralFactor)$$

• Borrow Credit:

$$BorrowCredit=\sum(TokenAmount*BorrowTokenPrice*BorrowFactor)$$

Collateral and Borrow Factors

Note: Collateral Factor should be <= 1, Borrow Factor should be >= 1

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