What does health factor tell me?
Health factor describes the relationship between the collateral counted for a borrowing position and its debt. A position below 1 can become eligible for liquidation. A value above 1 is not a guarantee against future liquidation.
Prices and interest can change the result. There is no one health-factor number that is safe for every combination of assets. A color in the interface is only a summary cue.
Aave: health factor and liquidations (opens in a new tab)Before and after an action
The transaction preview shows the current and proposed health factor when available. Read the after value before borrowing or withdrawing collateral. This explorer blocks confirmation for an invalid result or one at 1 or below.
No debt means there is no borrowing balance for that calculation; it is not a measured health-factor score of zero. Portfolio’s Lowest health factor summarizes its active borrowing positions. Check individual Spoke cards as well.
What happens in liquidation?
Liquidation can repay part of a position’s debt using its collateral, with collateral also going to the liquidator as a bonus. It is a real loss of collateral, not just a warning notification.
V4 uses its own liquidation rules. Do not assume a fixed percentage from an older Aave version applies to every V4 position.
Aave V4 liquidation engine (opens in a new tab)The Spoke’s target is a different number
Target health factor is a Spoke setting used to size liquidation repayment toward a specified resulting health factor. It is not your current position’s health factor and it is not a personal recommendation.
Find ur own health factor in Portfolio or the transaction preview. Find the target setting in the Spoke summary. Keeping those two locations in mind helps avoid confusing a market rule with ur account’s condition.
Aave V4 liquidation engine (opens in a new tab)