What is it ?

The health factor is the numeric representation of the safety of your deposited assets against the borrowed assets and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario. If the health factor reaches 1, the liquidation of your deposits will be triggered. A Health Factor below 1 can get liquidated. For a HF equal to 2, the collateral value vs borrowed value can be reduced by half (1: 2). The health factor depends on the liquidation threshold of your collateral against the value of your borrowed funds.

The health factor is the numeric representation of the safety of your deposited assets against the borrowed assets and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario. If the health factor reaches 1, the liquidation of your deposits will be triggered. A Health Factor below 1 can get liquidated.

For a HF equal to 2, the collateral value vs borrowed value can be reduced by half (1: 2). The health factor depends on the liquidation threshold of your collateral against the value of your borrowed funds.