An account's health factor is a measure of the account's collateralization levels. It is based on the account's total liability value, collateral value, and collateral liquidation factors.
To originate a loan, a user must ensure their health factor will be above 1.10 after the loan has been originated. If a user account's health factor falls below 1.00, their positions can be liquidated until their health factor reaches 1.02. See a rough health factor scale below:
- the account's health factor
- the number of collateralized assets held by the account
- the loan-to-value ratio for collateral asset
- the collateral value of collateral asset
- the number of outstanding loans held by the account
- the liability value of loaned asset
Liquidation factors are assigned to supported assets by the protocol, and they govern the point at which an account's positions can be liquidated.