Account Health Factor

The account health factor is a real-time numerical indicator that represents the ratio of an account's total collateral value to its total borrowed debt and risk. A health factor above one indicates that the account is solvent and safe from liquidation.

As the factor approaches one, the account enters the danger zone where liquidation becomes imminent. This metric is used by both users and protocols to monitor the risk profile of a leveraged portfolio.

When the health factor drops below the maintenance threshold, the protocol triggers an automated liquidation. It provides a simplified view of complex margin data, allowing users to make informed decisions about adding collateral or reducing debt.

Maintaining a high health factor is essential for long-term position management in volatile crypto markets.