Health Factor
Health factor measures the relationship between your collateral and debt using current prices and liquidation thresholds. Below 1.0, the position may be liquidated. The value can change whenever prices, debt, collateral or accrued interest changes.
How it is calculated
Health factor=collateral value × liquidation thresholddebt value
- Collateral value, the USD value of what you have supplied and enabled as collateral, at oracle prices. On an isolated position that is one equity asset.
- Liquidation threshold, the share of collateral value at which the position becomes liquidatable, set per asset from stress tests and shown live in the app.
- Debt value, USDG borrowed plus all interest accrued since.
How to use it
Treat 1.0 as the liquidation boundary, not a target. A higher number gives the position more room for the collateral price to fall or for interest to increase the debt.
- Before borrowing, read the projected health factor after the transaction. Borrow less if the remaining buffer would not absorb a sharp move at the next market open.
- After borrowing, check it whenever the collateral price, borrow rate or debt changes. Interest continues to accrue while new borrowing is closed.
- If it is falling, repay USDG or add more of the enabled collateral. Both actions remain available during ordinary borrowing-hours and price closures.