Health factor
The number a lending service uses to track a loan's safety. If it falls below 1, the loan can be liquidated.
Health factor in more detail
Aave's own example: you deposit $10,000 of ETH with a liquidation threshold of 80% and borrow $6,000 of a stablecoin. The health factor is 10,000 × 0.80 ÷ 6,000 = 1.33.
If the health factor falls below 1, the loan can be liquidated.
Suppose ETH falls 25%. Your collateral is now worth $7,500. The health factor is 7,500 × 0.80 ÷ 6,000 = 1.0. One more tick down and you are below the line.
All 128 terms · Checked against the lesson's sources on 10 October 2026.
The course by email
Five short emails to get you started, each built on one lesson. After that, one short email a month about what is new. No price tips and no hype.
Free. Unsubscribe any time. See our privacy notice.
Want your progress saved too? Create a free account.