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Glossary · H
Health Factor
A numeric score in DeFi lending protocols (Aave, Compound, Morpho) that represents the safety of a collateralised borrowing position. Health Factor = (collateral value × liquidation threshold) ÷ borrow amount. A health factor above 1 means the position is safe; below 1 triggers automatic liquidation. Maintaining a health factor of 1.5+ is a common recommendation for comfortable buffer against liquidation from market volatility.
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