Health Factor

Health factor is the single number a DeFi lending protocol shows to express how close a borrowing position is to liquidation. It comes from the value of the deposited collateral, weighted by each asset's collateral factor, divided by the value borrowed: above one the position is safe, and at or below one anyone may liquidate part of it and claim a bonus for doing so. Because both sides are priced by oracles that update continuously, the number moves without you trading — a fall in the collateral's price or a rise in the borrowed asset's can push a position into liquidation overnight.