NX Finance Whitepaper
  • WELCOME TO NX FINANCE
    • ❓What is NX Finance
    • 💡Background
    • 🧐FAQ
    • 🪂Airdrop
      • 🏃Get Started Now!
      • 💯How to Earn Points
      • 👯Referral
      • 🤝Teams
      • 🏕️Nadventure FAQ
      • Nadventure Pre-season 2
    • 🗺️Roadmap
    • 👣User Guide
      • 🛝Slippage
  • PROTOCOL MECHANISM
    • ⚙️How NX Finance Works
    • ⚖️Strategy 1|Fulcrum Strategy
      • 👓User Interface Introduction
      • 🫳Lending Vault
      • 🫴Leverage Vault
      • 💸Profit & Loss
      • 💵Fulcrum Strategy Reward Calculation
    • 💰Strategy 2 | Gold Mining Strategy
      • 🔨Mechanism
      • 📉Interest Rate Curve
      • 🟢Solayer Integrtion
      • 🟣SolanaHub Integration
    • 0️⃣Strategy 3|Delta Neutral Vault
      • 📉Funding Rate Reversion Vault
        • ❔Funding Rate Reversion Vault FAQ
      • JLP Delta Neutral Vault
        • ❔JLP Delta Neutral Vault FAQ
      • ❗Risks of the Delta Neutral Strategy
    • 🧑‍⚕️Health Factor
    • 💧Fees
    • ‼️Risks
  • NX
    • 🥩Staking
    • 🪙Token Distribution
      • 🔥Token Burn
    • 🍯IDO Details
  • 📪Resources
    • 🖼️Brand Kit
  • AUDITS & SECURITY
    • 🔐Audits
    • 🔮Oracle
    • 🧑‍🎨NX UXUI Bounty
  • Terms & Privacy
    • 📁Term of Use
    • 🔏Privacy Policy
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On this page
  • What is Health Factor?
  • Three levels of Health Factor
  • Equation of Health Factor
  • Equation of Liquidation Threshhold
  1. PROTOCOL MECHANISM

Health Factor

PreviousRisks of the Delta Neutral StrategyNextFees

Last updated 9 months ago

What is Health Factor?

It is an index that indicates the risk level of your position according to the current token price.

Three levels of Health Factor

Red: Your position is currently at high risk, approaching the liquidation threshold. You can withdraw your collateral now; however, some of it will be used to repay the lending pool. Immediate action is recommended to prevent significant losses.

Yellow: The risk level of your position is moderate. It is crucial to closely monitor market conditions and be prepared to take prompt action to mitigate potential losses.

Green: Your position is secure, with ample margin before reaching the liquidation point. While immediate concern is minimal, continued vigilance is advised.

Health Factor

Index

Red

X < 1.15

Yellow

1.15 < X < 1.25

Green

1.25 < X

Equation of Health Factor

Health Factor = (CollateralValue+LeverageValue)LoanValueHealth Factor = \frac{(Collateral Value + Leverage Value)}{Loan Value}Health Factor = LoanValue(CollateralValue+LeverageValue)​

Equation of Liquidation Threshhold

1HealthFactor >0.95\frac{1}{Health Factor} >0.95HealthFactor1​ >0.95
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