🧑‍⚕️Health Factor

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

$$Health Factor = \frac{(Collateral Value + Leverage Value)}{Loan Value}$$

Equation of Liquidation Threshhold

$$\frac{1}{Health Factor} >0.95$$