About the DeFi Health Factor Calculator
This DeFi health factor calculator shows how close a crypto-backed loan on a lending protocol such as Aave, Spark or similar money markets is to liquidation. Enter how much collateral you have deposited, its current price, the asset’s liquidation threshold and how much stablecoin you have borrowed, and it returns your health factor, the collateral price at which you would be liquidated and how far the price can fall before that happens.
The health factor is the protocol’s safety score: above 1 the position is safe, and once it drops below 1 anyone can repay part of your debt and seize collateral at a discount. Borrowers use this calculator to pick a safe loan size, to decide how much to repay or top up during a market drop, and to see how much more they could borrow within the protocol’s maximum loan-to-value (LTV).
It models a single collateral asset against a stablecoin debt valued at $1. If you borrow a volatile asset, or post several collateral types, the protocol combines them with weighted thresholds and the liquidation price moves with both prices. Check each asset’s current risk parameters in the protocol’s interface, because governance can change them.
With the default inputs, the health factor is 1.66. Change any value above to recalculate instantly.
How to use the defi health factor calculator
- 1Enter how many collateral tokens you have supplied and their current price.
- 2Enter the asset’s liquidation threshold and maximum LTV from the protocol.
- 3Enter your current debt, including accrued interest.
- 4Check the health factor and liquidation price, then use the table to stress-test price drops.
Formula and method
The health factor compares your collateral, discounted by the liquidation threshold, with the value of your debt. A threshold of 83% means each $100 of collateral supports up to $83 of debt before liquidation. When HF falls below 1, liquidators may repay part of the debt and take collateral plus a bonus.
Setting HF = 1 and solving for the price gives the liquidation price. The maximum LTV is a separate, stricter limit that caps new borrowing; it does not trigger liquidation. With several collateral assets, the protocol uses the value-weighted average threshold, and interest accrual slowly increases the debt — so recheck the health factor regularly.
- HF
- Health factor (liquidation when below 1)
- LT
- Liquidation threshold of the collateral asset
- Debt
- Borrowed amount plus accrued interest, in dollars
Worked examples
10 ETH collateral, $15,000 borrowed
10 ETH at $3,000 is $30,000 of collateral. With an 83% threshold the health factor is 30,000 × 0.83 ÷ 15,000 = 1.66. Liquidation happens if ETH falls to 15,000 ÷ (10 × 0.83) ≈ $1,807, a drop of about 39.8%.
1 BTC collateral, $60,000 borrowed
At a 78% threshold, $100,000 of BTC supports $78,000 of debt before liquidation, so a $60,000 loan has a health factor of 1.30. BTC falling about 23% to $76,923 would trigger liquidation.
Near liquidation after a price drop
5 ETH at $2,000 backs $8,000 of debt — an 80% LTV. The health factor is just 1.04, and a 3.6% dip to about $1,928 would allow liquidation. Repaying part of the loan or adding collateral is urgent here.
Frequently asked questions
What is a health factor in DeFi?+
It is a number that measures how safely a loan is collateralised: the collateral value multiplied by its liquidation threshold, divided by the debt. Above 1 the loan is safe; below 1 it can be liquidated.
What is a safe health factor on Aave?+
There is no official safe level, but many borrowers aim for 1.5 to 2 or higher with volatile collateral like ETH. A health factor of 2 means the collateral can roughly halve in value before liquidation.
What is the difference between LTV and liquidation threshold?+
Maximum LTV is the most you can borrow when opening or increasing a loan. The liquidation threshold is higher and is the point at which the loan becomes liquidatable. The gap between them is your buffer.
What happens when my health factor drops below 1?+
Liquidators can repay your debt and receive the equivalent collateral plus a liquidation bonus set per asset. On Aave, up to 50% of the debt can be liquidated at once while the health factor is above 0.95 and the position is not small; at 0.95 or below, or when collateral or debt is under $2,000, up to 100% can be. You lose the bonus on top of the collateral sold.
How do I raise my health factor?+
Repay some of the debt, supply more collateral, or switch to collateral with a higher liquidation threshold. Repaying debt is usually the most efficient because it reduces the denominator directly.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.