Crypto Health Factor Calculator

About the Crypto Health Factor Calculator

The health factor is the single most important number for any DeFi lending position. It measures how safe your collateral is relative to your debt. When the health factor drops to 1.0 or below, your position becomes eligible for liquidation — meaning anyone can repay part of your debt and claim your collateral at a discount.

This Health Factor Calculator computes your current health factor based on your collateral value, liquidation threshold, and outstanding debt. It also shows the price drop percentage needed to trigger liquidation and your maximum safe borrowing amount.

Regularly monitoring your health factor prevents costly liquidations. A 5% liquidation penalty plus gas costs can wipe out months of yield. Stay informed, stay safe.

Use the result to map token-release or fee scenarios and revisit the model when market conditions, unlock terms, or portfolio assumptions change.

When This Page Helps

Liquidation can cost 5-15% of your collateral in penalties. This calculator shows exactly how much breathing room you have and what price drop would trigger liquidation, letting you manage risk proactively.

How to Use the Inputs

1. Enter your collateral value in USD.
2. Set the liquidation threshold percentage for your collateral asset.
3. Enter the total amount you've borrowed in USD.
4. View your health factor and liquidation buffer.
5. Adjust inputs to simulate price changes and additional borrowing.

Example Calculation

Tips & Best Practices

• Keep your health factor above 1.5 for comfortable safety margins.
• Health factor of 2.0+ gives strong protection against sudden price drops.
• Set alerts for when health factor drops below your threshold.
• Use stablecoin collateral for higher effective health factors.
• Repay some debt or add collateral when health factor approaches 1.2.
• Remember that interest accrual slowly reduces your health factor over time.

Understanding Liquidation Mechanics

When your health factor falls below 1.0, a liquidation bot can call the protocol's liquidation function. The bot repays up to 50% of your debt and receives equivalent collateral plus a bonus (typically 5-10%). This penalty makes liquidation expensive and preventable.

Multi-Collateral Health Factor

If you supply multiple assets as collateral, each contributes to your weighted health factor differently because each asset has its own liquidation threshold. More volatile assets have lower thresholds, dragging down your weighted average.

Proactive Risk Management

Set up automated alerts using tools like DefiSaver or Instadapp that can automatically add collateral or repay debt when your health factor drops below a threshold. This automation prevents costly liquidations while you sleep.

Frequently Asked Questions

• What is a safe health factor?

  Most DeFi users aim for 1.5-2.0+. A health factor of 1.5 means you can withstand a ~33% drop. Conservative users target 2.0+, which handles a 50% drop. Aggressive leveragers may run at 1.2-1.5.

• What happens during liquidation?

  A liquidator repays a portion (typically 50%) of your debt and receives your collateral plus a liquidation bonus (5-15%). You keep the borrowed funds but lose collateral worth more than the debt repaid.

• What is the liquidation threshold?

  The liquidation threshold is the maximum borrowing power as a fraction of collateral. ETH might have an 82.5% threshold — meaning $82.50 can be borrowed per $100 of ETH collateral before liquidation occurs.

• Does interest affect the health factor?

  Yes. As borrow interest accrues, your debt increases, which reduces health factor. Over long periods with significant debt, interest alone can push you toward liquidation if you don't monitor it.

• Can I increase my health factor without repaying debt?

  Yes — deposit additional collateral. Adding collateral increases the numerator of the health factor formula. You can also swap to a collateral with higher liquidation threshold.

• Does health factor vary across protocols?

  Yes. Each protocol defines its own liquidation thresholds, bonus percentages, and health factor formulas. Aave, Compound, and Venus have different parameters. Always check the specific protocol documentation.