Health

Health is a numeric representation of the degree of safety of user assets deposited as collateral. A higher value indicates that the user's funds have greater safety from liquidation.

If Health goes below 1, a portion of the user's collateral can be liquidated.

The Health of a user's funds is a dynamic state, and depends on the liquidation limit of the collateralized position against the value of the loan.

Health fluctuations

Health is how “safe” your loan is, defined as the proportion of total deposited collateral against the total value of the loan. It increases or decreases based on the value fluctuation of the user's deposited asset value against the user's borrowed value.

Higher Health value improves the user's collateral safety and borrow position

Lower Health value worsens the user's collateral safety and borrow position

Having Health below 1 results in the potential liquidation of a portion of the user's collateral.

The protocol also displays colored indicators based off the numerical value of health where:

Health > 2 : Green

Health < 1.99: Orange

Health <1 : Red

At Health < 1, liquidations will occur