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Health factor is the main number that tells you whether your lending position is safe. XOXNO lending shows it after you supply or borrow. Aim to keep it well above 1.

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What it means

Your health factor compares the value of your collateral (weighted for liquidation) to your total debt.
Health factorStatus
Above 1Your position is solvent. You can borrow and withdraw within your limits.
Below 1Your position is liquidatable. A liquidator may repay part of your debt and take collateral.
No debtEffectively unlimited health. Withdrawals still follow market rules.
Below 1 means liquidatable. That is the line that matters.

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What moves it

Your health factor changes when:
  • Collateral prices rise or fall
  • You borrow more or repay debt
  • You add or remove collateral
  • Interest accrues on your debt
A drop in collateral price is the most common reason positions become unhealthy.

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How to stay safe

  • Keep a buffer above 1, not just barely above it. Prices can move quickly.
  • Prefer less volatile collateral if you borrow heavily.
  • Repay debt or add collateral when the lending app shows your health factor falling.
  • Check your position after large market moves.
Health factor is separate from your borrowing limit. You may be blocked from borrowing more even while health factor still looks fine, because LTV caps how much debt you can take on. See risk parameters.

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If you fall below 1

Liquidators can repay some of your debt and receive your collateral plus a bonus. Act early: supply more collateral or repay debt before you cross the threshold. See liquidations for what happens on chain.
For developers: The health factor calculation, worked example, and edge cases are in health factor.