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Health factor is the main number that shows whether your lending position is within protocol liquidation thresholds. XOXNO shows it after you supply or borrow. Aim to keep it well above 1. Health factor above 1 is not a guarantee against loss.

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What it means

Your health factor compares your collateral to your debt. But not all of your collateral counts. Each asset has a liquidation threshold — the share of its value the protocol is willing to count when it checks whether you are safe. An asset with a 78% threshold contributes 78 cents of safety per dollar supplied. Riskier assets get a lower threshold.
Below 1 means liquidatable. That is the line that matters.

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A worked example

You supply 1,000∗∗ofanassetwitha∗∗78borrow∗∗1,000** of an asset with a **78% liquidation threshold**, and you borrow **500.
Comfortably above 1. Now suppose that collateral falls by half:
Below 1, so the position can now be liquidated. Notice the debt never moved — only the collateral price did. That is the most common way positions go underwater.

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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 keep a buffer

  • 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.