Health Factor

Health Factor (HF) is a numeric indicator of a credit position’s “health” on lending protocols like EVAA. Shows how close the position is to forced closure.

Formula

HF = Σ(collateral_i × liquidation_threshold_i) / Σ(debt_i)

Where:

• collateral_i — USD value of each collateral asset (or in the platform’s accounting currency).
• liquidation_threshold_i — liquidation limit per asset (e.g. 80% for USDT, 70% for TON).
• debt_i — value of each debt position.

Interpretation

• HF ≥ 2 — healthy position, large buffer to liquidation.
• HF between 1.5 and 2 — acceptable for experienced users; monitor.
• HF between 1.1 and 1.5 — risky zone; a 20-30% drop in collateral price could trigger liquidation.
• HF < 1.1 — critical; urgently top up collateral or repay debt.
• HF < 1 — position is liquidated (or will be on the next oracle update).

When liquidation happens

When HF drops below 1, the protocol auto-unwinds the position: sells part of the collateral on DEX, repays debt, returns the remainder (minus liquidation penalty) to the user. The liquidator (bot that spotted the position) takes a 5-10% penalty on the liquidation size.

How to keep HF high

1. Don’t max out LTV. If the protocol allows borrowing up to 70% of collateral — borrow 40-50%. Buffer against price drops.
2. Monitor daily (especially with HF < 2). Alerts in Tonkeeper or via DYOR Telegram bots.
3. Hold USDT reserve for quick top-up on drawdown. 30-50% of debt size — reasonable buffer.
4. Diversify collateral. USDT collateral has higher liquidation threshold (80%) and is less volatile; TON collateral is volatile and threshold is 70%.

Relation to other metrics

• LTV (loan-to-value) = debt / collateral. Inverse to HF: high LTV = low HF.
• Liquidation price = asset price at which HF reaches 1. Often shown in protocol UI.

For an EVAA-specific deep dive see the blog article “Health Factor in EVAA: Liquidation and Protection”.