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 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 Healthvalue 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 <1.1: Red
At Health < 1, liquidations will occur
Colored indicators used to represent health
Borrow Limit represents your percentage of the maximum amount you can borrow, based on the value you have deposited as collateral and the available liquidity.
To improve Health, the user can:
Repay a portion or the full amount of the borrowed amount