Crypto DeFi Health Factor Calculator

The DeFi Health Factor Calculator is a critical risk management tool for users interacting with decentralized lending protocols like Aave, Compound, and MakerDAO. When you deposit collateral to borrow other crypto assets, protocols assign you a Health Factor to determine the safety of your loan. This calculator allows you to input your supplied assets, borrowed amounts, and protocol parameters to monitor your real-time risk of liquidation.

A Health Factor below 1.0 means your collateral is eligible for liquidation, where the protocol automatically sells your assets at a discount to repay your debt. By calculating your exact liquidation price and Max LTV (Loan-to-Value), this tool acts as an early warning system. It empowers you to stress-test market drops and know exactly when you need to top up your collateral or repay your loan to protect your capital.

The Health Factor is: Health Factor = (Collateral Value × Liquidation Threshold) / Borrowed Value. Current LTV: LTV = (Borrowed Value / Collateral Value) × 100%. Liquidation price: Liquidation Price = Borrowed Value / (Collateral Amount × Liquidation Threshold). A Health Factor below 1.0 triggers immediate liquidation.

Monitor your loan health closely. Use the liquidation price calculator to understand collateral volatility, or the position size calculator to manage your initial debt. You can also compare stablecoin lending yields to find the best rates for your deposited collateral. Before interacting with any DeFi protocol, verify its contract addresses are not on community blacklists using the Address Risk Checker and check unfamiliar collateral or reward tokens with the Token Risk Checker. If you want the broader framework first, read DeFi Risks, then continue into Stablecoin Depeg Risk if stable principal is central to your setup.