DeFi & Yield

What is a liquidation threshold and health factor?

A liquidation threshold is the point at which a DeFi loan becomes undercollateralized and the protocol can sell your collateral to repay the debt. The health factor is a single number expressing how far a position sits from that point, where a value above one is solvent and at or below one triggers liquidation. For example, if collateral falls in value, the health factor drops toward one and the position nears forced sale. Sharp price moves can liquidate positions quickly, and outcomes are not assured. Qatobit's approach centres on unleveraged, research-led index exposure. Read more.

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