What happens when my health factor is reduced?
- Aave Protocol
- Aave liquidation
- Borrow rate
- Aave Pool Aave
Expert
What happens when my health factor is reduced?
Answers 1
Depending on the value fluctuation of your supplies, the health factor will increase or decrease. If your health factor increases, it will improve your borrow position by making the liquidation threshold more unlikely to be reached. In the case that the value of your collateralised assets against the borrowed assets decreases instead, the health factor is also reduced, causing the risk of liquidation to increase.