Decentralized Finance (DeFi)

Health Factor

A single number, used by lenders such as Aave, that summarizes how safe a loan is. Above 1 the position is safe, and at or below 1 it can be liquidated. Falling collateral prices or rising debt both push it down.

General education, not investment, legal or tax advice. Markets and regulation change quickly: where a definition depends on current law or on a recent event, check the latest coverage before relying on it.