LiquidationOn-chainRiskCollateral
What is a good health factor on Aave? The price-fall table
Aave names no safe health factor. This table converts levels from 1.1 to 3 into the collateral fall each absorbs before liquidation, using Aave's formula.
By Staff, Lend Ledger
What is a good health factor on Aave? Aave names none: its help centre says no level is universally safe, as that depends on volatility and correlation. What each level absorbs is calculable: against stablecoin debt, 1.5 survives a 33.3% collateral fall before reaching 1; 3 survives 66.7%.
This desk read Aave’s help centre and two Aave Labs V4 posts on 18 October 2026.
What is a good health factor on Aave, level by level?
Desk arithmetic; assumes stablecoin debt, collateral moving together, fixed threshold.
| Health factor | Fall to HF 1 | Fall to HF 0.95 |
|---|---|---|
| 1.1 | 9.1% | 13.6% |
| 1.25 | 20% | 24% |
| 1.333 (Aave’s example) | 25% | 28.8% |
| 1.5 | 33.3% | 36.7% |
| 2 | 50% | 52.5% |
| 2.5 | 60% | 62% |
| 3 | 66.7% | 68.3% |
A ranking Reddit reply puts 2.5 at about a 50% cushion; the formula says 60%. Accrued interest also lowers the factor.
Why 0.95 matters on Aave V3
Per the help page, up to 50% of debt can be liquidated above 0.95 if collateral and debt each reach $2,000; up to 100% at 0.95 or below, or under $2,000. Partial liquidations must leave $1,000 of each. Aave’s V4 post describes the 50%/100% split as V3’s.
What changes in Aave V4?
V4 launched on Ethereum mainnet on 30 March 2026. Liquidators repay only enough to restore a governance-set Target Health Factor per Spoke; the bonus rises as the factor falls.
Custodial loans use an LTV trigger instead; see also what liquidation is.
Frequently asked questions
How is the Aave health factor calculated?
Aave’s help centre gives total collateral value times the weighted average liquidation threshold, divided by total borrow value. Its example: $10,000 of ETH at an 80% threshold against $6,000 of GHO borrowed gives 1.333. Aave Governance sets each asset’s threshold.
What happens when the health factor falls below 1?
The position becomes eligible for liquidation by anyone. The liquidator repays part or all of the debt and takes equivalent collateral plus a liquidation bonus. Under the help page’s V3-era rules, the share of debt exposed rises from 50% to 100% at 0.95.
Is a health factor of 1.5 safe on Aave?
Aave calls no level safe. On this desk’s arithmetic, 1.5 absorbs a 33.3% collateral fall against stablecoin debt before reaching 1. Aave says lower levels may be acceptable for correlated assets, such as stablecoins or ETH-linked tokens; the right level depends on volatility.
Nothing here calls Aave regulated anywhere; no register was read. Governance can change these rules. Borrowing against crypto risks the whole collateral; nothing here is financial advice.