Don't rush to memorize the definition: why does borrowing on-chain require overcollateralization?
When a position on Aave has a health factor below 1, liquidators can liquidate it.
Under Aave's rules, the health factor is calculated by multiplying the value of each collateral asset by its liquidation threshold, adding the results, and dividing by the total value borrowed.
When markets are highly volatile, keep an eye on the health factor and, if necessary, promptly add collateral or repay part of the loan.
$AAVE is the governance token of the on-chain lending protocol Aave.
#AAVE
Just sharing some thoughts—make your own decisions when buying or selling.
When a position on Aave has a health factor below 1, liquidators can liquidate it.
Under Aave's rules, the health factor is calculated by multiplying the value of each collateral asset by its liquidation threshold, adding the results, and dividing by the total value borrowed.
When markets are highly volatile, keep an eye on the health factor and, if necessary, promptly add collateral or repay part of the loan.
$AAVE is the governance token of the on-chain lending protocol Aave.
#AAVE
Just sharing some thoughts—make your own decisions when buying or selling.
