What’s a Good Health Factor in DeFi? Managing Risk

What’s a Good Health Factor in DeFi? Managing Risk

Maintaining a good health factor in DeFi lending is crucial to avoiding liquidation. For stablecoin-backed loans, 1.3+ is usually safe, while riskier assets like ETH or BTC require 1.5-2.0+. Higher volatility tokens demand 2.0+ for security. Understanding what defines a good health factor helps optimize capital efficiency and risk management.