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Health represents the level of security for user assets used as collateral, indicated by a numerical value. A higher Health value indicates a greater level of safety for the user's funds, reducing the risk of liquidation.
When Health drops below 1, a portion of the user's collateral may be subject to liquidation. The Health value is dynamic and depends on the collateralized position's liquidation limit in relation to the loan value.
Health experiences fluctuations based on the changing value of the user's supplied assets compared to their borrowed value. A higher Health value enhances the safety of collateral and the borrowing position, while a lower Health value increases the vulnerability of collateral and the borrowing position.
If Health falls below 1, there is a possibility of partial collateral liquidation.
Additionally, the protocol utilizes colored indicators based on the numerical Health value to provide visual cues.
To enhance the Health value of their position, users have two options:
- 1.Repay: Users can choose to repay a portion or the entire borrowed amount. By reducing their outstanding debt, the proportion of total collateral to the loan value increases, thus improving their Health.
- 2.Add Collateral: Another way to improve Health is by adding more collateral to the position. By increasing the value of the collateral, users can strengthen their position's safety and boost their Health.
These actions allow users to actively manage their positions, maintain a healthier borrowing profile, and reduce the risk of potential liquidation.