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The health factor is the numeric representation of the safety of your deposited assets against the borrowed assets and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario. If the health factor reaches 1, the liquidation of your deposits will be triggered. A Health Factor below 1 can get liquidated. For a HF=2, the collateral value vs borrow can reduce by 1 out of 2: 50%. The health factor depends on the liquidation threshold of your collateral against the value of your borrowed funds. You can find all of the collateral parameters in the risk parameters section. If you would like to know more technical details about the health factor calculation, you can find those here.
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Aave is a decentralized non-custodial liquidity protocol where users can participate as depositors or borrowers.
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