Prime Account
Health and liquidation
How the health factor works and what happens when it falls.
health factor = Σ (collateral value × liquidation threshold) ÷ debt
| Health factor | State | What to do |
|---|---|---|
| ≥ 1.50 | Healthy | Nothing |
| 1.15 to 1.50 | Watch | Consider lowering leverage |
| 1.00 to 1.15 | At risk | Repay or add collateral |
| < 1.00 | Liquidatable | Part of the account can be closed by anyone |
| < 0.95 | Fully liquidatable | The whole position can be closed |
Partial before full
Below 1.00 a liquidator may repay up to half the debt (CLOSE_FACTOR_BPS = 5000) and take collateral plus a premium. Half of that premium goes to the InsuranceFund. Only below the full-liquidation threshold can the whole account be closed. Every liquidation must improve the account's health.