Health factor and liquidations
The health factor measures the safety of a position. When it falls below 1, the position is undercollateralized and can be liquidated.
Health factor
Health factor = Borrow limit ÷ Total debt| Value | Label | Description |
|---|---|---|
| Above 2 | Safe | Collateral comfortably covers the debt |
| 1.25 to 2 | Caution | A moderate price move can bring the position at risk |
| Below 1.25 | At risk | Close to liquidation |
| Below 1 | The position can be liquidated | |
| ∞ | — | No debt |
The health factor is displayed in the account summary of the Markets page and in every borrow and repay modal, as it will be after the action.
The health factor changes without any action on your part:
- it decreases when the value of your collateral decreases;
- it decreases as interest accrues on your debt;
- it increases when the value of your collateral increases or when you repay.
The collateral factor is the liquidation threshold: there is no separate margin between the borrow limit and the liquidation point. The borrow modal's suggested maximum, 80% safe limit, corresponds to a health factor of 1.25. Borrow less to keep a larger buffer.
Liquidations
When the health factor is below 1, a liquidator repays part of the debt and receives collateral in return, at a discount. The liquidated position loses the collateral seized, including the liquidation penalty. There is no grace period: a position can be liquidated as soon as its debt exceeds its borrow limit.
Anyone can liquidate an undercollateralized position. Securd also operates its own liquidation keeper.
| Parameter | Value (mainnet, 2026-10-11) | Description |
|---|---|---|
| Close factor | 50 % | Maximum fraction of a debt repaid in one liquidation. A position can be liquidated again while its health factor remains below 1 |
| Liquidation incentive | 10 % | A liquidator repaying $100 of debt receives $110 of collateral, at oracle prices |
| Liquidation penalty | 10 % | The value lost by the liquidated position on the seized collateral |
| Protocol seize share | 2.8 % | Fraction of the seized collateral kept by the protocol as reserves |
The close factor and the liquidation incentive are protocol-wide. The current values are displayed on each market's details page, Market Analytics → Liquidation.
A liquidator chooses which collateral market to seize. LP collateral is seized at its oracle price, which already includes the haircut. See LP tokens as collateral.
Avoiding liquidation
- Keep the health factor above 2.
- Monitor the account summary after a borrow and during market movements.
- When the health factor reaches Caution, repay part of the debt or supply more collateral.
Price not available
The protocol needs a valid oracle price for every market an account holds. When a price is missing or stale, the protocol cannot evaluate the account and reports an error instead of a liquidity value. The app displays:
Price not available yet — borrowing and withdrawing are paused until the LP price is published.
While the price is unavailable:
- borrowing and withdrawing are disabled for the account, because the borrow limit cannot be checked;
- liquidation of the account is not possible either;
- supplying and repaying remain available;
- the borrow limit, the health factor and the borrow maximum are not displayed.
An LP price is considered stale 15 minutes after its last publication; XRP and USDC prices one hour after their last update. The LP Prices page displays the current status of each LP price.
Haircut on LP collateral
The protocol values LP collateral at a discount to its DEX value, called the haircut. The borrow limit contributed by LP collateral is computed on the discounted price, then multiplied by the collateral factor. The haircut is a setting of the price publisher; the collateral factor is a protocol parameter changed through a 48-hour timelock. See LP Prices.