Aave Liquidation Price & Health Factor Calculator

Aave scores every position with a single number, the health factor. It is the value of your collateral, with each asset weighted by its liquidation threshold, divided by the value of everything you have borrowed:

A position becomes eligible for liquidation the moment its health factor drops below 1.0. Because collateral value moves with the market, the liquidation price is simply the collateral price at which the health factor reaches exactly 1.0.

Worked example: you supply 10 ETH at $3,000 (a $30,000 balance) and WETH has a liquidation threshold of 82.5%. Against that you borrow 15,000 USDC. The health factor is 30,000 x 0.825 / 15,000 = 1.65. Solving for the price where 10 x price x 0.825 = 15,000 gives a liquidation price of about $1,818 per ETH — a 39% drawdown from here.

Positions holding several collateral assets have no single liquidation price, because each asset carries its own liquidation threshold and any of them can move. The simulator handles that case by solving for the collateral prices that bring the health factor to 1.0 while holding the rest of the position fixed.

Borrowing power uses a second, stricter parameter: the loan-to-value ratio. Where the liquidation threshold decides when you get liquidated, LTV decides how much you are allowed to borrow in the first place, and it is always the lower of the two.

Continuing the example above, if WETH has an 80% LTV then $30,000 of collateral supports $24,000 of debt. With 15,000 USDC already drawn, $9,000 of borrowing power is left. Borrow all of it and the health factor falls to 30,000 x 0.825 / 24,000 = 1.03, which leaves almost no room for the price to move.

E-Mode changes both numbers. When a position's collateral and debt are highly correlated — ETH against ETH derivatives, or one stablecoin against another — Aave raises the LTV and liquidation threshold for that pair, which lifts both the borrowing power and the liquidation price. The simulator reads each market's live E-Mode categories and applies whichever one the position is actually using.

Liquidation is not a full loss of the position. A liquidator repays part of your debt and takes an equivalent amount of your collateral, plus a bonus — the liquidation penalty — as their incentive. That penalty is set per asset and typically runs from about 5% to 10% of the amount liquidated.

Which means the practical cost of being liquidated is the penalty on the liquidated portion, not the whole balance. It also means health factors slightly above 1.0 are dangerous rather than safe: gas spikes, oracle update lag and a fast-moving market can all carry a position through 1.0 before you are able to react.