What Happens When Your Aave Health Factor Drops Below 1.0
Understand the mechanics, penalties, and consequences of Aave liquidation when your health factor falls below 1.0. Learn how to protect your position.
What Is the Health Factor?
The health factor (HF) is the primary safety metric for your Aave position. It measures the ratio of your collateral value (adjusted by liquidation threshold) to your borrowed amount. When HF > 1.0, your position is safe. When HF < 1.0, liquidation can occur.
The Liquidation Trigger
When your health factor drops below 1.0, anyone can call the liquidation function on your position. A liquidator repays up to 50% of your debt and receives your collateral at a discount (the liquidation bonus), typically 5-10% on Aave v3 Polygon.
What You Lose
In a liquidation, you lose both your collateral and the liquidation bonus. For example, if you borrowed $5,000 USDC against $10,000 ETH, a liquidator might repay $2,500 of your debt and seize $2,750 worth of ETH — a 10% loss on the liquidated portion.
How Guardian Rescue Helps
Guardian Rescue intervenes before liquidation by repaying your debt using a flash loan and your own collateral, all in one atomic transaction. The service fee is capped at 2.5% (250 bps), significantly less than the liquidation penalty.