Health Factor and Liquidations

Health Factor

GM Lending uses an over-collaterized model, which is maintained by overall pool and individual user health factor requirements.

A user's Health Factor is determined by the following:

  • maximumBorrowableValue = summation of each collateral asset's total value

  • totalUserBorrowValue =

  • weightedBorrowFactors =

  • actualBorrowableValue =

  • Health Factor = actualBorrowableValue / totalUserBorrowValue

Ideally, every user manages their positions so that they keep their Health Factor above 1.--. This helps ensure the overall health of the protocol. If a user's Health Factor falls below 1 due to price volatility or other factors, then the user can be liquidated (their collateral assets will be used to pay off their outstanding borrows).

Liquidation by Other Users

Liquidation Bot

The GM Lending platform has its own Liquidation Bot. This bot...

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