> For the complete documentation index, see [llms.txt](https://docs.tydro.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tydro.com/introduction/concepts/liquidations.md).
# Liquidations
The health factor is a key metric in Tydro that indicates the safety of a borrow position. It is calculated as:
```
Health Factor = (Total Collateral Value × Liquidation Threshold) / Total Borrow Value
```
A health factor above 1 means the position is safely overcollateralised. If it falls below 1, the position becomes eligible for liquidation.
Each asset has its own liquidation threshold, defined through protocol parameters. These parameters determine how much collateral must be maintained for an open loan. For example, the liquidation threshold for most assets will typically be around 75–80% LTV, meaning the loan can reach up to 75–80% of the collateral value before liquidation becomes possible.
For example, if a user supplies $10,000 in ETH with an 80% liquidation threshold and borrows $6,000 in USDG, the health factor would be 1.33.
The health factor changes with market conditions. If the value of the collateral increases, the health factor improves. If it decreases, the health factor drops, increasing liquidation risk. Users can raise their health factor by supplying more collateral or repaying part of their borrow position.
There is no fixed “safe” health factor. What is considered safe depends on the volatility and correlation of the assets. Lower health factors may be acceptable for stable or correlated assets like stablecoins, while more volatile assets require higher buffers.
When a position is liquidated, up to 50% of the borrowed amount can be repaid by a liquidator. In return, the liquidator receives a portion of the collateral along with a liquidation bonus. This process is permissionless, meaning anyone can initiate a liquidation if the conditions are met.
Liquidations are competitive. Liquidators monitor positions closely and aim to execute transactions quickly when a borrower's health factor falls below the threshold.
Tydro includes real-time LTV alerts to help borrowers track their position safety. Monitoring the health factor regularly is essential to avoid liquidation.
### Tools for Managing Health Factor
* Simulate health factor changes: [DeFi Simulator](https://defisim.xyz/)
* Auto-repay borrow position: [DeFi Saver](https://defisaver.com/)
For more information on participating as a liquidator, see the developer guide.
---
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