Use-case

The Health Ratio is Aave's indicator of the position's overall health. Once it reaches 1, the position is liquidated.

It's calculated as:

Health Ratio = (collateral value * liquidation factor) / debt value

So if we take the example from the screenshot below, we'd have:

Health Ratio = (19,337 * 0.83) / 9,998.70

Health Ratio = 1.60

The Collateral Ratio represents the % difference between your collateral and your debt in dollar amounts. It's calculated as:

Collateral Ratio = collateral dollar amount / (debt dollar amount/100)

So if we take the example from the screenshot below, we'd have:

Collateral Ratio = $78.979 / 350.02

Collateral Ratio = 225.63%

The Safety Ratio is a measure of how far you are from liquidation, expressed as a percentage. It is inversely proportional to your borrow power used, so the more you borrow, the lower your Safety Ratio. It's calculated as: Safety Ratio = ( Collateral in dollar value * collateral factor) / debt amount in dollar value

So if we take the example from the screenshot below, we'd have:

Safety Ratio = ( $78,979 * 0.8) / 35,002

Safety Ratio = 181.63%

Say you've opened up a position on DeFi Saver where you have:

• 50 ETH in collateral

• 35.000 DAI in debt

Since the Collateral Ratio is based off of the dollar value of your collateral and debt, it's currently 225.63%

In this scenario, ETH's value is $1579 If ETH's value increases to $1800, your position's Collateral Ratio would increase to 257.12%

This inherently makes your position safer, without you actually making any moves. It also means there's an opportunity for you to increase your exposure to ETH with our Boost tool.

By clicking on the "Boost" button underneath your position, you can execute an automated transaction where:

• DAI will be borrowed

• Swapped into ETH

• Supplied into the position

So, since your Collateral Ratio increased to 257.12% you want to bring it back down to the previous 225% and increase exposure to ETH. You would simply input 9000 DAI into the Boost tool, get an estimate of your new position's value, and execute it.

Now you're holding an extra 5 ETH in your position, and can increase its value further if ETH's price keeps going up.

Say you've opened up a position on DeFi Saver where you have:

• 50 ETH in collateral

• 35.000 DAI in debt

Since the Collateral Ratio is based off of the dollar value of your collateral and debt, it's currently 225.63%

In this scenario, ETH's value is $1579 If ETH's value decreases to $1400, your position's Collateral Ratio would decrease to 199.99%

This inherently makes your position riskier, without you actually making any moves. It also means there's an opportunity for you to make it safer by using our Repay tool.

By clicking on the "Repay" button underneath your position, you can execute an automated transaction where:

• ETH will be withdrawn

• Swapped into DAI

• A part of the debt will be paid off

So, since your Collateral Ratio decreased to 199.99% you want to bring it back to the previous 225%. You would simply input 5 ETH into the Repay tool, get an estimate of your new position's value, and execute it.

Now you're holding 5 ETH less, however, your position is safer than it previously was.