Health Factor in EVAA: Liquidation and Protection (2026)

TL;DR

Health Factor (HF) on EVAA is your position’s health gauge. Formula: HF = (Σ collateral × liquidation_threshold) / Σ debt. While HF > 1, you’re safe. HF < 1 — liquidation. Penalty 5–10% of the liquidated amount. The main defence is not running on the edge: keep HF ≥ 1.5 in normal mode and ≥ 2.0 if you’re not willing to monitor daily. Below — the formula, examples, tactics, and a real walkthrough.

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DeFi liquidation is irreversible. Once triggered, the penalty is gone, no rollback. Read this before borrowing at max LTV.

What Health Factor is

Health Factor is a dimensionless ratio that shows how far your position is from the liquidation point. The EVAA formula (and pretty much every money market like Aave):

HF = Σ (collateral_value_i × liquidation_threshold_i) / Σ (debt_value_j)

Where:

• collateral_value_i — current USD value of each collateral asset (per oracle).
• liquidation_threshold_i — liquidation threshold for that asset (e.g. 75% for TON, 80% for USDT).
• debt_value_j — current USD value of each debt (including accrued interest).

Read it as:

• HF > 1 — position healthy. Bigger = more buffer.
• HF = 1 — liquidation point. Any further price drop triggers liquidators.
• HF < 1 — liquidation window open. Bots race to close your position first and pocket the penalty.

Liquidation threshold vs LTV — common confusion

These are two distinct parameters, and quick guides mix them up.

Parameter	What it means	When it applies
LTV (Loan-to-Value)	max you can borrow when opening	at Borrow time
Liquidation threshold	level that triggers liquidation	continuously after opening

On EVAA for TON, empirically: LTV ≈ 70%, threshold ≈ 75%. The 5 pp gap is the buffer the protocol leaves so a borrower has a chance to react to a price dip.

For USDT as collateral: LTV ≈ 80%, threshold ≈ 85%. Stablecoins are “safer”, so thresholds are higher.

When liquidation triggers

Liquidation kicks off the moment HF < 1. That happens because of:

1. Collateral price drop. TON falls 25% in an hour — collateral value tanks, debt in USD stays the same, HF craters.
2. Debt growth via interest. A loan held for 6 months at 12% — debt grew by 6%. If HF started at 1.05, that alone can trip the trigger without any price move.
3. Protocol parameter changes. EVAA can (in theory) lower the liquidation threshold via governance. Rare in practice, but historic cases in DeFi exist.

When HF drops below 1, liquidators (specialised bots) see it on-chain and submit a Liquidate transaction. Whoever lands in the block first takes the penalty.

Liquidation penalty: the math

EVAA penalty is 5–10% (asset-dependent). Example:

You have:

• Collateral: 100 TON at $3 = $300
• Debt: 230 USDT

HF = (300 × 0.75) / 230 = 0.978 → liquidation.

The liquidator closes part of the debt — say, 100 USDT. They take equivalent value from your collateral: $100 (closed debt) + $10 (10% penalty) = $110 in TON. At $3 that’s 36.7 TON.

After liquidation:

• Collateral: 100 − 36.7 = 63.3 TON at $3 = $190
• Debt: 230 − 100 = 130 USDT

New HF = (190 × 0.75) / 130 = 1.10 → position survives, but you lost $10 penalty + 36.7 TON went to close debt you could have closed yourself for zero penalty.

EVAA usually doesn’t liquidate the whole position — just enough to push HF back above 1. That “partial liquidation” model is less brutal than “all or nothing”, but still expensive.

How not to get liquidated: 5 rules

Rule 1. Never open at 100% LTV

If LTV is 70%, don’t borrow even 65%. Starting HF at max LTV ≈ 1.07 (for TON collateral). A 7% price drop already triggers. Average daily TON volatility in 2024–2025 — 4–6%. One bad day takes you out.

Safe entry: 35–45% LTV. Starting HF ≈ 1.7–2.0.

Rule 2. Monitor at least daily

You don’t need to camp in the dashboard. Check EVAA in the morning, look at HF, get the picture. HF below 1.5 — act.

Rule 3. Keep an “emergency” USDT stash separate

A USDT reserve on a different wallet, not inside EVAA. Goal: ability to Repay fast if HF spirals. 20–30% of debt size is a sensible minimum.

Rule 4. Don’t loop near the max

Strategies like “TON leverage via recursive supply → borrow → supply” look elegant but are extremely fragile to drawdown. Every loop eats buffer. If you do leverage, cap at 2 loops, not 5.

Rule 5. Account for interest accrual

Debt grows on its own. Open at HF=1.4 and forget — six months later HF might be 1.2, a year later 1.1, and a single -5% TON candle is enough. Once a month, partial Repay out of accrued supply APR or external funds.

Walkthrough with real numbers

Suppose:

• Jan 1 — deposited 200 TON at $2.8 = $560 collateral.
• Borrowed 250 USDT at 11% borrow APR.
• Starting LTV: 250 / 560 = 44.6%. HF at 75% threshold = (560 × 0.75) / 250 = 1.68. Healthy.

Three months pass. TON falls to $2.2. Debt grew on interest: 250 × (1 + 0.11 × 0.25) ≈ 257 USDT.

• Collateral: 200 × $2.2 = $440
• Debt: $257
• HF = (440 × 0.75) / 257 = 1.28

Already uncomfortable. Options:

Option A. Repay 50 USDT (from the stash). Debt → 207. HF = 330 / 207 = 1.59. Calm.

Option B. Supply another 40 TON ($88). Collateral → $528. HF = (528 × 0.75) / 257 = 1.54. Also calm.

Option C. Do nothing. TON drops to $1.9.

• Collateral: 200 × $1.9 = $380
• Debt: $260 (another couple weeks of interest)
• HF = (380 × 0.75) / 260 = 1.10 — risk zone.

One more candle to $1.75:

• HF = (350 × 0.75) / 261 = 1.005 — next tick, liquidation.

Lesson: react before, not after. At HF 1.5 you should already be paying attention.

What to do RIGHT NOW if HF < 1.2

No panic, step by step:

1. Open EVAA, check the exact HF. Maybe price already bounced and the position is fine.
2. If really close to 1.0 — Repay part of the debt. Don’t try to close everything if you can’t — even partial Repay raises HF.
3. In parallel — if you have free TON in the wallet, Supply it. Faster to lift HF than selling TON and Repaying.
4. Don’t panic-close the position fully at market bottom. Lifting HF to 1.5 and waiting is usually the better tactic than dumping at the dip.

Bottom line

Health Factor is the thermostat of your EVAA position. HF ≥ 1.5 — sleep well. Below — set an alarm. Below 1.2 — act. Below 1.0 — too late. The single most important parameter to understand before your first borrow on any money market.

Next:

• EVAA for beginners: step-by-step deposit and borrow.
• Best DeFi strategies on TON 2026.
• MEV on TON: does it exist and how to defend — liquidators in DeFi are essentially MEV bots.