Learn how to monitor, manage, and master your on-chain risk.
In traditional finance, you rarely see your risk until it's too late. Your credit line gets reduced, your margin account is liquidated, or your lender changes the terms without warning.
On-chain lending is different.
With DorkFi, every borrower's position is transparent and measurable in real time — defined by one simple metric called the Health Factor.
The Health Factor (HF) is your position's safety score. It tells you, at a glance, how close your loan is to being liquidated. And unlike a credit score, it doesn't rely on history, identity, or reputation. It's pure math — objective, auditable, and under your control.
Understanding the Health Factor
The Health Factor is calculated as:
HF = (Collateral × Liquidation Threshold) / Borrow Value
It represents how much cushion your collateral provides relative to your current debt.
- HF > 1 — your position is healthy and safe.
- HF < 1 — your position is undercollateralized and can be liquidated.
As market prices fluctuate, so does your Health Factor. When the value of your collateral falls or your borrow balance increases, your HF drops. When you add more collateral or repay part of your loan, your HF rises again.
This dynamic is what keeps DorkFi solvent and self-balancing — every user's position continuously adjusts to real market conditions.
Managing Your Risk in Real Time
The DorkFi interface tracks your Health Factor across all markets and positions in real time.
At any moment, you can see:
- Your total collateral value
- Your total borrowed value
- Your current HF and how it changes with market movement
If your HF starts to fall, you have clear options:
- Add more collateral to strengthen your position
- Repay part of your loan to reduce exposure
There's no waiting for a notification or surprise margin call. You see the numbers live, and you act before the protocol ever needs to.
The Role of Liquidators
When a position's Health Factor drops below 1, it becomes eligible for liquidation — a process that protects the protocol's solvency and keeps markets fair for everyone.
Liquidators are participants who repay part of a borrower's debt in exchange for a discounted portion of their collateral. This mechanism ensures that even when prices move sharply, the system remains stable.
But with DorkFi, liquidation isn't hidden behind bots or institutional actors — it's open to anyone. Community liquidators can monitor HF data and help maintain protocol health while earning fair rewards for doing so.
This open liquidation design transforms risk into a shared responsibility — where incentives align between borrowers, lenders, and maintainers of the ecosystem.
Transparency Without Fear
In DorkFi, risk is transparent — not hidden in fine print.
Every number is on-chain. Every position is visible. Every risk factor is measurable.
By giving users real-time control of their Health Factor, DorkFi replaces uncertainty with clarity and empowers everyone — from casual borrowers to professional traders — to make informed decisions.
That's what decentralized lending should feel like: open, predictable, and fair.
Key Takeaway
Your Health Factor is your safety gauge. Keep it above 1, and your assets work for you. Let it fall below 1, and the protocol automatically rebalances the system.
In DorkFi, you're not just borrowing — you're managing risk with precision and full visibility. Read more about this topic in our docs section.
You see your health factor live, and you control your safety.
Join the community: 🐋 Visit app.dork.fi to prepare your wallet and explore supported assets. 🐋 Follow @Dork_Fi for updates and and get involved. 🐋 Join our Discord to join the conversation and learn more.