DeFi Liquidation Calculator
Find out exactly at what price your DeFi lending position gets liquidated. Enter your collateral, debt, and protocol, and this calculator instantly shows your health factor, liquidation price, safe margin, and how much more you can borrow. The interactive chart visualizes your entire risk profile so you can see how close you are to the danger zone. Works with Aave V3, Compound V3, MakerDAO, Spark, and Morpho.
Position Calculator
Select your protocol and enter your collateral and debt details below. All outputs update instantly as you change any input.
Liquidation Zone Visualization
Safe Zone Warning Zone Danger Zone Liquidation Zone
Monitor Your Positions in Real-Time
Track health factors across all your lending positions in one dashboard. Get alerts before liquidation hits.
Set Up Liquidation Alerts
Never get caught off guard. Automated tools can warn you and even auto-repay your loan to prevent liquidation.
How DeFi Liquidation Works
Liquidation is the enforcement mechanism that keeps DeFi lending protocols solvent. Here is the step-by-step process from deposit to potential liquidation:
Health Factor Explained
The health factor is the single most important number in any DeFi lending position. It tells you how safe your position is and how far you are from liquidation.
For example: if you deposit 10 ETH at $2,500 each ($25,000 total) on Aave V3 with an 82.5% liquidation threshold, and borrow $12,000 in DAI:
A health factor of 1.72 means your collateral could lose about 42% of its value before you reach the liquidation threshold. Here is what different health factor ranges mean in practice:
| Health Factor | Risk Level | Recommendation |
|---|---|---|
| > 2.0 | Low risk | Comfortable buffer. Position can withstand significant price drops. |
| 1.5 – 2.0 | Moderate risk | Reasonable for less volatile assets. Monitor during high-volatility periods. |
| 1.0 – 1.5 | High risk | Dangerously close. Add collateral or repay some debt immediately. |
| < 1.0 | Liquidation | Your position can be liquidated. Bots will execute liquidation within minutes. |
Liquidation Penalty: What Happens to Your Collateral
When a position is liquidated, the borrower does not just lose collateral equal to their debt - they lose an additional percentage called the liquidation penalty (sometimes called the liquidation bonus from the liquidator's perspective).
The penalty exists to incentivize third-party liquidators to act quickly. Without it, nobody would spend gas to liquidate underwater positions, and the protocol would accumulate bad debt. The penalty varies significantly by protocol and by asset:
| Protocol | Asset | Penalty | Notes |
|---|---|---|---|
| Aave V3 | ETH | 5.0% | Up to 50% of debt liquidated per transaction |
| Aave V3 | wBTC | 6.5% | Higher penalty due to lower liquidity |
| Aave V3 | stETH | 5.0% | Liquid staking derivative, treated similarly to ETH |
| Compound V3 | ETH | 5.0% | Absorbed by protocol reserves first |
| MakerDAO | ETH-A | 13.0% | Dutch auction system, penalty can be lower if auction is competitive |
| Spark | ETH | 5.0% | Forked from Aave V3, same mechanics |
| Morpho | Varies | 5–15% | Depends on vault configuration and underlying market |
Concrete example: You have 10 ETH ($25,000) as collateral on Aave V3 and borrowed $15,000 in DAI. ETH price drops and your health factor hits 0.95. A liquidator repays $7,500 of your debt (50% maximum) and receives $7,875 worth of your ETH (the $7,500 debt plus the 5% penalty). After liquidation, you have roughly 6.85 ETH remaining in the protocol and $7,500 in outstanding debt - plus you still hold the original $15,000 in DAI you borrowed.
Tips to Avoid Liquidation
Keep a High Health Factor
Target a health factor of at least 2.0 for volatile assets like ETH and wBTC. This gives you a 50%+ price drop buffer. For stablecoin-collateralized positions, 1.5 is often sufficient since price deviation is typically small.
Set Up Automated Alerts
Use tools like DeFi Saver, Tenderly Alerts, or HAL Notify to get email or Telegram notifications when your health factor drops below a threshold you set (e.g., 1.5).
Use Auto-Repay / Auto-Boost
DeFi Saver offers automated strategies that automatically repay your debt (by selling collateral) when your health factor drops too low, or boost your position when it is too high.
Keep Reserve Capital
Always have stablecoins or ETH in your wallet ready to either add as additional collateral or repay part of your debt. Do not deploy 100% of your capital into a single leveraged position.
Use This Calculator Regularly
Simulate worst-case scenarios before entering a position. Ask yourself: "What happens if ETH drops 30% overnight?" If your health factor would fall below 1.2, you are taking on too much risk.
Consider Stablecoin Strategies
If you want leverage with minimal liquidation risk, consider borrowing stablecoins against stablecoin collateral. The liquidation price is extremely far from current price, though yields are also lower.
Protect Your Positions
The best time to set up liquidation protection is before you need it. These tools help you monitor and automate your DeFi lending strategy.
Learn more: Aave Overview · Compound Overview · MakerDAO Overview
Top Lending Protocols to Supply Collateral
After modeling your position above, open your chosen protocol and supply collateral to start. All links go directly to the app.
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