Solve for the boundary price
For collateral units Q, price P, liquidation threshold T, and debt D, health factor is Q × P × T ÷ D. Setting that ratio to 1 gives liquidation price D ÷ (Q × T). Units and threshold must be positive. The current price helps calculate the present ratio and distance to the modeled boundary; it does not change the boundary when debt, quantity, and threshold remain fixed.
Work through a single-asset example
In a hypothetical position, 5 collateral tokens secure $6,000 of debt with an 80% liquidation threshold. The boundary is $6,000 ÷ (5 × 0.80), or $1,500 per token. At a current token price of $2,000, health factor is 1.3333. The price decline to the boundary is 25% of the current price. A 25% decline describes this scenario's remaining price distance, not a probability of liquidation.
Know when the estimate stops fitting
The single-asset model cannot represent several collateral assets moving independently. It also holds debt valuation and the liquidation threshold constant, excluding accrued borrowing interest, debt-token price changes, and parameter updates. Zero debt means there is no positive liquidation boundary from borrowing. Protocol oracles may differ from an exchange quote. Use consistent units throughout and reconsider the estimate whenever collateral quantity changes through withdrawals, deposits, or other account activity.