# Health Rate

The Health Rate is a key metric that indicates the safety of your borrowed position. It represents the relationship between your collateral and borrowed amount, weighted by the liquidation threshold.

### Understanding Health Rate

The Health Rate is calculated using the following formula:

```
Health Rate = (Total Collateral Value × Liquidation Threshold) / Total Borrow Value
```

Where:

* Total Collateral Value: Current market value of your deposited DYM
* Liquidation Threshold: 0.74 (representing the 135% minimum collateral ratio)
* Total Borrow Value: Amount of OUSD borrowed

### Risk Levels

* 🟢 Health Rate > 1.5: Safe zone, comfortable buffer against market volatility
* 🟡 Health Rate 1.1-1.5: Warning zone, monitor closely
* 🔴 Health Rate 1 < 1.1: Danger zone, repay some debt or add more collateral
* 🔴 Health Rate <= 1: Position eligible for liquidation

### Example

If you have:

* 1000 DYM as collateral (valued at $1000)
* 500 OUSD borrowed\
  Your Health Rate would be:

```
(1000 × 0.833) / 500 = 1.666 (🟢 Safe Zone)
```

### Best Practices

* Monitor your Health Rate regularly
* Maintain a Health Rate above 1.5 for safety
* Add collateral or repay the debt if the Health Rate drops
* Set up notifications for Health Rate changes


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