Health Factor&Asset Credit

HF(Health factor) = Total collateral credit / Consumed credit

A CDP is liquidated when its health factor <= 1, make sure your CDP's health factor remains above 1 to avoid liquidation

Total collateral credit = Σcollateral value * collateral credit

Consumed credit = debt value * debt credit

Collateral credit and Debt credit

OT uses 'Collateral credit' to express amount of credits gained from collateralizing an asset

Debt credit refers to amount of credits consumed per $1 worth of token borrowed

Click here to the more detailed table

Asset	Debt Credit	Collateral Credit
WBTC	1.12	0.88
WETH	1.12	0.88
ETH	1.12	0.88
BNB	1.18	0.82
DAI	1.1	0.9
BUSD	1.05	0.95
USDC	1.05	0.95
USDT	1.05	0.95
OSD	1.1	0.9

Example: Alice borrows ETH using BTC as collateral, WBTC price = $40,000, ETH price = $2,000. Alice deposits 10 BTC, which has a total collateral credit of

Total collateral credit = 40000 * 10 * 0.88 = $352,000

Assuming health factor = 1

Maximum debt value = $352,000 / 1.12 = $314,285.71(equal to 157.1428 ETH).

Alice's initial CDP HF would be: $352,000/$314,285.71 = 1.12, in case of BTC price drops or ETH price spikes, causing HF dropping below 1, the CDP will be liquidated, Alice might need to reduce debt position or add extra collateral to increase HF to avoid liquidation.