Before borrowing on Aave V3, select the exact network and market, verify that your supplied asset is enabled as collateral, and check that reserve’s current oracle valuation, loan-to-value (LTV), and liquidation threshold. Then review your account’s available borrow and health factor. Those values are market- and asset-specific, can change, and should not be copied from another chain or an older guide.
Check the exact Aave V3 market first
Aave V3 runs across different networks and markets. Reserve risk settings are not universal: Aave says they vary between markets and can change over time as governance responds to market conditions. Start by confirming the network selected in your wallet and the corresponding Aave V3 market in the app or data query. Make sure the displayed reserve is the asset you actually supplied. Aave’s reserve documentation explains that settings are market-specific and subject to change.
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Verify that the asset is usable as collateral
Two separate checks matter: whether a reserve is eligible to serve as collateral, and whether your own position currently has it enabled. A reserve may be capable of collateral use while your account has not enabled it; governance can also disable a reserve for new collateral use. Aave’s market operations documentation distinguishes the reserve’s canBeCollateral status from an account’s isCollateral status. Review the market operations reference for these concepts.
Check the collateral price Aave uses
A standalone exchange ticker is not a substitute for the valuation used by Aave’s market. For technical users, Aave’s getCollateralFullInfo account-data reference describes a result containing the asset unit, current price from the Price Oracle, raw balance, and balance converted into the market’s base currency. The converted value is useful for understanding how much the supplied collateral contributes to the account calculation. See Aave’s view-contract reference.
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Prices are inputs that can move. A change in oracle-valued collateral, appreciation of borrowed assets, or interest accruing on debt can reduce the health factor. Aave’s overview explains the role of oracle prices in account health. Read Aave’s oracle documentation.
Read LTV and liquidation threshold separately
LTV sets the borrowing limit against collateral; the liquidation threshold is the point at which the position becomes at risk of liquidation as debt grows relative to liquidation-adjusted collateral value. The gap between them is a safety margin, not a reason to borrow up to the liquidation threshold. Check both values for the exact reserve and market when making the decision. Aave’s parameter reference describes these reserve settings.
Also check whether borrowing is enabled, whether relevant borrow caps apply, and whether an Efficiency Mode (E-Mode) category is applicable to the particular collateral-and-debt combination. E-Mode settings can affect the parameters that apply, so do not assume a value for one asset pair carries over to another. Consult the market’s live details and the applicable reserve risk documentation.
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Use the account-level health factor and available borrow
Reserve-level numbers alone do not describe the risk of an account holding multiple collateral and debt assets. Aave’s account views report total collateral, total debt, available borrowing, current liquidation threshold, LTV, and health factor in the market’s base currency. Use the live account-level result before submitting a borrow rather than estimating from one collateral asset. Aave’s view-contract reference documents account data.
Aave defines the calculation as:
Health factor = (total collateral value × weighted average liquidation threshold) ÷ total borrow value
With multiple collateral assets, the liquidation threshold is weighted by collateral value; it is not a simple arithmetic average. Aave’s risk documentation describes the weighted calculation and expresses health factor as liquidation-adjusted collateral value divided by debt value. See the risk-parameter documentation.
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Aave’s help-center illustration uses $10,000 of ETH collateral at an 80% liquidation threshold and a $6,000 GHO borrow, yielding a health factor of 1.333. This is an example, not a recommended target or a statement about current ETH or GHO settings. Aave’s health factor and liquidations page provides the illustration.
Consider what could lower the health factor
Before borrowing, consider adverse moves in both sides of the account: collateral prices can fall, debt-asset prices can rise relative to the market’s base currency, and interest can accrue. Aave’s help page describes these effects and identifies DeFi Simulator as a way to simulate health-factor changes. A simulation is an estimate, not a guarantee of future account health. The same help page uses the task labels “Simulate health factor changes” and “Auto-repay borrow position.” See Aave’s help page.
There is no universally safe health-factor target: Aave says an appropriate level depends on asset volatility and correlation. A value only slightly above 1 leaves little room for an adverse price move or additional interest before the position is at risk. Aave explains this qualification in its liquidation guidance.
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Understand the liquidation figures in Aave’s help content
Aave’s help page currently describes the following liquidation mechanics. These are implementation details stated in that help content, not a universal rule for every deployment; confirm the applicable deployment and current documentation for the market you use.
| Health factor and account conditions | Liquidation described by Aave’s help page |
|---|---|
| Health factor above 0.95, with both collateral and debt at least $2,000 | A liquidator may repay up to 50% of total debt. |
| Health factor at or below 0.95, or collateral or debt below $2,000 | Up to 100% may be liquidated. |
| Partial liquidation would leave less than $1,000 of either collateral or debt | The position must be fully cleared rather than partially liquidated. |
The $2,000 and $1,000 cutoffs and the repayment percentages above are operational thresholds stated on Aave’s help page; they are not market statistics. Check Aave’s current liquidation guidance for the applicable context.
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Quick Recap
Pre-borrow checklist
- Confirm network and market. Match the wallet network and selected Aave V3 market to the reserve you intend to use.
- Confirm collateral status. Check that the reserve can be collateral and that your account has the supplied asset enabled as collateral.
- Check the oracle valuation. Review the current Aave price and value in the market’s base currency, not just an external ticker.
- Inspect applicable parameters. Read LTV, liquidation threshold, borrowing status, caps, and any relevant E-Mode settings for this market and asset pair.
- Review your account. Check live total collateral, total debt, available borrow, current liquidation threshold, and health factor.
- Consider adverse changes. Account for collateral declines, debt-asset appreciation, and accruing interest; use a suitable simulator if helpful, without treating its output as a guarantee.
- Choose borrowing room conservatively. Do not treat the liquidation threshold or a health factor barely above 1 as a target.
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