DeFi Liquidation Calculator: At what price do you get liquidated on Aave?

If you borrow on Aave, Compound, or any DeFi lending protocol using ETH, BTC, or stETH as collateral, there is a price below which your position will be automatically liquidated. A liquidator will buy your collateral at a discount (5-10%) to repay your debt, and you lose that discount. This interactive calculator shows you exactly at what price you will be liquidated, what your safety margin is, and how much you can borrow without extreme risk. Data based on official Aave V3 and Compound V3 parameters, updated as of May 2026.

What is liquidation in DeFi?

When you borrow from a decentralized protocol like Aave or Compound, you deposit collateral that is worth more than the loan. This difference is called over-collateralization. For example: you deposit 10 ETH at $4,000 (value $40,000) and borrow 20,000 USDC. Your ratio is 50% — very safe.

But if ETH's price drops, the ratio changes. Each protocol has a liquidation threshold (typically 80-85% for ETH on Aave V3). When the value of your collateral multiplied by that threshold falls below your debt, anyone can liquidate your position. The liquidator pays part of your debt and keeps your collateral at a discount (the "liquidation penalty," usually 5-10%). Result: you lose that discount + gas fees + closed position.

Interactive Liquidation Simulator

Configure your position and move the sliders to see how the risk changes. The green-yellow-red bar shows your health factor: above 1.5 is safe, between 1.0 and 1.5 is the risk zone, below 1.0 means you're liquidated.

What exactly happens when you are liquidated?

The process is automated and takes a few seconds. Any liquidator (usually a bot) detects your position with a health factor below 1. It calls a function in the protocol's contract that repays part of your debt with its own USDC and takes an equivalent proportion of your collateral + a 5-10% penalty.

• Direct loss: the liquidation penalty. If you are liquidated with $40,000 of collateral and a 5% penalty, you lose $2,000.
• Indirect loss: your position is closed at the worst time (low price). If the price rebounds afterward, you miss out on the recovery.
• Not always fully liquidated: Aave V3 liquidates up to 50% of your position ("close factor" mode). On Compound, it can be 100%.
• Gas: on chains like Ethereum L1, a liquidation costs $100-500 in gas (covered by the liquidator, but comes out of your collateral).

How much has been liquidated historically?

Data from the last 36 months according to DefiLlama and official dashboards:

87% of historical liquidations occurred in positions with an initial health factor between 1.0 and 1.3 — users who pushed the margin too far. Positions with a health factor > 2.0 at the start are rarely liquidated (less than 1% historically, and only in black swan events).

How to avoid liquidation?

• Maintain a health factor > 2.0: this provides a buffer for 30-40% price drops before entering the risk zone.
• Use low-volatility collateral: stETH (1:1 with ETH) or stablecoins are safer than volatile assets like SOL or memecoins.
• Set up alerts: tools like DeFi Saver, Instadapp, or CleanSky's monitor will notify you when your health factor drops.
• Diversify across protocols: Aave, Compound, and Morpho have different thresholds. A fragmented position liquidates in a cascade rather than all at once.
• Automated repayment: use DeFi Saver's "automation" to automatically sell part of your collateral and repay debt when your health factor drops below a certain level.

Exact Formulas

Related Guides