Aave Liquidations Explained: Bonus, Process & Penalty

When your health factor falls below 1.0, your Aave position becomes liquidatable. Here is exactly what happens and what it costs.

When liquidation triggers

Anyone can liquidate a position once its health factor drops below 1.0. There is no grace period — it can happen in the same block the threshold is crossed.

The liquidation bonus

A liquidator repays part of your debt and takes your collateral plus a bonus (typically 5–15%, set per asset by governance). That bonus is your loss.

Partial vs full liquidation

Usually up to 50% of the debt is repaid per liquidation (the close factor). If the health factor is very low (below ~0.95), up to 100% can be liquidated at once.

How to avoid it

Keep a buffer above 1.5, watch your collateral prices, and act early. The fastest fix during a crash is repaying debt.

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