An overview of Entropy's Health Overview System
NOTE: For now, Entropy will only allow USDC deposits as collateral.
Open orders subtract from the amount of collateral available. It currently uses the Oracle price to determine how much collateral to subtract, which will be changed in later versions.
Collateral, borrows and perp position values are summed up to give the Health metric
- Each asset is weighted differently
- Health is used to determine liquidations and new position eligibility
The health of an account is used to determine if one can open a new position or if one can be liquidated. There are two types of health, initial health used for opening new positions and maintenance health used for liquidations. They are both calculated as a weighted sum of the assets minus the liabilities but the maintenance health uses slightly larger weights for assets and slightly smaller weights for the liabilities. Zero is used as the bright line for both i.e. if your init health falls below zero, you cannot open new positions and if your maintenance health falls below zero you will be liquidated. They are calculated as follows:
If the health calculation is for determining liquidations, liability weight and asset weight will use the maintenance version. The quote currency, in the typical case USD, will always have all weights and prices equal to 1.