Account Health measures an account’s proximity to a Liquidation.
An account can be liquidated when it reaches an account health below 1.0. When an account becomes unhealthy, debts are repaid by liquidators and collateral is taken until the account reaches its Target Liquidation Health. Accounts with collateral that do not meet the Partial Liquidation Threshold may be entirely liquidated. To improve account health, a borrower can repay debt or add collateral.
An account that uses multiple assets as Collateral is a Cross Margin account. Using a mix of collateral assets can help limit the impact of price volatility on one asset that could cause a liquidation event.
An account that uses one asset as collateral is an Isolated Margin account. Using only one asset as collateral can be useful for borrowers looking to maximise exposure to one asset in that account.