User Positions
Learn how to manage user positions on Aave v4.
A User Position represents the complete financial state of a user within a specific Spoke, tracking User Supplies and User Borrows alongside key risk metrics such as Health Factor and Risk Premium.
Unlike v3, where user positions were per-market, v4 positions are per-Spoke, allowing users to manage different strategies and risk profiles independently.
In the Aave Protocol, a User Account—often referred to simply as a User—is a single Ethereum address that has interacted with the protocol, either as an Externally Owned Account (EOA) or a smart contract.
User Supplies
User Supplies represent assets that a user has deposited into a spoke's Reserve. Each supply position:
Accrues yield automatically through share-based accounting that appreciates over time
May be enabled as collateral (if the reserve supports it) to provide borrowing power based on the asset's Loan-to-Value (LTV) ratio
Affects the Risk Premium when enabled as collateral — riskier collateral assets increase the overall risk profile of the position
Can be withdrawn at any time, provided the position's Health Factor remains above 1.0
The above applies to standard Hub and Spoke behavior. Tailored implementations may vary.
User Borrows
User Borrows represent assets that a user has borrowed from a spoke's Reserve. Each borrow position:
Accumulates interest based on the asset's borrow rate, increasing debt over time
Requires collateral backing according to liquidation thresholds specific to each borrowed asset
Impacts the Health Factor as part of the total debt value
Can be repaid partially or fully at any time to reduce debt and free up collateral
The above applies to standard Hub and Spoke behavior. Tailored implementations may vary.
Health Factor
The Health Factor is the core safety metric that determines a user position's liquidation risk. It measures the stability of a user position:
Health Factor = Total Collateral Value * Weighted Average Collateral Factor ─────────────────────────────────────────────────────────── Total Borrow ValueThe health factor value determines the position's safety status:
Above 1.0: The position is safe from liquidation
Below 1.0: The position becomes eligible for liquidation — liquidators repay only enough debt to restore the position to a healthy state
Changes dynamically as asset prices fluctuate and interest accrues on both supplies and borrows
Can be improved by supplying more collateral or repaying part of the borrowed amount
Determines available actions — new borrows or collateral withdrawals are blocked if they would reduce the Health Factor below 1.0
Example:
If a user supplies $10,000 in ETH as collateral with an 80% Collateral Factor and borrows $6,000 in GHO, the health factor would be 1.333.
User Risk Premium represents the additional interest charge applied to borrowing based on the quality of a user’s collateral. It determines how much extra a user pays on top of the base borrow rate for any borrowed asset within a Spoke.
Based on Collateral Risk — a percentage value from 0% (highest quality) to 1000% (maximum risk) that reflects how risky an asset is when used as collateral
Weighted by collateral amounts — calculated using only the collateral needed to cover total debt, starting with the safest assets
Updated dynamically — recalculated when users withdraw, borrow, or through ad-hoc refresh.
Lower is better — users with safer collateral pay lower interest rates
For example, a 0% User Risk Premium means paying only the base rate, while 50% means paying 50% more (7.5% total if base rate is 5%).
Cross-Spoke Strategies
v4’s modular design enables sophisticated position management across multiple Spokes.
Spoke Isolation
Each Spoke maintains independent risk parameters and liquidation logic. This means:
Positions in different Spokes do not affect each other’s Health Factors
A user can hold conservative positions in one Spoke and aggressive positions in another
Multi-Hub Access
Advanced Spokes can access multiple Hubs, enabling strategies such as:
Collateralizing assets from one Hub to borrow from another
Accessing different yield opportunities across Hub configurations
Optimizing liquidity and rates across the entire protocol