Definition underlying: base asset of a interest-bearing token interest-bearing token: IOU like cDAI, eUSDC $x$: Underlying reserve in Pool $y$: Zero-coupon bond reserve in Pool Previous Work Constant reserve: $V_{rsv}(x, y) = x + y$ , the sum value function. Constant product: $V_{prod}(x, y) = \sqrt{xy}$, the product value function.

Table of Contents [TOC] How to caluculate Euler health score To avoid to be liquidated, keep $HealthScore$ greater than 1.0 . Generally $HealthScore$ is denoted as $$ HealthScore = {RiskAdjustedCollateral \over RiskAdjustedLilability} $$

Health score To avoid to be liquidated, keep $HealthScore$ greater than 1.0 . Generally $HealthScore$ is denoted as $$ HealthScore = {RiskAdjustedCollateral \over RiskAdjustedLiability} $$ Evaluate risk-adjusted collateral Here assume a user deposit a single asset and leverage its position.