# Auction

The health factor is the numeric representation of the safety of your deposited NFT against the borrowed APT and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario.

If the health factor reaches 1, the liquidation of your deposits can be triggered. A Health Factor below 1 may get liquidated. For a HF=2, the collateral value vs borrow can reduce by 1 out of 2: 50%.

**Health Factor = (Floor Price \* Liquidation Threshold) / Debt with Interests.**

* 0.0 < HF < 1.0: Dangerous, borrower maybe lose collateral if the debt is not repaid timely.
* 1.0 <= HF <= 1.5: Risky, borrower should repay partly the debt timely.
* 1.5 < HF < 2.0: Careful, borrower should pay attention and monitor the debt timely.
* 2.0 <= HF: Safe, borrower no need to worry and keep the debt last.

When a user's Health Factor drops below **1**, the platform allows them to auction selected NFTs from their collateral list. If **24-hour protection** is set up, NFTs won’t be auctioned immediately, giving the user time to restore their Health Factor. During this period, NFTs are auctioned by priority set by the user. Bidders win NFTs by paying off the borrower’s debt, keeping the system balanced.

* Anyone can take part in an auction.
* The bid must be: no less than the starting price and higher than the previous bid plus 1% debt.
* The first bidder will receive at least 2APT paid by the borrower as the penalty if the borrower repays within 24 hours.
* The highest bidder will get the collateral if the borrower doesn't repay the loan.
* The bidder needs to deposit APT to bid.
* The deposited APT will automatically be refunded in wAPT when his/her bid is not the highest bid.

<figure><img src="https://1634799064-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F5gbxkPKqWPOG1I1ojAfb%2Fuploads%2FRKXQnZXq9UoxymYIb4Gq%2FScreenshot%202024-09-26%20at%2021.53.01.png?alt=media&#x26;token=45863478-0679-4fd4-9962-6558589b61ef" alt=""><figcaption></figcaption></figure>