Each asset gets its own factor, reflecting its volatility and market depth. Stablecoins might carry 0.85 or higher, blue-chip assets 0.7 to 0.8, and small or illiquid tokens 0.3 or nothing at all. Some protocols also cap how much of an asset the market will accept in total.
Borrowing to the limit means liquidation on the first adverse tick, so the factor is a ceiling rather than a target. Working well inside it is the difference between a position that survives a routine 20% drawdown and one that does not.
Factors change. Governance can and does lower them when an asset becomes riskier, which mechanically pushes existing borrowers towards liquidation without them trading at all. Watching governance forums for parameter proposals is part of managing an on-chain leveraged position.
Related: health-factor, lending-protocol, on-chain-liquidation, governance-proposal