Introduction

Jargons

Term	Definition
Arbitrage	The act of achieving a riskless profit
Asset level	An attribute that applies only to a specific asset
Borrow capacity	The maximum amount a user can borrow
Borrow factor	The percentage of the collateral dollar value (after taking into account loan-to-value) that a user can borrow for a specific asset (see the previous paragraphs for examples)
Borrowing capacity	The maximum dollar value of the debt a user can borrow
Close factor	The percentage of debt a liquidator can repay when the liquidation threshold is breached
Collateral	An asset used as a guarantee against insolvency to borrow another one
Collateral amount	The number of tokens posted as collateral
Collateral factor	A haircut percentage on the collateral value
Collateral price	The price in protocol's base currency of the tokens posted as collateral
Collateralization ratio	The reciprocal of the loan-to-value
Debt / Liability	Amount owed to another, need to be repaid
Debt amount	The number of borrowed tokens
Debt factor	The price in base currency of the borrowed tokens
Debt price	A markup factor on the debt value
Flash loan	A loan taken and repaid in one block
General Protocol Fee	The percentage of borrowing fee going to the protocol reserve account
Health factor	The ratio between an account's total Risk-Adjusted Collateral and Risk-Adjusted Debt
Health Factor Liquidation Threshold	The Health Factor that triggers a liquidation
Interest rate curve	A function that tells what interest rate a user receives/pay depending on how much debt has been taken on that asset
Isolated markets	A market where deposits and debts don’t affect other pool’s users
Leverage	A method through which a user manages more money that what initially committed by taking debt
Liability	A debt
Liquidation	The act of repaying a borrower’s debt and collect a portion of his collateral
Liquidation Liquidators Fee	The portion of collateral the liquidator is entitled to receive when repaying an unhealthy borrower’s debt
Liquidation Liquidator Fee Beta	Liquidation Liquidator Fee's risk factor/multiplier
Liquidation Liquidator Fee Max	The maximum Liquidation Liquidator Fee
Liquidation Protocol Fee	The portion of collateral the protocol is entitled to receive when repaying an unhealthy borrower’s debt
Liquidation Total Fee	Liquidation Protocol Fee + Liquidation Liquidator Fee
Loan-to-value	The percentage of the collateral dollar value that can be borrowed
Multi-accounts	Additional accounts are available for users to originate isolated or shared positions. Multi-accounts are controlled by the same private keys as the main account
Oracle	The party in charge of providing real-time prices of assets sourced from different exchanges
Protocol Reserves	An account where depositors and liquidator transfer a portion of their funds for them to serve as prudential capital
Risk-Adjusted Collateral	Collateral amount * Collateral price * Collateral factor
Risk-Adjusted Debt	Debt amount * Debt price / Debt factor
Shared markets	A market where deposits and debts are distributed across all users
Target Health Factor	The maximum health factor reachable after a liquidation
Tokenized debt	A token that represents the debt a user owes to the protocol
Tokenized deposit	A token that represents the credit a user owns

Stakeholders

Name	What do they do?
Depositors / Lenders	They deposit funds that become available to be borrowed
Borrowers	They borrow funds made available from lenders
Liquidators	They repay borrowers’ debt and retain a portion of their collateral
Token holders	They hold the native token to extract utility from it