Terminology
Last updated
Last updated
The seller of collateral assets in exchange for who is required to repurchase those same tokens at a fixed date (the ) at a pre-determined . Economically equivalent to a borrower.
The buyer of collateral assets
The price at which collateral tokens are transferred by a borrower to a lender in a repo transaction and can be thought of as the amount borrowed in a repo agreement.
The price at which collateral tokens are to be transferred back to a borrower upon maturity or termination of a repo transaction. The difference between the repurchase price and the purchase price reflects the interest earned by the lender/owed by the borrower and is calculated by applying the pricing rate over the term of a repo transaction. The formula for determination of the repurchase price can be found in section.
The price differential is the difference between the and in a repo transaction and can be viewed as the interest earned by the lender/owed by the borrower over the term of a repo transaction.
The per annum percentage rate for determination of the repurchase price, also known as the "repo rate".
The purchase date is the date on which the purchased tokens are to be transferred by borrower to the lender.
The date on which the borrower is to repurchase the collateral tokens from lender.
A window of time beginning on the repurchase date and typically lasting 12 to 24 hours during which repurchase must occur.
The digital asset "sold" to the lender as part of a repo transaction that serves a collateral for a borrower's loan.
The rate at which all lenders to a term pool recover in the event that after all repurchases and liquidations are accounted for, there is insufficient purchase tokens to allow for 1:1 redmption of repo tokens.
The base digital currency in which the and repurchase price are de-nominated.
The ratio of the value of to the required to bid in a Term auction, quoted as a percentage rate. This is a function of the purchase price because the is not known until after all bids have been submitted and an auction has been cleared. The initial margin requirement is typically higher than the to maintain a buffer against liquidation.
The ratio of the value of to the required to avoid liquidation.
The market value with respect to any as of any point in time based on the price for such collateral tokens obtained via real-time Chainlink oracle feeds.
Transaction exposure measures the margin deficit or excess of an account. We apply the maintenance margin ratio to the current market value of collateral based on Chainlink oracle feeds and compare that to the repurchase price as shown . Where an account is in margin deficit (negative transaction exposure) its collateral is eligible for liquidation.
Where the of a borrower exceeds the multiplied by the owed by such borrower, the borrower is said to be in margin excess.
Where the of a borrower is less than the multiplied by the owed by such borrower, the borrower is said to be in margin deficit.
Liquidated damages are a surcharge to the amount of collateral seized in liquidations when valued at fair market value measured as a percentage rate. The surcharge is split between the portion that goes to the liquidator () and the portion that accrues to the protocol () such that:
The liquidation incentive is the portion of the that accrues to the liquidator.
The protocol seize share is the portion of the that accrues to the protocol.