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# Glossary

A list of words and terms relating to the Angle Borrowing Module
Term
Description
Collateral Ratio (CR)
The collateral ratio is a ratio that determines the value of the tokens deposited as collateral compared to the value of the outstanding debt. It is expressed as CR = collateral value / debt value, or 150% for example.
Loan-to-value (LTV)
The loan to value is the maximum amount of stablecoins debt compared with the collateral deposited in the vault. For example, if wETH's LTV is at 80%, a user depositing 1,000 € worth of wETH can borrow up to 800 agEUR.
Collateral Factor (CF)
This is a parameter that gives the minimum collateral ratio possible for each vault type. If the collateral ratio of a vault goes below this value, the vault can get liquidated. The collateral factor is expressed as a fraction. For example, if CF = 2/3, the minimum collateral ratio possible for a position would be minCR = 1 ÷ 2/3 = 3/2 = 150%.
Health Factor (HF)
The Health Factor is what defines the "health" of a vault. If HF goes below 1, the vault can get liquidated. HF = CR x CF. For example, if a vault has a CR of 170% for a CF of 2/3 (minCR of 150%), the Health Factor is at HF = 1.70 x 2/3 = 1.13.13
Target Health Factor
The target health factor is the target that determines how much of a vault debt needs to be repaid by a liquidator.
Liquidation
A liquidation happens when a vault health factor goes below 1. In this case, users that opened the vault keep their stablecoins but lose part or all of their collateral. More in the liquidation section.
Stability Fee
An interest rate paid by agTokens minters for their loans. It is controlled by governance.
Dust
Dust is the minimum amount of agTokens that can be borrowed from a single vault. This is required to avoid having too small and unealthy debt positions sticking around. There is another parameter called the `dustLiquidation` parameter which refers to the minimum amount of debt below which if a position gets liquidated, it will have its debt fully repaid (rather than only a portion of it).
`VaultManager` contract
A `VaultManager` contract is a contract that manages all vaults for a specific collateral type with the same parameters (collateral factor, dust amount, fees, ...).