A list of words and terms relating to the Angle Borrowing Module
Here, you will find a list of the terms and expressions that are used in this module.
If you still have some questions, do not hesitate to reach out on the Angle Discord 📐.
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.
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.
A liquidation happens when a vault health factor goes below 1. In this case, users that opened the vault will keep their stablecoins but will 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 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.
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, ...). Angle Borrowing module is expected to have multiple VaultManager for different collaterals.
Reactor mode
It is a type of utilisation of Angle Borrowing module, designed for risky collateral assets, where the borrowed agTokens are not controlled by borrowers, but rather by the protocol which invests the stablecoins in yield strategies, sharing the yield with depositors.
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