📚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 EURA. |
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 stablecoin minters for their loans. It is controlled by governance. |
Dust | Dust is the minimum amount of stablecoins 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 |
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