This documentation is a work in progress!

Automated Market Maker — Smart contract that allows accounts to provide liquidity which enables anyone to swap between these tokens using a constant function formula.

AMM — Shorthand for Automated Market Maker.

AMM Oracle — On-chain oracle that gets the price information from an AMM liquidity pool, almost always returning a TWAP instead of the exact price.

Arbitrage — Act of making a simultaneously buying and selling an asset on different markets with different prices.

Approval — Giving another address the permission to transfer tokens on your behalf.

Borrower Account that creates a collateralized debt position (CDP) by depositing collateral and borrowing synthetic assets from the protocol.

Borrow Capacity Collateral value available (for user) to borrow kresko assets before reaching the MCR.

Burn Destruction of existing tokens, decreases the circulating supply.

Close Fee Primary percentage fee taken by the protocol on repayment of debt. Must be within 0-10%. Assigned separately for each Kresko Asset.

cFactor — Shorthand for Collateral Factor

cValue — Collateral value adjusted by the cFactor.

Collateral Something of value provided as a guarantee of debt repayment.

Collateral Asset Assets that can be deposited into the protocol as collateral for minting Kresko Assets.

Collateral Deposits — All Collateral Assets of an account deposited into the Kresko protocol.

Collateral Factor Multiplier used for risk adjusted valuation of collateral assets.

Collateralized Debt Position — Position where user locks collateral to be able to generate debt against it.

Collateral Ratio Ratio of collateral value to debt.

Deposit The act of transferring ERC-20 tokens into the Kresko protocol to gain collateral value.

Delta Neutral Position Multiple positions with balancing positive and negative deltas so the overall delta is zero, resulting in unchanged combined value by regular price movement.

Diamond Smart contract proxy pattern that uses multiple scoped implementation contracts.

Diamond Cut Core function in a diamond proxy pattern that performs addition, replacement and removal of facets inside a diamond proxy.

Diamond Storage Smart contract storage pattern that uses a randomized position for storage to live inside a contract to avoid clashing while allowing scoping and upgradeability.

Facet Smart contract used by a diamond proxy that exposes the actual functions for end-user consumption.

Fee Recipient Address where all protocol fees are sent.

Health Factor — Collateralization Ratio converted into percentage.

Helper Contract — Smart contract that usually performs multi-transaction flows in a single transaction on behalf of the user.

krFactor — Multiplier used for risk adjusted valuation of Kresko Assets.

kValue — Debt value adjusted by the krFactor.

Kresko Asset Synthetic asset that can be minted from the Kresko protocol.

krAsset Shorthand for Kresko Asset

KISS Primary stable value asset that can be minted and deposited within the Kresko Protocol.

Leverage — Act of borrowing to make more investments.

Long Position Buying an asset with the expectation it will appreciate in value.

Liquidaton Forced repayment of a unhealthy debt position to increase it's collateral ratio.

Liquidity Pool Smart contract within an AMM that holds tokens in equal value to facilitate exchange (swaps) while rewarding the liquidity providers from these swaps.

Liquidity Provider Account that provides assets into a liquidity pool in an AMM enabling other accounts to swap between them.

Liquidator Any account that liquidates CDPs which are considered unhealthy since their collateral ratio is under the liquidation threshold in the protocol.

Liquidatee An account that is liquidated.

Liquidaton Incentive Multiplier A percentage multiplier that allows liquidators seize additional collateral to make performing liquidations worthwhile. Must be within 0-25%.

Liquidaton Threshold A percentage CR threshold after which a CDP is subject to liquidation.

Market Place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services. Also a market can mean a one-to-one relationship of any Collateral Asset to Kresko Asset.

Maximum Liquidatable Value Maximum value for a single liquidation call.

Minter Equal to Borrower.

Minting Creation of new tokens, increases the circulating supply. In the context of the Kresko protocol this is also refers to borrowing Kresko Assets.

Minimum Collateralization Ratio — Minimum ratio of collateral to debt. If the ratio is equal to Minimum Collateralization Ratio, user cannot take more debt before depositing more collateral or repaying existing debt. Expressed as a percentage.

Minimum Collateral Value — The minimum value of collateral required to back debt taken.

Minimum Debt Value — Minimum value that can be borrowed from the Kresko protocol.

MCR — Shorthand for Minimum Collateralization Ratio.

Overcollateralization Collateral value is greater than the debt taken.

Oracle Entity that queries market data from trusted data sources, sends it to an oracle network which forwards the data into the blockchain for consumption by Kresko protocol.

Oracle Feed — A smart contract where valid data is posted by the oracle network for consumption by other smart contracts.

Oracle Price — Price reported by an oracle to an oracle feed.

Open Fee Possible percentage fee configuration, taken by the protocol when taking on debt. Must be within 0-10%.

Protocol — Kresko synthetic asset protocol, most often refers to the smart contracts infrastructure.

Proxy — Smart contract that can be upgraded while retaining the same address.

Ray — A number with 27 decimals of precision.

Rebase — When a stock split, reverse stock-split or similar event happens for a underlying asset the corresponding Kresko Asset will rebase all wallet balances and the total supply to matching values.

Safety Parameter A risk-mitigation variable that is set globally or on a per-asset basis.

Safety Council A multisig consisting of at least 5 signers that can enable and disable protocol functionality with a quorum.

Synthetic Asset Asset that derives its value from another asset.

Short Position Selling an asset with the intention of repurchasing it back later, expecting the value will decrease.

Supply Limit Maximum circulating supply of tokens that can be minted of a Kresko Asset.

Trader Accounts that only use the AMM to buy and sell Kresko Assets.

TWAP Time weighted average price.

Underlying Asset Asset that synthetic assets derive their value from.

Wad — A number with 18 decimals of precision.

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