> For the complete documentation index, see [llms.txt](https://kresko.gitbook.io/kresko-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kresko.gitbook.io/kresko-docs/fundamentals/glossary.md).

# Glossary

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**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.