Glossary

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 Kopio 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 Kopio 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 Kopio Assets.

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

kFactor — Multiplier used for risk adjusted valuation of Kopio Assets.

kValue — Debt value adjusted by the kFactor.

Kopio Asset — Synthetic asset that can be minted from the Kopio protocol.

kAsset — Shorthand for Kopio Asset

ONE — Primary stable value asset that can be minted and deposited within the Kopio 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 Kopio 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 Kopio protocol this is also refers to borrowing Kopio 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 Kopio 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 Kopio 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 — Kopio 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 Kopio 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 Kopio Asset.

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

TWAP — Time weighted average price.

Underlying Asset — Asset that synthetic assets derive their value from.

Wad — A number with 18 decimals of precision.