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.
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