🔘Definition

TVL

Total value locked

TVR

Total value routed

LTV

Loan to value ratio. With Dynamic, the max LTV is 80%

IRM

Stands for interest rate model (descending based on TVR)

LP

Stands for liquidity provider who are rewarded with yield

Interest

Interest is what you receive when lending or what you pay when borrowing

Collateral

The capital or value put up to secure a loan. With Dynamic, you may borrow up to 80% of your current balance. For example, let's say you have bills coming up, but don't want to sell your ETH. You can borrow USDC and pay it back later with no due date or hidden fees.

Utilization

The percentage of assets borrowed from the supply, calculated as:

$$(BorrowBalance/SupplyBalance)* 100$$

Leverage

Leverage helps users multiply their long or short exposure to assets

Loops

Leverage cycles so you get can the exposure you prefer. For example, you may supply $1,000 of ETH, borrow $500 of USDC, swap it back to ETH and supply again. With Dynamic Loops, the process is all automated in one transaction. It is currently under development.

Collateral Factor

Ratio which determines how much collateral is required to take out a loan of a given token. For example, if a user supplies $1,000 of ETH as collateral and the collateral factor for ETH is 80%, then the user can borrow assets worth $800 (80% of the collateral supplied).

Liquidation

When the value of a borrowed position exceeds the collateral factor, liquidation will happen. With Dynamic, a borrow position will be partially (not fully) liquidated to rebalance the loan. When a loan is liquidated, a 12% liquidation incentive is also charged to the loan.