Glossary
Non-Fungible Vault (NFV)
A Non-Fungible Vault is a Collateralized Debt Position (CDP) that is tied to and controlled by an NFT, thereby enabling the transfer or sale of the CDP without requiring debt to be paid back.
OD
OD is Open Dollar’s stablecoin, a floating $1.00 pegged stablecoin backed by Liquid Staking Tokens with NFT controlled vaults.
ODG
ODG is Open Dollar’s governance token which grants holders the ability to submit proposals and vote on the Open Dollar’s governance.
APR
APR, or annual percentage rate, represents the yearly rate charged for borrowing.
APY
APY, or annual percentage yield, refers to how much interest is earned and takes into account compound interest.
Arbitrage
Arbitrage is the act of seeking to exploit price differences between markets to make profit. Arbitrageurs are individuals who benefit from price discrepancies while helping to align pegged token prices.
Bridge
A bridge is a platform that allows for the transfer of blockchain assets from one network to another. For example, from mainnet Ethereum to the Arbitrum rollup.
CEX
Centralized Exchange. Binance and Coinbase are examples of CEXs. Acting as centralized authorities, as they take custody of a user’s funds on deposit.
Collateral
The assets that are deposited, such as wstETH or rETH, in order to borrow another asset, such as OD.
Collateralization Ratio
The collateralization ratio is the ratio between the value of the collateral in a vault and the value of its debt in OD.
Liquidation
Liquidation is when borrowed positions are forcefully closed if asset values fall below the minimum Collateralization Ratio, in order to pay back the loans.
Over-collateralized
Over-collateralization means the value of locked collateral exceeds the value of stablecoins minted.
Collateralized Debt Position (CDP)
A collateralized debt position refers to the assets deposited into a lending protocol as collateral in order to borrow stablecoins, such as OD.
Debt Amount
The number of borrowed tokens, for example OD, required to redeem the collateral in a vault.
DeFi
DeFi stands for Decentralized Finance, which refers to financial services and products that operate on public blockchains like Ethereum.
DEX
A DEX (decentralized exchange) is a cryptocurrency exchange that allows for peer-to-peer trading of digital assets and cryptocurrencies without the need for an intermediary or centralized authority. For example, Camelot or Uniswap
Governance
Governance refers to the democratic process of managing a project or ecosystem by a collective of stakeholders who hold governance tokens which grant the power to submit proposals and vote.
DAO
A Decentralized Autonomous Organization is a type of organization that is run on blockchain or peer-to-peer networks and governed by rules encoded into smart contracts. They allow for decentralized governance and coordination of pooled funds and resources, without central management. The rules are transparent and autonomous once launched on a blockchain.
Governance Token
A governance token gives holders voting rights to influence decisions in a decentralized protocol. Governance token holders can propose and vote on upgrades to the protocol.
Leverage
Leverage refers to the use of debt (borrowed funds) to amplify capital. People use leverage to multiply their buying power in the market.
Liquidation Penalty
The liquidation penalty is a fee rendered on the price of assets of the collateral when liquidators purchase it as part of the liquidation of a loan. This is paid by the vault owner.
Liquidation Price
The liquidation price of a vault is the collateral's price at which the position becomes subject to liquidation. This happens when the collateral value drops below the Minimum Collateral Ratio (MCR).
Liquidity
A measure of how much available circulating supply there is of an asset or currency, and the activity of that asset or currency in an exchange, economy, or network. A currency with low supply and/or circulation is said to be illiquid.
Liquid Staking Tokens (LSTs)
LSTs are tokens issued by liquid staking platforms, such as Lido or Rocketpool and given as a liquid receipt of staked ETH elsewhere. They are also sometimes known as Liquid Staking Derivatives (LSDs).
Loan-to-value (LTV)
The loan to value is the amount of stablecoins debt compared with the collateral deposited in the vault.
Redemption
The act of burning a token to repossess the underlying collateral asset.