Glossary

Every term the rest of this documentation uses, in plain words. If a chapter used something without explaining it, that is a defect, and this is where to check.

The position

collateral: What you deposit and pledge. It stays yours and keeps earning whatever it earns, but it can be sold out from under you if the position goes underwater.
debt: What you borrowed against the collateral. It grows on its own as interest accrues.
equity: What is actually yours: the collateral value minus the debt. It is the small difference between much larger numbers, which is why leverage magnifies everything.
leverage: How large the position is relative to your own money. Opening at higher leverage borrows more and buys more collateral with it.
position: One collateral, one debt, in one market. You can hold several at once.

Getting liquidated

LTV: Loan to value: your debt as a fraction of your collateral value.
LLTV: The LTV at which liquidation becomes allowed. Set by the market.
health factor: How far you are from that line, as a single number. Above one is safe, below one can be liquidated.
liquidation: Somebody repays part of your debt and takes part of your collateral at a discount, without asking. It is how the market keeps loans covered.
liquidation price: The collateral price at which your health factor would reach the line.

The transaction

flash loan: A loan taken and repaid inside a single transaction. Nobody checks your credit, because if it is not repaid by the end the whole transaction is cancelled as though it never happened. It is what lets an entire leveraged position open at once.
aggregator: A service that finds the best way to trade one token for another across many exchanges. DeVOLT asks several and takes the best answer.
slippage: The gap between the price you were quoted and the price you got. Bigger trades in thinner markets slip more.
gas: What the chain charges to run your transaction.
revert: A transaction that fails and is undone entirely. You pay the gas; nothing else happens.

What things earn and cost

APY: A yearly rate, including the effect of earnings compounding. Used for what collateral earns.
APR: A yearly rate without compounding. Used for what debt costs.
net APY: What the whole leveraged position returns after the debt is paid for. It can be negative.
spread: What the collateral earns minus what the debt costs. Positive means the loop pays.
basis point: A hundredth of a percentage point. Rates and fees are often quoted this way because the differences are small.
incentive: A reward some venues pay to borrowers, which offsets part of the interest.

The market

lending market: A pair of one collateral and one borrowable token, on one venue. The same pair on a different venue is a different market with different rates.
venue: The lending protocol hosting the market.
liquidity: How much of the loan token is actually available to borrow right now.
utilization: How much of what has been supplied is currently borrowed. Near the top, rates climb steeply and withdrawing gets hard.
oracle: What tells the market the price of your collateral. Liquidation is judged against it.
matured: A dated instrument that has reached its end date. Entries close, exits stay open.

Tokens you will meet

stablecoin: A token intended to hold a steady value, usually against the dollar.
liquid staking token: A token representing staked coins that keeps earning staking rewards while you hold and use it.
vault share: A token representing a deposit in a strategy. Its value comes from the strategy rather than from a market price, and getting out may mean redeeming rather than selling.
permissioned asset: A token only approved holders may hold. It cannot be traded openly, which is why it cannot be levered here.

How DeVOLT talks about what it knows

a dash: Not measured. It never means zero. The Reading the numbers chapter explains why that distinction is the whole point.
measured at: When a figure was read. A balance without a time is not a measurement.
risk grade: A letter summarising measured risk axes. A summary of what was measured, not a prediction.

If you met a word in these pages that is not here, that is worth reporting. The point of this chapter is that reading the documentation from start to finish should not require knowing anything in advance.