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Glossary

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Glossary

Some terms used throughout the documentation may be unfamiliar to our readers. Below, we list some common terms that will help you with your understanding. If you still have some questions or need some support, please do not hesitate to reach out on the Standard community Discord server πŸ•ΉοΈ.

User

Someone using the protocol to get stablecoins from collateral or to redeem collateral from stablecoins. This is sometimes used interchangeably with the terms stable seeker (for someone willing to get stablecoins) or stable holder (for someone owning Angle's stablecoins).

Collateral

Cryptocurrency assets (USDC, DAI, wETH, wBTC, ...) are held in reserves supporting the value of the stablecoins issued by the protocol.

Collateral Debt Position (CDP)

A collateralized debt position (CDP) is the position created by locking collateral in a smart contract to generate its decentralized stablecoin, USM in Standard Protocol’s case. This system was introduced to the decentralized finance world by the MakerDAO team and is how its decentralized stablecoin DAI is created.

The value of the collateral locked in a CDP needs always to exceed 150% of the value of stablecoin that it was used to generate. If a position becomes undercollateralized, the assets locked in the smart contract get liquidation to pay back for the stablecoin generated.

Collateral Ratio

The ratio between the total value of collateral backing a stablecoin, and the total supply of this stablecoin. The value of the collateral is expressed in the related stablecoin.

Debt Ratio

For a strategy used for a stablecoin/collateral pool, it refers to the ratio between how much collateral is deployed in a strategy and the total amount of collateral tied to the pool the strategy relates to. This total amount includes the amount in the contract corresponding to the pool and the sum of the amounts given to related strategies. Each strategy of the protocol has a target debt ratio.

Non-fungible Token (NFT)*

β€œFungibility” means that units of a currency or commodity are alike and indistinguishable. Examples of fungible currencies are $1 bills, each of which is alike and represents the same value.

On the other hand, non-fungible tokens represent unique assets whose value is independent of one another. For example, an NFT might represent a piece of unique digital artwork, a Mickey Mantle baseball card, or a share of physical North Carolina real estate. Despite this difference, NFTs can be exchanged in the same manner as any other token on a crypto network.

The ability to represent unique assets greatly enhances the composability and functionality of crypto networks since many real-world assets are non-fungible. In turn, this enables blockchains to support more flexible economies.

Interoperability*

Interoperability is about systems talking to each other β€” whether devices, networks, or applications. It is a way of enabling compatibility between systems.

For instance, if a user wants to directly transfer assets/value across different blockchains, i.e. from Bitcoin to Ethereum, interoperability protocols create the β€œbridge” to enable this exchange.

Perpetual Futures

Contracts taken by HAs in the protocol, to non-optionally buy given collateral at an unspecified point in the future. Perpetual futures are financial instruments that try to follow the price of an underlying and are used by traders to take leveraged positions. More details about such products can be found here.

Interests Accumulated

For a given collateral/stablecoin pair, it refers to the transaction fees and yield from lending that have been redistributed in the corresponding pool. Not all interests accumulated by a pool are distributed to SLPs, a portion directly goes to the protocol's surplus.

MTR Tokens

Tokens representing Angle stablecoins. They can be minted or burnt by swapping with whitelisted collateral. Tokens start with ag followed by the asset to which they are pegged, like agEUR or agJPY. Ag stands for Angle.

LTR Tokens

Angle LP Tokens distributed to SLPs bringing collateral to the protocol for a given stablecoin/collateral pair. These tokens share some similarities with Compound's cTokens. sanDAI_EUR are for instance the tokens given to SLPs bringing liquidity to the DAI/agEUR pair. These tokens can be exchanged back at any point in time against collateral at an exchange rate that varies in function of the interests accumulated. They are ERC20 tokens that automatically accrue yield.

Strategy

A smart contract defining strategies to earn yield from Angle collateral reserves for each stablecoin/collateral pair. They can involve lending to platforms like Aave or Compound and are inspired by Yearn vaults strategies.

Stablecoins*

A stablecoin is a cryptocurrency that maintains a stable value (relative to another asset, such as the U.S. dollar) over time. Cryptocurrencies such as Bitcoin and Ethereum might experience huge price swings in a single day. As a result, they are seen by many as unsuitable for many everyday financial transactions.

Stablecoins attempt to address price volatility through one of the following approaches β€”

Fiat-collateralized: a user deposits real-world fiat currency (e.g. U.S. dollars) in a bank account of a trusted third-party, which in turn mints an equivalent value of stablecoins on a given blockchain and sends to the user.

Cryptocurrency-collateralized: a user deposits cryptocurrency into a smart contract running on a blockchain. The contract then issues a percentage of the deposit value to the user in the form of stablecoins. In other words, the contractΒ loansΒ stablecoins based on the value of a user’s deposited collateral

Seigniorage shares: where a smart contract replaces a central bank, and can thus programmatically increase or reduce the supply of currency in the system, ensuring that it maintains a stable value.

Oracle

Oracles are third-party services that allow smart contracts within blockchains to receive external data from outside of their ecosystem. They are mainly used to make cryptocurrency market prices available and usable on-chain. The protocol relies on Chainlink and DIA oracles separately.