Glossary

Term	Description
Application Specific Sequencing	A method for ordering transactions within an application to optimize functionality and achieve a specific use case.
Bad Debt	Occurs when a user's collateral value falls below the amount required to cover a user's outstanding loans.
Close Factor (cFactor)	The % amount of a debt position that can be "closed" (repaid) on liquidation. This value scales between the "Base" rate up to 100% on a hard liquidation.
Collateral	An asset pledged by a borrower to secure a loan. If the borrower defaults, the collateral can be used to recover the owed debt.
Collateral Caps	Collateral caps are limits set which determine the maximum amount of a specific asset that can be supplied as collateral. These caps are designed to manage risk by restricting protocol overexposure to any single asset.
Collateral Requirement	The premium of excess collateral required to avoid triggering a soft or hard liquidation. Part of the formula in the Curvance Dynamic Liquidation Engine.
Collateralization Ratio	Defines the maximum borrowing threshold for each asset, reflecting its specific risk profile. Assets with lower risk have higher collateralization ratios. Part of the formula in the Curvance Dynamic Liquidation Engine.
Price Guard	A component of Curvance's oracle system where stale or invalid pricefeed values are rejected or clamped.
Dynamic Interest Rates	Refers to the Curvance platform's interest rates, which adjust in real-time based on market demand within each lending pool.
ERC-4337	ERC-4337 is a standard for smart accounts that enables account abstraction. This standard enhances application-specific sequencing for liquidation auctions and OEV capture.
ERC-4626	ERC-4626 is a tokenized vault standard in DeFi designed to enhance interoperability and efficiency for yield-bearing assets. Curvance's native vaults leverage this standard to streamline deposits, auto-compound rewards, and integrate seamlessly with other protocols for maximum capital efficiency.
Borrowable cTokens	When users deposit assets into Curvance as lenders, they receive a proportionate amount of Borrowable cTokens, representing their share in the lending pool.
Hard Liquidation	Full liquidation with a high penalty if the Health Factor is critically low, meaning Curvance can shed risk faster than other lending protocols in times of high volatility.
Health Factor	A numerical representation of the safety of a user's collateralized position. It measures how close a position is to being liquidated.
Interest	The fee borrowers pay to lenders for accessing funds
Liquidation Factor (lFactor)	The % skew between a soft liquidation and a hard liquidation. This value controls the effective cFactor and liquidation incentive for a user liquidation. A lFactor of 0% indicates a base soft liquidation, an lFactor of 100% indicates a hard liquidation. Anywhere inbetween blends the effective rates.
Liquidation Fee	The penalty the protocol takes from a user's collateral during a liquidation. Part of the formula in the Curvance Dynamic Liquidation Engine.
Liquidation Incentive	The liquidator's incentive to liquidate a user position. Part of the formula in the Curvance Dynamic Liquidation Engine.
Loan to Value (LTV)	Percentage used to represent the relationship between the amount of a loan (debt) and the value of the collateral backing it. It is a key metric for determining how much a user can borrow against their deposited collateral.
Looping	A strategy in which a user deposits a collateral asset and borrows funds to purchase more of an asset.
Oracle	A service that provides smart contracts with access to external data such as price feeds of assets.
Orderflow Auctions	A decentralized offchain auction system for "selling" the opportunity to liquidate user positions inside the Curvance Protocol.
cToken	When users deposit tokens into the Curvance Protocol, they receive a proportionate amount of cTokens (Curvance Tokens), representing their share in the managed vault. Earned yield is automatically compounded, increasing the user’s overall position over time.
Socalized Bad Debt	Spreading potential shortfalls across the entire lender market. This equitable approach reduces individual exposure, prevents bad debt accumulation, and strengthens the market's overall stability.
Soft Liquidation	A partial liquidation occurs with a small penalty, preserving more of the user's collateral compared to traditional full liquidation designs.
Utilization Rate	The percentage of available liquidity in a lending or liquidity pool that is actively being borrowed or used. Pool utilization is part of the formula when dynamic interest rates are calculated.