Glossary

Term	Description
APY	Annual Percentage Yield, which is the yield/interest after a year, including compounding interest. This differs from APR, which does not account for compounding effects.
Borrow Cap	A limit set by PoolConfigurator smart contract on the maximum amount of an asset that can be borrowed from the protocol. This helps manage exposure and risk associated with each asset.
Collateral	An asset supplied to Unilend to secure a borrowing position. The collateral must exceed the value of the borrowed amount to ensure the protocol's solvency.
Credit Delegation	A feature where users can delegate their borrowing power to another user who can then take out loans using the collateral of the delegator. This is facilitated through the Unilend Protocol's smart contracts.
Debt Ceiling	The maximum amount of debt that can be issued against an isolated asset. Used to limit the risk exposure to a single collateral type.
Health Factor	A ratio that determines the health of a user's loan position. It compares the value of the user's collateral to their borrowed assets. A health factor below 1 triggers liquidation.
Liquidation	The process that occurs when a borrower’s health factor drops below 1, resulting in the sale of collateral to repay part of the debt and bring the position back to a safer level.
Liquidation Penalty	When a liquidation occurs, liquidators repay up to 50% of the outstanding borrowed amount on behalf of the borrower. in return, they can buy the collateral at a discount and keep the difference (luquidation penalty) as a bonus.
Liquidation Threshold	The point at which a loan becomes eligible for liquidation due to insufficient collateral relative to borrowed funds. The threshold is defined per asset and determines the collateral value required to maintain a position.
Liquidity Index	Tracks the cumulative interest earned by a reserve over time, used to calculate accurate interest payments.
Loan To Value (LTV)	The maximum percentage of a collateral asset's value that can be borrowed. For example, an LTV of 75% means that for every 1 ETH of collateral, 0.75 ETH can be borrowed.
Oracle	A service used by Unilend to fetch external data, such as the prices of assets, which is critical for determining the value of collateral and debt.
Supply Cap	A limit set on the total amount of a particular asset that can be supplied to the Unilend protocol.
Utilization Rate	A metric that determines the proportion of borrowed assets to the total available assets in a reserve. A higher utilization rate indicates higher borrowing demand.
uToken	Interest-bearing tokens received by users when they supply assets to Unilend. uTokens represent the user’s share of the liquidity pool and accrue interest in real-time.