Glossary

LTV (Loan to Value)

The Loan to Value (”LTV”) ratio defines the maximum amount of assets that can be borrowed with specific collateral. It is expressed as a percentage (e.g., at LTV=75%, for every 1 ETH worth of collateral, borrowers will be able to borrow 0.75 ETH worth of the corresponding currency). Once a borrowing occurs, the LTV evolves with market conditions.

E-Mode

Efficient Mode (”E-Mode”) allows assets that are correlated in price (e.g., DAI, USDC, and USDT) to be listed in the same eMode category, which maximizes capital efficiency by allowing higher LTVs when both the borrow and collateral asset belong to the same E-Mode category. More info on E-Mode can be found here.

Isolation Mode

Isolation mode can be used to limit the systemic risk of listing riskier assets. Isolation mode limits an asset to only borrow isolated stablecoins and only use a single isolated asset as collateral at a time. More info on isolation mode can be found here.

Health Factor

The health factor is the numeric representation of the safety of your deposited assets against the borrowed assets and their underlying value. The higher the value is, the safer the state of your funds is against a liquidation scenario.

Optimal Fund Utilization Rate

Optimal fund utilization rate refers to the efficient and effective allocation and use of available funds or resources to achieve the best possible outcomes or results.

Liquidation Threshold

The liquidation threshold is the percentage at which a position is defined as undercollateralized. For example, a Liquidation threshold of 80% means that if the value rises above 80% of the collateral, the position is undercollateralized and could be liquidated.

The delta between the LTV and the Liquidation Threshold is a safety mechanism in place for borrowers.

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 that has passed the liquidation threshold.

Liquidation Factor

The liquidation factor directs a share of the liquidation penalty to a collector contract from the ecosystem treasury.

Reserve Factor

The reserve factor allocates a share of the protocol’s interests to a collector contract from the ecosystem treasury.

hTokens (HopeLend Tokens)

hTokens are yield-generating tokens minted and burnt upon supply and withdrawal of assets to HopeLend Pool, mapping 1:1 to the underlying assets supplied.

dTokens (Debt Tokens)

dTokens are interest-accruing tokens minted and burned upon borrowing and repayment, representing the debt the token holder owes.