# Key Terminology

**Digital Asset:** Any cryptocurrency or tokenized asset class available on decentralized exchanges. Including but not limited to liquid digital assets, tokenized stocks, NFTs, and more.

**Equity :** This is the initial amount a user puts as their contribution, based on equity a borrowing limit is defined.

**User :** Any wallet holder who engages with the protocol either as a LENDER or as a BORROWER.

**Lender :** Any Wallet holder who engages with the protocol to provide liquidity in one or multiple isolated pools.

**Borrower :** Any Wallet holder who engages with the protocol to borrow from one or multiple isolated pools.

**Borrowed Asset :** Any amount of digital asset borrowed from any of the isolated pools to further invest in a digital asset within the protocol.

**Invested Asset :** Any investment made by the user after borrowing from the protocol. e.g. ETH/AVAX/MATIC etc.

**Collateral :** The term collateral refers to Invested assets which are kept under the protocol as deposit/security.

**Borrowing Balance:** Maximum amount a user can borrow. It is calculated based on equity and borrowed assets.

**DeFi:** Decentralized Finance.

**TVL:** Total Value Locked.

**DEX:** Decentralized Exchange.

**Permissionless :** Anyone can lend their assets across the protocol(s) of their choosing at minimal costs.

**Automated :** Smart contracts follow pre-established parameters to issue, monitor and service active loans.

**Non-Custodial :** Virtually all DeFi lending protocols do not require users to transfer ownership of their underlying assets. This means they can come and go as they please without any guidance or approval from a third party.

**Secure :** Major lending protocols have been rigorously audited, meaning that funds supplied to lending contracts are backed by the most robust code in the world.


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