 # Glossary

as of 01/25/2023
This section is aimed at lenders and borrowers. It regroups the different keywords you may find in the Hatom protocol and their definitions.

## General parameters

### Money Markets or "MM"

We refer to the money market as any token listed in a lending network. A money market can be understood as a pool of tokens to which lenders provide liquidity and from where borrowers take liquidity.

### Utilisation Rate

The Utilisation rate is a percentage that shows how much of a money market’s total value is being borrowed. It can be calculated by dividing the (Total Value of Assets Borrowed) by (Total Value of Assets Supplied).

### Collateral Factor or Loan to Value

The collateral Factor is expressed as a percentage. It’s a multiplier used to calculate the maximum amount you can borrow against your collateral. The collateral factor differs from one token to another. For example, if EGLD has a collateral factor of 80%, for every \$1,000 of EGLD supplied, you can borrow \$800 of any available token.

### Borrow Limit Used

Borrow Limit Used is a percentage that indicates the ratio amount you currently have borrowed to the total amount you are allowed to borrow. For example, if you can borrow a maximum of \$1,000 (as determined by the Collateral Factor of the supplied token), borrowing \$750 would equate to 75% of the Borrow Limit Used.

### BorrowCap

The maximum of tokens that can be borrowed from a MM (best thought of in terms of a percentage of tokens in circulation, e.g., If there are 100,000,000 tokens in circulation, then a borrowCap of 5,000,000 is 5%)

### Liquidation Factor/Threshold or Health Factor

The liquidation Factor is a percentage that indicates the value at which liquidation occurs and can be thought of as the ratio between the supplied value and the borrowed value. For example, if a user deposits EGLD and has a Liquidation Factor of 75%. When the value of the borrowed positions reaches 75% of the supplied EGLD, a liquidation can occur. The liquidation Factor differs from one token to another.

### Liquidation Limit Bar

The Liquidation Limit Bar is a percentage that indicates the ratio of your borrowed value to the borrowed value that would trigger liquidation. It tracks how close your borrow position is to being liquidated. When the Liquidation Limit attains 100%, you can be liquidated. For example, if a user supplies \$1,000 EGLD as collateral and has a liquidation factor of 70% (so the user’s position gets liquidated when his borrow value equals \$700). If he borrows 1 MEX worth \$350, his liquidation limit bar would be 50% (\$350 Borrowed/\$700 Liquidation Value.)

### Liquidation Incentive or Penalty

A liquidation Incentive is a cut in price at which a liquidator receives a user’s collateral when completing a liquidation. This discount encourages liquidators to complete liquidations to keep a healthy state.

### Reserve Factor

The portion of borrower-paid interest (per second) to the reserve. The remainder of the borrower-paid interest goes to the MM’s suppliers.

### Close Factor

A close Factor is a percentage that indicates the amount of a position that a liquidator can close at one time when performing a liquidation.

### ActiveCollateralCapUSD

The maximum value (in USD) can be used as collateral to borrow against. To be used as collateral, the total active collateral in the said asset must be smaller than activeCollateralCapUSD

### Supply/Borrow APY

The Supply APY is a percentage that reflects the amount of interest a user would earn over one year for supplying tokens. On the other hand, The Borrow APY reflects the interest the borrowers pay for borrowing tokens.

### HTokens

HTokens are issued to lenders after supplying assets to a lending network. HTokens are exchanged for the underlying asset when users wish to withdraw their supplied assets.

### Underlying Token

The token that can be lent/borrowed in the MM.

### Cash

The number of underlying tokens held by the MM. The balance increases whenever tokens are deposited into the MM and decrease whenever tokens are borrowed from the MM.

### Reserve Balance

The total amount of underlying tokens that the MM has set aside as a protocol fee. This amount increases as borrowers pay interest and decreases when the admin withdraws these tokens. The reserve can be used, among other things, as an insurance fund to cover the bad debt incurred by the MM.