Protocol glossary showing key terms and concepts in the Edel ecosystem

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Core Protocol Terms

Interest-bearing tokens received by users when they supply assets to Edel Protocol. aTokens represent the user’s share of the liquidity pool and accrue interest in real-time. These maintain compatibility with Aave’s token standard.
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.
A limit set by Edel Governance on the maximum amount of an asset that can be borrowed from the protocol. This helps manage exposure and risk associated with each asset.
An asset supplied to Edel Protocol to secure a borrowing position. The collateral must exceed the value of the borrowed amount to ensure the protocol’s solvency.
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 Edel Protocol’s smart contracts built on Aave infrastructure.

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Risk Management

The maximum amount of debt that can be issued against an isolated asset. Used to limit the risk exposure to a single collateral type within the Edel Protocol.
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.
Monitor your health factor closely to avoid liquidation. Maintain a health factor well above 1.0 for safety.
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.
The bonus provided to liquidators as an incentive to purchase undercollateralized assets in a liquidation event. It is expressed in percentage points.
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.
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.

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Advanced Features

A feature that limits borrowers to borrowing only certain stablecoins when using assets marked as isolated. It helps mitigate risk by restricting the total debt exposure to a single asset.
A feature that restricts certain assets to being borrowed alone, mitigating the risk of price manipulation or illiquid assets affecting the protocol’s solvency.

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Governance & Economics

Refers to the ability to create proposals or vote in Edel’s governance system, based on Edel governance token holdings.
A percentage of interest accrued by borrowers that is allocated to the Edel Treasury to help safeguard the protocol and fund ecosystem development.
An entity or automated system responsible for adjusting risk parameters in Edel Protocol without going through a governance vote. This allows Edel to respond quickly to unforeseen risks.
A limit set on the total amount of a particular asset that can be supplied to the Edel Protocol. This helps manage liquidity and risk exposure.
The amount of influence a user has in governance decisions, determined by the amount of Edel governance tokens they hold.

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Technical Infrastructure

Events like stock splits, mergers, or dividend distributions that affect how tokenized equity prices should be interpreted. Edel Protocol automatically adjusts for these events through oracle multipliers and activation times.
The time period during which a price from an oracle remains valid and trustworthy. Once this window expires, the protocol treats the price as stale and may switch to fallback sources or apply conservative policies.
Tracks the cumulative interest earned by a reserve over time, used to calculate accurate interest payments within the protocol.
An indicator showing whether a traditional market (for tokenized equities) is currently Open, Closed, or Halted. This affects how the protocol handles price updates and risk calculations for these assets.
Risks associated with the blockchain networks on which Edel operates, such as congestion, security vulnerabilities, or network failures.
A service used by Edel Protocol to fetch external data, such as the prices of assets, which is critical for determining the value of collateral and debt. Edel leverages Chainlink’s decentralized oracle network.
Edel inherits Aave’s robust oracle infrastructure while maintaining the flexibility to integrate additional oracle solutions as needed.
A unit of measurement with 27 decimals, used by the underlying Aave infrastructure for internal calculations to ensure precision, particularly for rates and exchange values.
The acceptable variance threshold for new oracle prices compared to the last trusted price. If a new price falls outside this range, the protocol may flag it as suspicious and apply additional validation or reject it entirely.
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 and typically results in higher interest rates.

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Additional Resources

Need more detailed information about any of these concepts?

Risk Management

Learn about Edel’s comprehensive risk management framework

Protocol Overview

Understand how Edel Protocol works and its key features

Supply & Earn

Learn how to earn yield by supplying assets to the protocol

Borrowing Strategies

Explore borrowing strategies and use cases