Glossary
Terms used in the xBacked protocol
Minting: the process of putting new xUSD tokens into circulation
Collateral: token types allowed to be deposited when opening a vault. To begin with, xBacked will only support ALGO.
System Debt: the total supply of xUSD in the system
Vault: owned by a user, and it is the primary mechanism for a user to mint xUSD
Vault Debt: the amount of xUSD a vault minted.
Liquidation: performed by the xBacked protocol using xUSD staked in the liquidation pool. Will liquidate vaults with an unhealthy collateral ratio.
Redemption: allows users to redeem 1 xUSD for $1 of system collateral. This is done by selecting the riskiest vault in the system.
Withdrawing: the process of removing collateral in a vault, back into your wallet.
Staking: the process of locking tokens in a contract.
Collateral Ratio: the ratio of collateral to debt. The system, and vaults within the system, must always have more collateral than debt to maintain the peg.
Last modified 10mo ago