> ## Documentation Index
> Fetch the complete documentation index at: https://docs.batt.farm/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Terms used in batt's borrowing, deposit, and ecosystem documentation.

[한국어로 읽기](https://docs.batt.farm/glossary.md)

[How to use KRW\*](https://docs.batt.farm/en/use-cases.md) covers borrowing and repayment. [Managing your position](https://docs.batt.farm/en/manage-position.md) explains what to monitor after you borrow.

## KRW Star

KRW\* is pronounced "KRW Star." It is a crypto-backed, won-denominated stablecoin issued through batt. Its target price is ₩1, though its market price can differ.

## sKRW Star

sKRW\* is pronounced "sKRW Star." It is a deposit product for KRW\* holders. Initial deposits are planned for the SP.

## Collateral

Assets deposited to borrow KRW\*. Supported tokens and liquidation thresholds depend on the collateral market.

## Borrower

A person who borrows an asset. In batt, a borrower deposits collateral and creates KRW\* debt.

## Position

A record of one user's collateral, KRW\* debt, and interest rate. CDP stands for collateralized debt position: debt created against collateral.

## Debt

The amount of KRW\* owed. Accrued interest and applicable costs may be added to the original principal.

## Collateral ratio and LTV

Collateral ratio is collateral value divided by debt. Loan-to-value (LTV) is debt divided by collateral value. They express the same relationship in opposite directions. A lower collateral ratio, or a higher LTV, leaves less room before liquidation.

## Annual interest rate

An interest rate quoted on a yearly basis. In batt, borrowers choose their rate. It affects both borrowing costs and their place in the redemption queue. The contract's terms determine how interest and fees are calculated.

## Peg

A target value an asset is designed to track. KRW\* targets ₩1. A market price that moves away from the target is a depeg.

## Redemption

Exchanging KRW\* for collateral from borrowers' positions at its reference value in won. In the collateral market assigned to the redemption, batt processes lower-rate positions first. Both the affected borrower's debt and collateral decrease. See [How it works](https://docs.batt.farm/en/mechanism.md).

## Repayment

Paying down your own debt with KRW\*. The repaid tokens are burned. Repayment is distinct from redeeming KRW\* against another borrower's collateral.

## Liquidation

Settling a position's debt using its collateral when the position no longer meets the market's collateral requirements. Liquidation can involve costs and losses.

## Oracle

A system that supplies external price information to contracts. batt uses collateral prices and the won-dollar exchange rate to value collateral. See [Oracle design](https://docs.batt.farm/en/price-and-oracles.md).

## Liquidity and price impact

Liquidity describes the availability of funds and counterparties for trading an asset. A trade that is large relative to a pool can itself move the price. That movement is price impact.

## Stability Pool

A pool of KRW\* deposited in advance to settle debt from liquidated positions, abbreviated SP. The pool uses KRW\* to offset debt and receives the share of liquidated collateral specified by the rules.

## Offsetting

Settling liquidated debt with KRW\*, for example from the SP. The tokens used are burned and the debt is reduced by the corresponding amount.

## JIT

Short for Just-in-Time. In these docs, JIT refers to supplying funds at liquidation to settle debt.

## Redistribution

Transferring collateral and debt left after earlier liquidation stages to other positions specified by the rules. It does not cancel debt.

## ERI and ERL

ERI distributes incentives to market participants. ERL is a plan to allocate managed funds to markets. See the [comparison](https://docs.batt.farm/en/ecosystem-routed-liquidity.md).

## Gauges and voting incentives

A gauge allocates rewards to a pool on DEXs that support this mechanism. Voting incentives reward voters who direct rewards toward a particular pool. Not every DEX uses gauges.

## ve governance

A system in which token holders lock tokens for voting power and use that power to decide matters such as incentive allocation. batt plans to introduce ve governance; it is not currently active.

## Flash loan

A loan that must be taken out and repaid with its fee in the same transaction. If the required conditions are not met, the transaction's state changes revert. A failed transaction can still cost gas.

## Leverage and looping

Leverage uses borrowed funds or other mechanisms to gain exposure larger than your own capital. Looping is one way to create leverage: borrow, buy more collateral with the borrowed funds, deposit it, and repeat. Leverage amplifies losses and liquidation risk as well as potential gains.


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