Definitions
Position
A collateralized debt position, bound to a single Ethereum address. Also referred to as a “CDP” in similar protocols.
aUSD
The stablecoin that is issued from a user’s collateralized debt position upon opening. 1 aUSD can always be exchanged for $1 of collateral or deposited in the Stability pool to earn yield.
Bonded AU
Bonded AU, or bAU, is the LP version of AU in the core pool utilized by the protocol. Providing liquidity gives users access to DEX swap fees and a governance multiplier.
Collateral
Any asset used to open a position on Aurelius. Each collateral has its own isolated pool and associated TCR, CCR, and MCR.
Collateral Pool
All the collateral for a given type deposited in Aurelius. Each collateral pool has their own TCR, CCR, and MCR, and is isolated from each other pool.
Collateral Ratio
The ratio of the USD-denominated value of some collateral to the aUSD debt that collateral backs. There are multiple important types of collateral ratios, described below.
Personal Collateral Ratio
The collateral ratio of an individual wallet’s position.
Total Collateral Ratio (TCR)
The collateral ratio of an entire collateral pool. Each collateral type has its own total collateral ratio.
Critical Collateral Ratio (CCR)
The TCR below which a given collateral pool will enter Recovery Mode.
Minimum Collateral Ratio (MCR)
The minimum required amount of collateral to debt ratio required to maintain an active position in Aurelius.
Stability Pool
Pooled aUSD which exists to liquidate under-collateralized positions in exchange for discounted collateral and AU yield.
Staking Pool
Pooled bAU that earns all fees from aUSD issuance and redemption.
Borrower
A wallet or smart contract that locks collateral in a position and issues aUSD tokens to their own address. They “borrow” aUSD tokens against their collateral.
Depositor
A wallet or smart contract that has deposited aUSD tokens in the Stability Pool in order to earn returns from liquidations and receive AU token issuance.
Redemption
The act of swapping aUSD tokens with the system in return for an equivalent value of collateral. Any wallet with an aUSD token balance may redeem, whether or not they are a borrower. When aUSD is redeemed, the collateral is always withdrawn from the lowest collateralized positions, in ascending order of their collateral ratio. A redeemer can not selectively target positions in which to swap aUSD for collateral.
Repayment
When a borrower sends aUSD tokens to their own position, reducing their debt and increasing their collateral ratio.
Liquidation
The act of force-closing an under-collateralized position and redistributing its collateral and debt. When the Stability Pool is sufficiently large, the liquidated debt is offset with the Stability Pool, and the collateral distributed to depositors. If the liquidated debt can not be offset with the Pool, the system redistributes the liquidated collateral and debt directly to the active positions with healthy collateral ratios. Liquidation functionality is permissionless and publicly available – anyone may liquidate an undercollateralized position one at a time or batched in ascending order of collateral ratio.
Liquidator
Usually a role filled by bots, liquidators call liquidation functions on the Aurelius smart contracts in exchange for users’ gas deposits.
Recovery Mode
Recovery Mode activates when a pool’s TCR falls below the CCR. During Recovery Mode, positions with a collateral ratio below that pool’s CCR are subject to liquidation in ascending order from the lowest collateralized position until the system’s TCR is above the CCR. During Recovery Mode, positions are closed as normal using their associated MCR and any leftover collateral will be made claimable on the Aurelius website.
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