Glossary

Liquid Staking Power (LSP): This innovation transforms deposited LSTs into a bond, unlocking new utilities and products in liquid staking, such as allocating protocol liquidity across various LST protocols, strategies, and products.

Concentrated Yield Token (CYT): A yield-enhancing token that aggregates depositors' yields, offering significantly higher returns compared to traditional deposit yields.

Yield-splitting: A mechanism that separates asset deposit yields into bonds, providing distinct rewards for token staking.

Refraction Fee: A fee deducted from protocol yields of LSP, redistributed to bondholders with adjustments based on bond maturity to ensure equitable distribution.

Vault Collateral Ratio: Defines the balance between a vault's collateral value in USD and its USDP debt.

Emission Boost: Participants can enhance their rewards in liquidity pools by locking PRIMIS tokens, with the boost magnitude depending on the locked amount and their pool stake.

Loan-to-Value (LTV): Specifies the maximum USDP that can be minted against a collateral, adjusting with market conditions to maintain protocol safety.

Liquidation Penalty: A fee applied to the collateral asset's price during its sale by liquidators, activated when a loan exceeds the liquidation threshold.

Liquidation Price: The price at which a vault's position becomes eligible for liquidation, varying with the operational mode and collateral ratio.

Liquidity: Essential for the liquidation process, influenced by on-chain liquidity and trading volume, with parameters designed to balance incentives and risks.

Locking: The act of securing PRIMIS tokens for governance participation, gauge weight voting, and claiming rewards.

Market Capitalization: The aggregate value of all a protocol's tokens, crucial for evaluating market size and the collateral's stability.

Minimum Collateral Ratio (MCR): The lowest debt-to-collateral ratio that avoids liquidation, set at 120% for normal operations.

Recovery Mode: Triggered when the system's overall collateral ratio falls below 150%, making certain vaults eligible for liquidation.

Redemption: The process of exchanging USDP for its underlying collateral.

Stability Pool: A mechanism ensuring system solvency by providing liquidity for covering debts from liquidated vaults, maintaining USDP supply collateralization.

Volatility: Impacts collateral value and the protocol's solvency, with risk management strategies in place to mitigate potential adverse effects on liquidation margins and process.