Definitions

Glossary of Common Terms for pStability Protocol

Below are common terms that will be used throughout this guide. You may want to reference these definitions while you read through the documentation.

PulseChain/pDAI: A key token on PulseChain, used as the primary collateral asset for pStability Protocol. pDAI represents DAI tokens bridged to PulseChain and serves as the foundation for decentralized borrowing and stablecoin issuance.

Vault: A collateralized debt position (CDP), bound to a single wallet address.

pSTABLE: The stablecoin issued from a user’s collateralized debt position and freely transferable/tradable to any wallet address. pSTABLE is designed to maintain parity with the US dollar and can always be redeemed directly with the system. 1 pSTABLE is exchangeable for $1 USD worth of pDAI.

Collateral: Any asset which a borrower must provide to take out a loan. pDAI is the collateral used in pStability Protocol.

Active collateral: The amount of pDAI collateral recorded in a Vault.

Collateral Ratio: The current US Dollar value of the pDAI tokens locked up in the Vault divided by the amount of pSTABLE minted. This ratio determines the health of your debt. The minimum collateral ratio (CR) required is 110%, but higher ratios are recommended to avoid potential liquidation.

ICR: Individual Collateral Ratio for a single Vault.

MCR: Minimum Collateral Ratio.

TCR: Total Collateral Ratio.

SP: Stability Pool.

Active debt: The amount of pSTABLE debt recorded in a Vault.

Total active collateral: The sum of active collateral over all Vaults. Equal to the pDAI in the ActivePool.

Total active debt: The sum of active debt over all Vaults. Equal to the pSTABLE in the ActivePool.

Total defaulted collateral: The total pDAI collateral in the DefaultPool.

Total defaulted debt: The total pSTABLE debt in the DefaultPool.

Entire system collateral: The sum of the collateral in the ActivePool and DefaultPool.

Entire system debt: The sum of the debt in the ActivePool and DefaultPool.

Total Collateralization Ratio (TCR): The ratio of the dollar value of the entire system collateral at the current pDAI:USD price to the entire system debt.

Critical Collateralization Ratio (CCR): 150%. When the TCR is below the CCR, the system enters Recovery Mode.

Borrower: An externally owned account or contract that locks collateral in a Vault and issues pSTABLE tokens to their own address. They “borrow” pSTABLE tokens against their pDAI collateral.

Depositor: An externally owned account or contract that has assigned pSTABLE tokens to the Stability Pool to earn returns from liquidations and receive PRINT token rewards.

Redemption: The act of swapping pSTABLE tokens with the system in return for an equivalent value of pDAI. Any account with a pSTABLE token balance may redeem them, whether or not they are a borrower.

When pSTABLE is redeemed for pDAI, the pDAI is always withdrawn from the lowest collateral Vaults, in ascending order of their collateralization ratio. A redeemer cannot selectively target Vaults with which to swap pSTABLE for pDAI.

Repayment: When a borrower sends pSTABLE tokens to their own Vault, reducing their debt and increasing their collateralization ratio.

Retrieval: When a borrower with an active Vault withdraws some or all of their pDAI collateral from their own Vault, either reducing their collateralization ratio or closing their Vault (if they have zero debt and withdraw all their pDAI).

Liquidation: The act of force-closing an undercollateralized Vault and redistributing its collateral and debt. When the Stability Pool is sufficiently large, the liquidated debt is offset with the Stability Pool, and the pDAI is distributed to depositors. If the liquidated debt cannot be offset with the Pool, the system redistributes the liquidated collateral and debt directly to active Vaults with >110% collateralization ratio.

Liquidation functionality is permissionless and publicly available — anyone may liquidate an undercollateralized Vault or batch liquidate Vaults in ascending order of collateralization ratio.

Collateral Surplus: The difference between the dollar value of a Vault's pDAI collateral and the dollar value of its pSTABLE debt. In a full liquidation, this is the net gain earned by the recipients of the liquidation.

Offset: Cancellation of liquidated debt with pSTABLE in the Stability Pool and assignment of liquidated collateral to Stability Pool depositors in proportion to their deposit.

Redistribution: Assignment of liquidated debt and collateral directly to active Vaults in proportion to their collateral.

Pure offset: When a Vault's debt is entirely canceled with pSTABLE in the Stability Pool, and all of its liquidated pDAI collateral is assigned to Stability Providers.

Mixed offset and redistribution: When the Stability Pool pSTABLE only covers a fraction of the liquidated Vault's debt. This fraction of debt is canceled with pSTABLE in the Stability Pool, and an equal fraction of the Vault's collateral is assigned to depositors. The remaining collateral and debt are redistributed directly to active Vaults.

Gas compensation: A refund, in pSTABLE and pDAI, automatically paid to the caller of a liquidation function, intended to at least cover the gas cost of the transaction. Designed to ensure that liquidators are not dissuaded by potentially high gas costs.