# Glossary

This page defines the minimum set of terms you need to read the rest of the docs without getting lost.

## At a glance

* Definitions are **simplified** and written for general users.
* Where a term is **parameter-dependent** (e.g., CR thresholds), the exact value is not repeated here.
* If you need code-level detail, jump to [Technical Overview](https://hann-finance.gitbook.io/hann-finance/developers/technical-overview).

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**Simplification notice** — Some terms have multiple formal definitions across DeFi. In this GitBook, we use the definitions below consistently.
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## Core terms

| Term                         | Meaning (plain)                                                                           | Why it matters                                                 |
| ---------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------------------------- |
| CDP                          | A system where you deposit collateral and borrow a stable asset against it                | Your position has liquidation risk                             |
| Trove                        | Your individual CDP position (represented as an NFT)                                      | Where you manage collateral, debt, and safety                  |
| Collateral                   | The asset you deposit to secure your USDHN debt                                           | Price drops can liquidate you                                  |
| Debt                         | The USDHN you minted (plus any accrued fees)                                              | You repay it to close the position                             |
| USDHN                        | The protocol’s USD-pegged asset                                                           | Used for borrowing, Earn, swaps, and redemptions               |
| Peg                          | “1 USDHN ≈ 1 USD” in the market                                                           | Peg health affects all users                                   |
| Redemption                   | Swapping USDHN back into collateral via the protocol                                      | A core peg-defense mechanism                                   |
| Liquidation                  | Forced position closure when safety thresholds are violated                               | Primary risk for borrowers                                     |
| Earn (Stability Pool)        | A USDHN pool that absorbs liquidations and receives rewards                               | You can earn, but may receive collateral                       |
| LST                          | Liquid Staking Token (a tokenized staked position)                                        | Adds staking yield + unbonding/liquidity risk                  |
| bKAIA                        | A Kaia LST used in Hann Finance flows                                                     | Keeps KAIA exposure with staking mechanics                     |
| HNKAIA                       | A wrapper token that represents bundled Kaia LST exposure                                 | Simplifies collateral and liquidity                            |
| Bridge                       | A mechanism to move assets between chains                                                 | Adds cross-chain and integration risk                          |
| OFT                          | Omnichain Fungible Token (a token design for cross-chain transfer)                        | Enables bridging; introduces cross-chain messaging/bridge risk |
| StableSwap                   | A DEX design optimized for stable-to-stable swaps                                         | Lower slippage for stable pairs                                |
| LP token                     | The receipt token you get for providing liquidity                                         | Represents your share of a pool                                |
| Slippage                     | The difference between expected and actual swap outcome                                   | Can cause worse execution or reverts                           |
| Zapper                       | A contract that bundles many actions into one transaction                                 | Makes complex flows usable                                     |
| Permit2                      | A signature-based token approval/pull standard used by some Zappers                       | Reduces repeated approvals                                     |
| Flash swap (in-tx liquidity) | Temporary liquidity obtained and settled within the same transaction (via a DEX callback) | Enables one-click leverage, but adds complexity                |

## Ratios and math

$$
CR = \frac{\text{Collateral Value}}{\text{Debt Value}}
$$

CR (Collateral Ratio) is the simplest way to reason about borrower safety: higher CR generally means more buffer.

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**\[TBD] Protocol thresholds** — Minimum/critical ratios are set per collateral branch. Values differ by branch (and deployment), and new branches can be added over time. This GitBook avoids hardcoding them in the glossary.
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## Next reads

* Borrowing mechanics: [Borrowing & Liquidation](https://hann-finance.gitbook.io/hann-finance/protocol/borrowing-and-liquidation)
* Peg mechanics: [Redemptions & Risk](https://hann-finance.gitbook.io/hann-finance/protocol/redemptions-and-risk)
* StableSwap usage: [StableSwap DEX](https://hann-finance.gitbook.io/hann-finance/protocol/stableswap-dex)