Reference
DeFi glossary for Tectonic users
Lending protocols come with their own vocabulary. Here are the terms that show up most often across this guide, defined the way you would explain them to a friend.
Core money-market terms
Money market
A shared pool where some users supply assets to earn interest and others borrow against collateral, with rates set automatically. Tectonic is a money market. See how it works.
Supplying (lending)
Depositing an asset into a market to earn the supply interest rate. Covered in the supplying guide.
Borrowing
Taking a loan of one asset by locking up another as collateral. See the borrowing guide.
tToken
The receipt token you receive when supplying (e.g. tUSDC). It grows in redeemable value as interest accrues and represents your share of the pool.
Over-collateralisation
The rule that collateral must be worth more than the loan it backs, so the protocol stays solvent if prices move.
Risk and rates
Collateral factor
The fraction of an asset's value you can borrow against. Higher for stablecoins, lower for volatile assets like CRO (historically ~50%).
Loan-to-value (LTV)
Your debt divided by your collateral value. The lower it is, the safer your position.
Liquidation threshold
The LTV point at which a position can be liquidated. Set above the borrow limit, leaving a safety buffer.
Liquidation
When a too-risky position has part of its collateral sold at a discount to repay debt. On Tectonic this carries a fee of roughly 10%, most of which rewards the liquidator.
Health factor
A live indicator of how far a position is from liquidation. Higher is safer.
APY
Annual percentage yield — the interest rate including compounding. Quoted separately for supplying and borrowing, and it floats.
Utilisation
The share of a market's supplied funds currently borrowed. It drives both supply and borrow rates; see interest rates.
Token terms
TONIC
The native token of the Tectonic protocol, total supply 500 trillion. Used for incentives and, when staked, governance. See the TONIC token page.
xTONIC
Staked TONIC. Carries governance rights and a share of protocol revenue. See xTONIC & governance.
Liquidity mining
Distributing token rewards (TONIC) to suppliers and borrowers to bootstrap activity. These rewards are emissions and dilute supply over time.
Governance
The process by which xTONIC holders vote on protocol decisions — asset listings, risk parameters, treasury and upgrades.
General DeFi
Cronos
The EVM-compatible blockchain Tectonic runs on, linked to the Crypto.com ecosystem. See the Cronos ecosystem page.
TVL (total value locked)
The total value of assets deposited in a protocol — a rough gauge of size and usage.
Stablecoin
A token designed to track a stable value, usually the US dollar (USDC, USDT, DAI, TUSD). Lower price risk, but not zero — pegs can break.
Wrapped asset
A token representing another asset on a different chain, such as WBTC (Bitcoin) or WETH (Ether), so it can be used in DeFi.
Smart contract
Self-executing code on a blockchain. It enforces the protocol's rules without an intermediary — and any bug in it is a risk.