Definitions

Glossary of Common Terms for The INC Printer 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.

INC: A key token on PulseChain, used as the primary collateral asset for The INC Printer Protocol. INC is issued as yield on Pulsex V1 farms.

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

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

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

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

Collateral Ratio: The current US Dollar value of the INC tokens locked up in the Vault divided by the amount of INCD 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 INCD debt recorded in a Vault.

Total active collateral: The sum of active collateral over all Vaults. Equal to the INCD in the Active Pool.

Total active debt: The sum of active debt over all Vaults. Equal to the INCD in the Active Pool.

Total defaulted collateral: The total INCD collateral in the Default Pool.

Total defaulted debt: The total INCD debt in the Default Pool.

Entire system collateral: The sum of the collateral in the Active Pool and Default Pool.

Entire system debt: The sum of the debt in the Active Pool and Default Pool.

Total Collateralization Ratio (TCR): The ratio of the dollar value of the entire system collateral at the current INC: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 INCD tokens to their own address. They “borrow” INCD tokens against their INC collateral.

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

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

When INCD is redeemed for INC, the INC 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 INCD for INC.

Repayment: When a borrower sends INCD 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 INC collateral from their own Vault, either reducing their collateralization ratio or closing their Vault (if they have zero debt and withdraw all their INC).

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 INC 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 INC collateral and the dollar value of its INCD debt. In a full liquidation, this is the net gain earned by the recipients of the liquidation.

Offset: Cancellation of liquidated debt with INCD 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 INCD in the Stability Pool, and all of its liquidated INC collateral is assigned to Stability Providers.

Mixed offset and redistribution: When the Stability Pool INCD only covers a fraction of the liquidated Vault's debt. This fraction of debt is canceled with INCD 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 INCD and INC, 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.