🔠Glossary

Definitions & Concepts

Collateral

Collateral is a term used to describe an asset that a user puts up as a security when borrowing funds from the Kinza Finance protocol. Deposited assets to Kinza Finance can be switched on for use as collateral. The use of a collateral-based system is central to facilitating decentralized and anonymous borrowing activities without intermediaries.

DeFi Wallet

A DeFi (Decentralized Finance) wallet is a digital wallet that allows users to store, send, and receive cryptocurrencies and other digital assets. DeFi wallets allow investors to maintain full custody of their assets, and are specifically designed for use with DeFi applications and protocols. A DeFi wallet is required for activities on Kinza Finance.

Flash Loans

Flash loans are loans that allow users to borrow cryptocurrency without collateral for a short period, enabling arbitrage and other trading strategies. Flash Loans are programmed to borrow and repay with interest and fees in a single transaction. A user must develop and program the contract perfectly to interact with all necessary protocols, and ensure the loan is repaid.

Health Factor

Health factor is a metric used on the Kinza Finance platform to measure the health of a user's account. It is calculated by dividing the value of a user's collateral by the amount of their outstanding debt. Users need to monitor and adjust their positions to maintain a high health factor to avoid liquidation.

Liquidity Pools

Liquidity pools are DeFi smart contracts that hold cryptocurrency reserves. Liquidity pools are used in different DeFi protocols. On a Decentralized Exchange (DEX), liquidity pools are used to enable trading without intermediaries and power Automated Market Making (AMM). On Kinza Finance, liquidity pools are the contracts that house the digital assets in each lending market that users deposit to, and borrow from.

Liquidation

Liquidation is the process by which a third-party repays a portion of a borrower's debt to return the borrower to a healthy account. This happens when the value of the borrower collateral drops below a certain threshold, or when their health factor falls below a certain level.

Permissionless

Kinza Finance is a permissionless system, meaning access to Kinza Finance is universal and equitable. The sequence of actions available to users of the platform occur automatically and according to pre-defined parameters. Yes, until blockchain and DeFi (Decentralized Finance), financial institutions require applicants to go through red tape, submit personal information, and be convinced to give permission to those applicants to take advantage of financial products and services. It is time for a more equitable approach. At Kinza Finance, priority is to create and maintain a sustainable ecosystem with innovative mechanisms to innovate and improve upon decentralized lending.

Smart Contract

A smart contract is a self-executing contract, with the terms of the agreement between all parties, and intended actions, directly written into lines of code. Smart contracts function like customized software that runs on a blockchain. In DeFi, smart contracts are used to automate financial transactions, such as lending and borrowing, without intermediaries.

Yield

Yield is the return on investment generated by an asset. In DeFi, yield often refers to the interest earned by lending assets on a DeFi lending protocol. Kinza Finance offers Real Yield to incentivize borrowers and stimulate sustainable liquidity.