🐧Definitions

Debt Market: Secondary market where users may sell their lending or borrowing position before the end of its term. This is possible due to Debita issuing 2 NFTs a receipt of ownership at the time an offer is accepted, one for the lender and one for the borrower. Moving the NFTs to a new wallet changes the owner of the debt and collateral respectively.

Annual Percentage Yield (APY): A percentage of the total amount of interest earned on a position over one year.

Default: When a borrower doesn't repay their loan by the due date. When this happens, the borrower forfeits their collateral to the lender.

Collateral: An asset that the borrower pledges to the lender as security for a loan. If the borrower defaults on the loan, the lender gets to claim the collateral.

Interest: Percentage of the borrowed amount the borrower pays to the lender for the duration of the loan. All loans on Debita have a fixed interest rate.

Loan-to-value (LTV): The dollar value ratio between collateral and borrowed amount. A lend ratio is a measure of how much a lender is willing to lend to a borrower, relative to the value of the collateral that the borrower is providing.

Perpetual: When the owed amount is paid back by the borrower, instead of being claimable by the lender, goes back into the offer, compouding the position.