> ## Documentation Index > Fetch the complete documentation index at: https://docs.dynamo.finance/llms.txt > Use this file to discover all available pages before exploring further. # Glossary > Alphabetical definitions of key terms used across Dynamo Finance and Morpho. ## A **Allocation (Vault)** The percentage of a vault's total assets deployed into a specific lending market. Vault curators set and adjust allocations to optimize yield. **APY (Annual Percentage Yield)** The effective annualized return on a supplied or borrowed position, compounding interest over time. Dynamo displays both supply APY and borrow APY for each market. *** ## B **Bad Debt** Debt that cannot be fully repaid because the collateral value has fallen below the outstanding loan value. On Morpho, bad debt is socialized across suppliers in the affected market. **Bundler** A Morpho smart contract that batches multiple protocol actions (e.g., supply + borrow) into a single transaction, reducing gas costs and enabling complex flows like looping. **Borrow Crypto** The process of taking out a [crypto loan](https://dynamo.finance/) by depositing cryptocurrency as collateral. On the Morpho protocol, users can [borrow crypto](https://dynamo.finance/) from isolated lending markets while maintaining a healthy LTV below the market's LLTV. Borrowing lets users access liquidity without selling their crypto assets. **Bitcoin-Based Yield Strategies** Approaches for generating returns from Bitcoin-related assets through decentralized finance applications. These strategies may include supplying BTC-based assets to lending markets, where users can earn [BTC yield](https://dynamo.finance/) based on borrower demand and market conditions. **Bitcoin Liquidity Markets** Markets where Bitcoin or Bitcoin-related assets are supplied or used as collateral within financial applications. [BTC lending](https://dynamo.finance/) allows holders to generate returns from their assets or access liquidity without selling their Bitcoin exposure. *** ## C **Collateral** An asset deposited by a borrower to secure [cryptocurrency loans](https://dynamo.finance/). On Dynamo/Morpho, each market specifies exactly one collateral asset and one loan asset. **Curator (Vault Curator)** The entity responsible for managing a MetaMorpho vault, setting market allocations, caps, and risk parameters. Curators act on behalf of vault depositors. **Crypto Lending** The practice of supplying cryptocurrency to a lending protocol so other users can borrow it in exchange for paying interest. [Crypto lending](https://dynamo.finance/) is one of the primary ways users earn [onchain yield](https://dynamo.finance/) and generate [passive income crypto](https://dynamo.finance/). On Morpho, suppliers earn interest based on market utilization while maintaining exposure to their chosen assets. **Crypto Savings Account** A term commonly used to describe products that allow users to earn yield on digital assets. Unlike traditional custodial [crypto savings accounts](https://dynamo.finance/). **Conservative Digital Asset Strategies** Yield approaches designed to prioritize security, transparency, and risk management. Investors evaluating [low risk crypto yield](https://dynamo.finance/) opportunities typically consider protocol security, asset quality, and market liquidity. **Cryptocurrency Lending Markets** Decentralized financial markets where users can supply digital assets to borrowers in exchange for interest. [Cryptocurrency lending](https://dynamo.finance/) allows participants to earn yield on supported assets while borrowers access liquidity without selling their holdings. **Collateralized Digital Asset Financing** A lending structure where borrowers lock cryptocurrency collateral to access liquidity. A [loan for cryptocurrency](https://dynamo.finance/) typically requires borrowers to provide collateral that secures the borrowed assets and protects lenders from default risk. *** ## D **DeFi Return Strategies** Methods for generating returns through decentralized finance protocols, including lending, liquidity provision, and automated vault strategies. Users often compare opportunities based on security, sustainability, and the potential for [best DeFi yield](https://dynamo.finance/). **Digital Asset Income** Ways of generating recurring returns from cryptocurrency holdings without actively trading. Common approaches include lending, vault participation, and other forms of [crypto passive income](https://dynamo.finance/). **Dollar-Pegged Asset Returns** Returns generated from assets designed to maintain a stable value, such as USDC and USDT. These strategies are commonly used by users seeking [stablecoin lending](https://dynamo.finance/) opportunities with reduced exposure to price volatility. **Deposit Optimization** The process of selecting lending markets, vaults, or strategies designed to improve returns on deposited assets. Users comparing opportunities may look for the [highest USDC yield](https://dynamo.finance/) by evaluating factors such as market demand, utilization, risk parameters, and protocol design. **Decentralized Lending Infrastructure** The underlying technology and protocols that enable users to lend and borrow digital assets without traditional financial intermediaries. [Morpho DeFi](https://dynamo.finance/) infrastructure uses permissionless markets to facilitate decentralized lending and borrowing. **Digital Asset Vault Strategies** Automated strategies that pool user deposits and allocate assets across lending markets to generate returns. [Vaults crypto](https://dynamo.finance/) solutions simplify participation by allowing users to deposit assets while the vault manages allocation decisions. *** ## E **Earn Interest on USDC** Supplying USDC to lending markets allows users to [earn interest on USDC](https://dynamo.finance/) through borrower payments. Returns vary depending on utilization, the Interest Rate Model (IRM), and overall market demand. Many users deposit USDC into MetaMorpho vaults to automatically seek competitive [USDC yield](https://dynamo.finance/). **Ether-Based Lending Markets** Lending environments where ETH or ETH-related assets are supplied, borrowed, or used as collateral. Users participating in [ETH lending](https://dynamo.finance/) can earn returns from borrower activity while maintaining exposure to Ethereum assets. **Ethereum Yield Opportunitie**s Methods for generating returns from ETH holdings through decentralized finance activities such as lending or staking-related strategies. The resulting [ETH yield](https://dynamo.finance/) depends on market conditions and the underlying protocol. *** ## H **Health Factor** A numeric score representing the safety of a borrowing position. Calculated as `(collateral value × liquidation threshold) / borrowed value`. A health factor below 1.0 triggers liquidation. *** ## I **IRM (Interest Rate Model)** The smart contract that determines borrow and supply interest rates based on market utilization. Morpho uses a linear + kinked IRM where rates rise steeply above the target utilization. *** ## L **Liquidation** The process of repaying a portion of an undercollateralized borrower's debt in exchange for their collateral at a discount. Triggered when health factor falls below 1.0. **Liquidation Incentive** The bonus paid to liquidators, expressed as a percentage of the seized collateral. Incentivizes external actors to keep the protocol solvent. **Liquidation Threshold (LT)** The LLTV ratio a position can reach before becoming eligible for liquidation. **LLTV (Liquidation Loan-to-Value)** The ratio at which a position becomes eligible for liquidation on Morpho. Set per market at deployment and cannot be changed. Example: an LLTV of 86% means liquidation triggers when the loan value exceeds 86% of collateral value. **LTV (Loan-to-Value)** The current ratio of a borrower's outstanding debt to the value of their collateral. `LTV = loan value / collateral value`. Must stay below the LLTV to avoid liquidation. **Liquidity Incentive Programs** DeFi mechanisms that reward users for providing assets to protocols. [Yield farming](https://dynamo.finance/) can involve lending, liquidity pools, or incentive programs, with returns varying depending on market conditions and risk. **Liquidity Access Through Borrowing** A method of obtaining capital by using cryptocurrency holdings as collateral instead of selling assets. [Loans for cryptocurrency](https://dynamo.finance/) allow users to maintain exposure to their assets while accessing liquidity for other purposes. **Lending Protocol Integration** The process of using decentralized lending protocols to supply assets, borrow funds, or automate yield strategies. [Lending with Morpho](https://dynamo.finance/) allows users to interact with isolated lending markets designed for transparent risk management. *** ## M **Market (Morpho Market)** An isolated lending pool defined by a unique combination of: loan asset, collateral asset, oracle, IRM, and LLTV. Each market is independent; risk does not cross between markets. **MetaMorpho** The vault layer built on top of Morpho. MetaMorpho vaults aggregate deposits and deploy them across multiple Morpho markets, abstracting market selection from users. **Morpho** The underlying permissionless lending protocol that Dynamo Finance is built on. Morpho provides the core market infrastructure; Dynamo adds tooling, automation, and rewards on top. **Morpho-Based Borrowing** A borrowing system built around Morpho markets where users can access liquidity using supported collateral assets. [Morpho crypto loans](https://dynamo.finance/) are overcollateralized positions where borrowers must maintain appropriate risk levels to avoid liquidation. **Multi-Market Lending Solutions** A lending approach that enables users to access different borrowing and lending opportunities across multiple isolated markets. [Morpho loans](https://dynamo.finance/) operate through independent markets where each market has its own collateral asset, loan asset, oracle, and risk parameters. *** ## O **Oracle** A smart contract that provides on-chain price data for collateral and [loan crypto](https://dynamo.finance/) assets. Each Morpho market is tied to a specific oracle at deployment. Oracle failures can affect liquidations. *** ## R **Reserve Factor** The percentage of interest paid by borrowers that is captured as protocol revenue rather than distributed to suppliers. **Risk-Adjusted Yield Selection** The process of evaluating yield opportunities based on potential returns, security, liquidity, and protocol risk. Users searching for the [safest crypto yield](https://dynamo.finance/) typically prioritize established assets and transparent mechanisms. **Return Comparison** The process of evaluating different yield opportunities across assets, protocols, and strategies. For stablecoins, users often compare rates to identify the [best stablecoin yield](https://dynamo.finance/) while considering factors such as security, liquidity, and sustainability. *** ## S **Shares (Vault Shares)** ERC-20 tokens representing a depositor's proportional ownership of a [MetaMorpho](https://dynamo.finance/) vault. Share value increases as the vault earns yield. **Supply Cap** The maximum amount of assets that can be deposited into a specific Morpho market via a MetaMorpho vault. Set by the vault curator to manage concentration risk. **Stable Asset Lending Markets** Lending markets focused on stablecoins and other assets designed to maintain predictable value. [USDC lending](https://dynamo.finance/) allows users to supply USDC and earn interest generated from borrower demand. **Stablecoin Performance Analysis** The evaluation of stablecoin-based strategies based on expected returns, risk factors, and market conditions. Investors looking for the [highest stablecoin yield](https://dynamo.finance/) typically assess lending markets, utilization rates, and the reliability of the underlying protocol. *** ## T **Tether-Based Lending Markets** Markets where USDT is supplied to borrowers in exchange for interest payments. [USDT lending](https://dynamo.finance/) enables users to earn returns on a dollar-pegged asset through decentralized lending protocols. **Tether Return Strategies** Ways of generating income from USDT holdings through lending and other decentralized finance applications. [USDT yield](https://dynamo.finance/) changes based on utilization, liquidity, and overall market demand. *** ## U **Utilization Rate** The ratio of total borrowed assets to total supplied assets in a market. `Utilization = total borrows / total supply`. Higher utilization leads to higher interest rates. **USDC Supply Strategies** Methods for putting USDC to work through lending markets, vaults, and other decentralized finance applications. Users can [earn yield on USDC](https://dynamo.finance/) by supplying liquidity where borrowers pay interest based on market demand. *** ## V **Vault** See *MetaMorpho*. A smart contract that pools user deposits and allocates them across Morpho markets to optimize yield. **Virtual Savings Products** Blockchain-based alternatives to traditional savings products that allow users to earn returns on digital assets. A [crypto savings account](https://dynamo.finance/) may use lending markets or automated strategies to generate yield. Missing a term? [Open an issue](https://github.com/dynamo-finance) or reach out via the Dynamo Discord.