# Glossary

### BitU 

BitU or BitU Protocol refers to the protocol itself, including all aspects related to this protocol/application. 

### BITU (BitU USD) 

$BITU is the stablecoin of the BitU Protocol, a fully collateralized and decentralized on-chain stablecoin. The token is represented as either BITU or $BITU, where the dollar sign ($) indicates it is a token rather than the project name. 

Both BITU and $BITU are written in uppercase letters, whereas the project name BitU is styled with only the '**B**' and '**U**' capitalized.

### sBITU (Staked BITU) 

$sBITU represents staked BITU, acquired by depositing $BITU into the `BitUStaking` Contract. Holding $sBITU enables users to profit from BitU's ALMM. Stakers can convert $sBITU back to $BITU at any time by burning $sBITU and after a cooldown period.

### Mint 

The process involves users minting new $BITU by providing collateral. After minting, this action creates a Mint Position for the user, which can be accessed and reviewed anytime on BitU's positions dashboard page.

### Redeem 

Redeem refers to the process where minters burn the minted $BITU to reclaim their collateral. Following redemption, the user's Mint Position is closed.

### Collaterals 

Collaterals are the crypto assets supported by the BitU Protocol to back the minting of the $BITU stablecoin. Once minted, all collaterals are stored in custody addresses, and only minters have the authority to withdraw them.

### Collateral Ratio (CR) 

The collateral ratio (CR) represents the ratio of the collateral value to the value of the $BITU minted. In the BitU Protocol, each user or address maintains a specific collateral ratio for each type of collateral used.

*For example, when a user mints $BITU using $BTC as collateral, it establishes a $BTC Mint Position. Typically, a higher collateral ratio suggests a healthier Mint Position, indicating a lower risk of liquidation.*

### Default Collateral Ratio 

The default collateral ratio, suggested by the BitU Protocol when minters use collaterals to mint $BITU, serves as a critical measure, indicating the portion of the collateral's value that is available to be minted against.

*For instance (i.e.), if the collateral provided is $BTC and the default collateral ratio is 200%, Meaning for every $200 worth of $BTC used as collateral, a minter by default can mint $100 worth of $BITU.*

### Minimum Collateral Ratio 

The minimum collateral ratio refers to the lowest collateral ratio permitted when minting $BITU. For $BTC, the minimum collateral ratio is set at 200%. 

This ensures that there is always a sufficient buffer of collateral to maintain the stability of the minted stablecoins against market fluctuations.

### Stake 

The process where users stake $BITU in the `BitUStaking` **Contract** to earn rewards. After staking, users receive $sBITU as a counterpart of staked $BITU, and retain the ability to convert $sBITU back to $BITU anytime by burning $sBITU.

Anyone can stake $BITU into the `BitUStaking` Contract to earn yield. This process does not require whitelisting status.

### Unstake 

Unstake refers to the process where users burn $sBITU to withdraw $BITU stored in the `BitUStaking` Contract. However, there is a 7-day cooldown period from initiation to unstaking the $BITU, during which the withdrawal cannot be completed.

### ALMM 

ALMM, or the Active Liquidity Management Module, oversees the mapping of user collaterals on exchanges and generates yields. 

It's important to note that ALMM exclusively manages the mapping of collaterals on centralized exchanges and does not have access to the actual assets stored in custody addresses.

### Custody addresses 

Custody addresses are where user collaterals are securely stored. In BitU's ecosystem, these addresses are transparent and accessible to users at any time. Users can verify that all circulating $BITU tokens are adequately backed by checking these addresses onchain.

### Liquidation 

In the BitU Protocol, liquidation occurs when a minter's collateral is sold on the open market to support circulating $BITU tokens. Liquidation is the process of selling collaterals on the open market to convert them into cash or cash equivalents. This process is initiated only when a user's (CR) collateral ratio falls below the liquidation threshold.

### Liquidation Threshold:

| **Asset** | **Default CR** | **Minimum CR** | **Liquidation CR** |
| --------- | -------------- | -------------- | ------------------ |
| Bitcoin   | 200%           | 200%           | 110%               |