Glossary

Account Health / Health Factor
A measure of how safe a borrowing or minting position is relative to its collateral. If the health factor falls below a defined threshold, the position becomes eligible for liquidation.

ALTO
The native governance and value-accrual token of the Alto protocol. ALTO is used for staking, voting on governance proposals, and earning a share of protocol-generated fees.

Alto Governance and Staking (AGS)
The system through which ALTO holders participate in protocol governance and revenue sharing. ALTO is locked into “containers” with specific durations, granting voting power and eligibility for fee distribution.

Alto Reward Options (ARO)
The mechanism used to distribute rewards in Alto. Instead of free token emissions, users receive options that grant the right to purchase ALTO at a discounted price. Payments are made in DUSD or USDC and go to the protocol treasury.

Borrow Market
A type of lending market where DUSD is supplied by other users. Borrowers deposit collateral and draw DUSD from the pool, paying variable interest to lenders.

Collateral
Assets deposited into Alto markets as backing for borrowed or minted DUSD. Examples include ETH, liquid staking tokens, or yield-bearing tokens.

Container
A staking pool with a specific lock duration and voting power multiplier. Containers dynamically adjust their durations based on total value locked (TVL) and can be used to tailor governance participation strategies.

Debt Ceiling
A limit on the total amount of DUSD that can be minted in a specific market. It is a key risk parameter that controls supply expansion and isolates potential risk.

DUSD
The native stablecoin of Alto. DUSD is always treated as 1 USD inside the protocol for accounting, risk assessment, and liquidation calculations. It can be borrowed from liquidity pools or minted directly against collateral.

Dynamic Close Factor (DCF)
A mechanism that determines how much collateral is sold during a liquidation. Instead of liquidating the entire position, the protocol sells only the amount needed to restore a safe loan-to-value ratio.

Dynamic Liquidator Bonus (DLB)
A variable reward paid to liquidators. The bonus is calibrated to incentivize timely liquidations while avoiding excessive payouts.

Epoch
A fixed time period used by the staking system. At the end of each epoch, the protocol rebalances container lock durations based on participation.

Flash Leverage
A feature that allows a position to be opened at a target loan-to-value (LTV) in a single transaction, improving capital efficiency and removing the need for manual looping.

Interest Rate Model
The algorithm that determines borrowing costs in a market based on supply and demand for DUSD.

Liquidation
The process of selling a portion of a borrower’s collateral when their position becomes unsafe. Partial liquidations are used to restore healthy LTV levels without fully closing the position.

Loan-to-Value (LTV)
The ratio between the amount of DUSD borrowed or minted and the value of the collateral backing it. LTV is used to measure the safety of a position.

Merkle Root / Rewards List
A snapshot of reward allocations published periodically by the protocol. It defines how much ALTO each address can purchase at a discount during that reward period.

Mint Market
A type of lending market where new DUSD is created directly against collateral. Minted positions pay interest to ALTO stakers instead of liquidity providers.

Partial Liquidation
A liquidation method that sells only the portion of collateral necessary to restore a safe LTV, rather than liquidating the entire position.

Pause Mode
A reversible emergency state that temporarily disables staking, voting, and certain protocol functions. Used in critical situations to protect funds.

Protocol Fee
Revenue generated by the protocol, including borrowing fees, minting interest, and a share of liquidation proceeds. These fees are distributed to stakers.

Relock / Extend / Add to Position
Actions that allow users to manage their staking positions without withdrawing and redepositing. Relock renews an expired position, extend lengthens the lock period, and add increases the staked amount.

Rescue Mode
An irreversible emergency state that allows all stakers to withdraw their locked tokens immediately. Once activated, the contract must be redeployed to resume normal operation.

Staking Position
A locked amount of ALTO that grants voting power and fee distribution rights for a specified duration.

Total Value Locked (TVL)
The total amount of assets deposited in a specific market or container. In staking, TVL is used to rebalance lock durations at the end of each epoch.

Voting Power
The influence a staking position has in protocol governance. Voting power is determined by the amount of ALTO locked and the multiplier of the container it is in.