Glossary

Core Concepts

Borrow Spoke

The borrower-facing Avana spoke that receives LP collateral, values positions, tracks debt, and coordinates borrowing and liquidation against Hub liquidity.

Invest Spoke

The lender-facing capital entry point that routes supplied assets into the Hub so Borrow Spokes can draw shared liquidity.

Hub

The shared monetary layer in Aave v4 that manages liquidity, reserves, accounting, and protocol-wide capital coordination across connected spokes.

Hub-and-Spoke Architecture

A design where shared capital lives in the Hub while collateral-specific logic is isolated in spokes. Avana uses this model because LP collateral needs venue-specific valuation and liquidation behavior.

Liquidation Node

A protocol-operated runtime that indexes active positions and serves as a specialized liquidation backstop for complex LP collateral.

LP & Collateral

LP Position

A liquidity position from a supported AMM. Depending on the venue, it may be a fungible LP token, a concentrated-liquidity NFT, or another approved pool-share format.

Collateral Factor

The portion of USD collateral value that may count toward borrowing power. In LP markets, this is applied at the position level rather than to the spoke as a whole.

Borrowing Capacity

The amount a user can borrow inside a Borrow Spoke after each deposited LP position has been valued, risk-adjusted, and added to the user’s aggregate capacity.

Allowed Pool

A governance-approved pool that meets admissibility requirements such as oracle coverage, liquidity depth, unwind quality, and spoke compatibility.

Loan-to-Value (LTV)

The borrowing ratio associated with collateral after Avana’s position valuation and pool-specific risk controls have been applied.

Debt & Interest

Debt Shares

The internal accounting unit used to track borrower obligations while interest accrues over time without rewriting every loan balance continuously.

Borrow Rate

The rate borrowers pay on outstanding debt. It reflects both shared Hub conditions and LP-specific risk considerations.

Utilization Rate

The proportion of borrowed liquidity relative to available supply in the relevant Hub-connected capital layer.

Risk Premium

The risk-specific component layered on top of base borrowing conditions to reflect the LP collateral profile being financed.

Reserve Factor

The portion of protocol economics or interest flows reserved for the system rather than passed through entirely to liquidity suppliers.

Liquidation

Health Factor

The ratio between adjusted collateral value and outstanding debt inside a Borrow Spoke. When it falls too low, the position approaches liquidation eligibility.

Liquidation

The process of repaying debt against an unhealthy LP-backed position, unwinding enough collateral to restore solvency, and returning any residual value after settlement.

Liquidation Bonus

The liquidation premium paid to the party that executes the unwind, compensating them for capital use, routing complexity, and execution risk.

Oracle & Transform

Oracle

Avana’s valuation engine for LP collateral. It combines external asset prices, LP position reconstruction, and recoverable-value safeguards.

Recoverable Value

The amount the protocol believes can realistically be realized during a stressed unwind after liquidation slippage, pool conditions, and risk buffers are considered.

Transform

A controlled modification of a collateralized LP position, such as a rebalance or range change, that is only allowed when the resulting position still satisfies protocol health checks.

Risk & Security

Pool Approval

The rule that only pre-approved pools may be admitted as collateral, limiting exposure to unsupported or weakly monitored markets.

Recovery Haircut

A valuation discount applied so borrow power reflects recoverable unwind value rather than optimistic theoretical NAV.

Exposure Caps

Risk limits that bound borrowable exposure by pool family, collateral class, or liquidity depth.

Circuit Breaker

A risk control that can pause or restrict actions when prices, market behavior, or protocol dependencies become inconsistent or unsafe.

Governance Safety

The set of review, timelock, veto, and emergency roles used by the Risk Framework to keep parameter changes disciplined.

Reentrancy Protection

The contract-level protection that prevents a state-changing workflow from being entered again before the first execution is complete.

Metrics

TVL

Total value of assets supplied as LP collateral or capital across Avana-connected components.

Outstanding Debt

The amount currently borrowed against approved collateral positions.

Borrow Utilization

The share of available Hub liquidity that has been drawn by borrowers.

Borrowing Headroom

The difference between a user’s current debt and remaining aggregate borrowing capacity inside a Borrow Spoke.

Residual Value

Any value left in a position after debt, liquidation premium, and execution costs have been settled.

Disclaimers