# Explanation of Terminology * **Synthetic Assets:** An asset that has the same value as another asset. In NASDEX, synthetic assets are pegged to the price of real world equities. * **Mint:** The process of providing collateral and issuing a "synthetic" assets. * **Collateral Ratio (CR):** The ratio of the current value of the collateralized asset to the minted asset. The ratio that determines how much assets a user can mint. * **Collateralized Debt Position (CDP):** A position created when the user deposits collateral to mint a synthetic asset. * **Minimum Collateral Ratio:** The minimum collateral ratio a user is required to maintain to prevent liquidation. * **Over Collateralized:** When the value of the collateral is higher than the value of the minted asset. * **Short Selling:** The act of selling a borrowed asset. In NASDEX, short farming is done by immediately selling a newly minted asset. * **Premium:** The difference between the price of the synthetic asset on NASDEX and the real world asset. * **Margin Call and Auction:** Users can choose a lower collateral ratio to mint more nAssets with less collateral, but it comes with the risk of getting liquidated. A CDP can be margin called when it falls below the minimum collateral ratio. At that stage, if the owner does not quickly respond by adding more collateral or burning nAssets to deleverage their position, other users may purchase their CDP's collateral at a discount. The NASDEX system will try to raise user's CDP's collateral ratio by burning nAssets until it recovers from liquidation. * **Redeem:** To retrieve their assets that were collaterized, user needs to burn the same amount of nAssets as originally minted. Partial redemption is also possible by burning a partial amount of nAssets that were minted. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://nasdexofficial.gitbook.io/nasdex/technology/explanation-of-terminology.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.