# Amply Finance Terminology

### Understanding aTokens and Debt Tokens 

* aTokens: As mentioned earlier, aTokens represent your share of a lending pool and any accrued interest on your deposited crypto asset. As you earn interest, your aToken balance will increase over time. They are tradable and can be used in DeFi applications that integrate with Amply. aTokens will be burnt when you withdraw your assets. 
* Debt Tokens: When you borrow an asset on Amply, you receive a corresponding debt token representing your outstanding loan obligation. This includes the principal borrowed amount and any accrued interest. Debt tokens are not tradable. These debt tokens will be burnt upon repayment of your debt.

### Health Factor

The Health Factor (HF) represents the health of your debt position - the higher the value, the safer your position is from getting liquidated. A health factor above 1 means that you are not yet at the point of getting liquidated. However, it is typically recommended to maintain a HF of above 3 in order to lower your chances of getting liquidated. 

HF = SUM\[(Collateral USD \* liquidation threshold)] / SUM(debt USD)

If HF < 1; a liquidation will be triggered

### Reserve Factor

Amply sets aside a Reserve Factor - a percentage of interest that is to be allocated to the ecosystem treasury. A riskier asset typically has a higher reserve factor.&#x20;

### Supply Caps

A supply cap is the maximum amount of an asset which can be supplied to the protocol. This parameter limits Amply’s exposure to a potentially risky asset. When a token’s supply cap is hit, you will be unable to deposit more of that asset.

### Borrow Caps

A borrow cap is the maximum amount of an asset which can be borrowed. This parameter can be used to prevent heavy borrowing of an asset in order to conduct a price exploit. &#x20;

### Net Weighted APR

Net APY is the weighted interest rate from supply and borrow positions, including incentives. Net APY may be negative if debt is higher than supply APY

Net Weighted APR = \[sum(USD supplied \* net supply APY) - sum(USD borrowed \* net borrow APY)] / sum(USD supplied)


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