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description: Here you can learn the Kolektivo vocabulary.
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# Glossary

<table><thead><tr><th></th><th></th><th data-hidden></th></tr></thead><tbody><tr><td>Arbitrage</td><td>The act of buying an asset in one market and selling it in another to profit from  differences in asset price.</td><td></td></tr><tr><td>Asset</td><td>Any ERC20 or ERC721 (NFT) tokens held in the treasury or reserve.</td><td></td></tr><tr><td>Basis Point</td><td>A common unit of measure for percentages in finance.</td><td></td></tr><tr><td>Bonds</td><td>A mechanism where a Reserve acquires assets in exchange for the reserve token, presumably at a discounted rate.</td><td></td></tr><tr><td>Collateral</td><td>Assets that back a currency, e.g. Reserve Assets are used to back kCUR (the Kolektivo Curaçao Reserve Token).</td><td></td></tr><tr><td>Collateralization</td><td><p>(Verb) The act of using an asset to back a currency. </p><p>(Noun) The degree to which a currency is backed by a group of assets, e.g. the degree to which kCUR is backed by Reserve Assets.</p></td><td></td></tr><tr><td>Collateralization Ratio (also: backing)</td><td>The ratio of backing-assets to the currency being backed, e.g. the total value of Reserve Assets in ratio to the kCUR Fully Diluted Market Cap.</td><td></td></tr><tr><td>Ceiling Multiplier</td><td>A value used to calculate the Price Ceiling by multiplying the current Price Floor.</td><td></td></tr><tr><td>Community Economy</td><td>A local economy that uses the tools proposed by the Kolektivo Framework.</td><td></td></tr><tr><td>Depeg</td><td>Term used when a previously instituted peg on a currency has been removed.</td><td></td></tr><tr><td>Kolektivo Curaçao</td><td>The first Kolektivo community economy located on the island nation-state of Curaçao.</td><td></td></tr><tr><td>Kolektivo Framework</td><td>Proposed collection of institutional technologies that aim to open up new opportunities for local communities to govern and finance themselves.</td><td></td></tr><tr><td>Kolektivo Network</td><td>Polycentric structure of Kolektivo members, consisting of multiple stakeholder groups exercising different types of decisional authority at different scales.</td><td></td></tr><tr><td>Last Rebase Time</td><td>The last time that the Kolektivo Treasury Token was rebased.</td><td></td></tr><tr><td>Leverage Ratio</td><td>The ratio of currency-being-backed to backing-assets. In our case, for example, the ratio of kCUR market cap to the total value of Kolektivo Curacao Reserve Assets. AKA, the ratio between the total supply of kCUR to the total value of Reserve Assets, over time.</td><td></td></tr><tr><td>Maximum Leverage Multiplier</td><td>The Max Leverage Ratio, expressed as a multiplier.</td><td></td></tr><tr><td>Maximum Leverage Ratio</td><td>The desired maximum value of the Current Leverage Ratio.</td><td></td></tr><tr><td>Minimum Collateralization Ratio (also: minBacking)</td><td>The desired minimum value of the Current Collateralization Ratio.</td><td></td></tr><tr><td>Minimum Collateralization Value</td><td>The Minimum Collateralization Ratio, converted into USD.</td><td></td></tr><tr><td>Mint</td><td>The act of creating a token.</td><td></td></tr><tr><td>Peg</td><td>A pegged cryptocurrency is a currency whose value is linked to some external reference such as a specific bank-issued currency, financial instrument or tradable commodity.</td><td></td></tr><tr><td>Price Ceiling</td><td>The maximum desired value for a Reserve token, e.g. 1 kCUR, defined as a multiplier of the price floor. When the price exceeds the ceiling, further price increase is dampened by arbitrage opportunities.</td><td></td></tr><tr><td>Price Floor (also: Intrinsic Value)</td><td>The true value of a Reserve token, e.g. 1 kCUR, independent of market speculation, defined as the amount of reserve value that currently that backs 1 unit. When the price falls below the floor, further price decreases are dampened due to arbitrage opportunities.</td><td></td></tr><tr><td>Rebase</td><td>An automatically triggered action that adjusts the supply of the Kolektivo Treasury Token to match the total value of the treasury.</td><td></td></tr><tr><td>Redemption</td><td>A mechanism where a Reserve to sell assets at a discounted rate in exchange for the reserve token.</td><td></td></tr><tr><td>Reserve Asset </td><td>An asset held by the Reserve, e.g. the collateral used to back kCUR.</td><td></td></tr><tr><td>Spread</td><td>The difference in price between two markets for the same asset, typically expressed as a percentage.</td><td></td></tr><tr><td>Tobin Tax</td><td>A transaction tax applied to all Mento exchanges, presumably from the collateral reserve token to the community currency, e.g. kCUR/kG, paid with the “from” token in a “from-to” trade.</td><td></td></tr><tr><td>Treasury Asset</td><td>An asset held by the treasury.</td><td></td></tr></tbody></table>
