> ## Documentation Index
> Fetch the complete documentation index at: https://docs.trecc.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Definitions of key terms used throughout the TRECC documentation

## A

**Adapter**
A smart contract that translates agent instructions into protocol-specific calls. Adapters are audited and whitelisted - agents can only interact with DeFi through these approved intermediaries.

**Agent Operator**
The human who deploys and manages a TRECC AI agent. The operator posts collateral, configures the agent's strategy, and bears financial responsibility for the agent's actions.

**Agent Registry**
The on-chain smart contract that records every registered agent - linking its operator, signing key, and wallet address. Mints identity tokens upon registration.

**APY (Annual Percentage Yield)**
The annualised rate of return on a deposit, including compounding. If a protocol offers 8% APY, a $1,000 deposit would earn approximately $80 over a full year.

## B

**Bad Debt**
A loss that exceeds the agent's posted collateral. When this happens, the Insurance Fund covers the shortfall so lenders don't absorb the loss.

**Base Sepolia**
An Ethereum Layer 2 testnet where the TRECC Vault and agent wallets operate. Used for testing before mainnet deployment.

## C

**Collateral**
USDC locked by an operator in the Risk Engine as a security deposit. If the agent loses money, the collateral absorbs the loss before lender funds are affected.

**Composable**
A property of tokens and protocols that allows them to interoperate - one protocol's output token can be used as input to another. tUSDC is composable because it follows the ERC-4626 standard.

## D

**DeFi (Decentralised Finance)**
Financial protocols built on blockchains that operate without centralised intermediaries. Examples include Aave (lending), Uniswap (trading), and Compound (lending).

**Defence in Depth**
A security strategy using multiple independent layers of protection. If one layer is breached, others continue to function. TRECC uses five layers: hardware isolation, execution module, whitelist, risk limits, and insurance.

## E

**ERC-20**
The standard interface for fungible tokens on Ethereum. USDC and tUSDC are both ERC-20 tokens.

**ERC-721**
The standard interface for non-fungible tokens (NFTs) on Ethereum. TRECC uses ERC-721 for agent identity tokens.

**ERC-4626**
A standard for tokenised yield-bearing vaults. The TRECC Vault follows this standard, issuing tUSDC shares that automatically appreciate as yield accumulates.

**ERC-8004**
A standard for autonomous agent identity and reputation. Defines how agents establish on-chain identity, accumulate reputation, and have that reputation verified by other protocols.

**Ecosystem Integration**
An external tool, network, or protocol that TRECC connects to. Examples include wallet infrastructure, key management providers, or DeFi lending protocols.

**Execution Module**
The smart contract "leash" between an agent's signer and its wallet. Intercepts every transaction and only allows calls to whitelisted adapters.

## H

**Hardware Security Enclave (HSE)**
A tamper-proof hardware chip that generates and stores cryptographic keys. The key never leaves the chip - all signing operations happen internally. Used to protect agent signing keys.

**Health Factor**
A measure of how safe an agent's position is relative to its obligations. When health drops below the critical threshold, automated liquidation is triggered.

## I

**Insurance Fund**
A protocol reserve that covers bad debt - losses exceeding an agent's collateral. Funded by fees from successful agent trades. Only the Risk Engine can draw from it.

## L

**Liquidation**
The automated process of force-closing an agent's position when its health factor drops below the safety threshold. Recovered capital is returned to the vault, and losses are deducted from collateral.

**Liquidity Provider (LP)**
A user who deposits capital into the TRECC Vault. LPs earn yield from AI agent activity without actively managing positions. Also called "lenders."

## M

**Minting**
Creating a new token on-chain. In TRECC, the Agent Registry "mints" an identity NFT when a new agent is registered.

## O

**On-chain**
Data or logic that lives directly on the blockchain - publicly verifiable, immutable, and not controlled by any single entity.

**Overcollateralised**
A lending model where borrowers must deposit more collateral than they borrow (e.g., deposit $150 to borrow $100). Most DeFi lending protocols work this way. TRECC is the opposite - undercollateralised.

## P

**Prompt Injection**
An attack where a malicious input tricks an AI into performing unintended actions. In TRECC, the Execution Module and whitelist prevent prompt injection from having any effect on fund movement.

## R

**Reputation Score**
A numerical score stored on-chain that reflects an agent's borrowing history. Increases with successful repayments, decreases sharply with liquidations. Determines borrowing capacity and collateral requirements.

**Risk Engine**
The smart contract gatekeeper that authorises all borrows from the vault. Checks identity, reputation, and collateral before releasing capital. Also monitors health factors and triggers liquidations.

## S

**Smart Wallet**
A programmable wallet implemented as a smart contract (rather than a simple private key). Allows complex access controls like the Execution Module to be attached permanently.

**Soulbound**
A token that cannot be transferred after minting. TRECC agent identity tokens are soulbound - they permanently belong to the agent that registered them.

## T

**tUSDC**
The receipt token issued by the TRECC Vault when USDC is deposited. Represents proportional ownership of vault assets. Appreciates in value as yield accumulates.

**TRECC Vault**
The shared capital pool where lenders deposit USDC and agents borrow from. Implements ERC-4626 for standardised share accounting.

## U

**Undercollateralised**
A lending model where borrowers post less collateral than they borrow (e.g., post $650 to borrow $5,500). Higher capital efficiency but requires additional safeguards - which is what TRECC provides.

**USDC**
A stablecoin pegged 1:1 to the US dollar. The base currency used throughout the TRECC protocol for deposits, borrowing, and repayments.

## W

**Whitelist**
A registry of approved smart contracts that agents are permitted to call. Any transaction targeting a non-whitelisted address is automatically rejected by the Execution Module.