What does Oxidation mean?

In terms of raw denim, oxidation occurs when indigo yarn comes out of the indigo bath between dips and comes into contact with oxygen.

Heddels explains Oxidation

Oxidation is part of the dyeing process. It happens once the dyed yarn is removed from the dye bath and exposed to the air, and turns the indigo dye from a greenish-yellow back to its original deep blue color.

Oxidation also ensures that the dye color is permanently fixed to the fiber.

Additional Resources

Indigo-dyed yarn undergoing the oxidation process: