Key glossary

A list of words and phrases that help you understand Web3, crypto, DeFi and RWA industries:

Active pool: Investment pools with loans that are being serviced and yet to be fully paid back because borrowers are still using the loan funds within the specified loan term. Active pools can be open or closed for investment.
Accreditation: Investor accreditation is a regulatory designation that allows individuals and entities to access certain investments that are not available to many retail investors.
Accredited investors: Investors who meet certain regulatory requirements and are considered to be financially solvent enough to take on the risk of investing a large amount of capital in illiquid or risky investments.
AML: Anti-Money Laundering refers to laws, policies, regulations, processes that prevent criminals from using the financial system to commit crimes.
APY: Annual percentage yield is the interest rate earned on an investment over a year or annualized to a year time window.
Borrowers: Participants who raise capital from the protocol via Lending Pools.
Closed pool: Investment pools with loans that are fully paid back by borrowers or written off as losses after duly collection and liquidation processes.
Collection: A collection process is a series of events meant to encourage a loan borrower to pay its delinquent debt set in the loan agreement.
Collateral: Loan collateral is a valuable asset that a borrower pledges to a lender as security for a loan. If the borrower can't repay the loan, the lender can seize the collateral to recoup their losses.
Default: A loan default occurs when a borrower is unable to make scheduled payments on a loan and breaks the loan agreement.
ERC-20: a technical standard for creating and issuing smart contracts and fungible tokens on the Ethereum blockchain.
ERC-721: a technical standard that defines the rules and interfaces for creating and managing non-fungible tokens (NFTs) on the Ethereum blockchain.
Governance: Smart contract that is managed by the community DAO and has the ability to update the protocol via decentralized governance votes.
Grace period: A loan grace period is a set amount of time after a loan payment is due when a borrower can make their payment without penalty.
Investors: Participants who supply capital or funds to liquidity pools, also called investment pools or lending pools when the use case is borrowing and lending.
Investment Pool: another name for a Liquidity Pool.
KYB: Know Your Business refers to the due diligence review of a business to meet compliance requirements. It’s the KYC process for business entities.
KYC: Know Your Customer is a process that verifies the identity of customers to help prevent illegal activities like money laundering, fraud, and terrorist financing.
Lending Pool: Smart contract that encodes a set of financing terms for a Borrower, including the interest rate, duration, repayment schedule, and collateral information if applicable. A lending pool is a type of liquidity pool or investment pool when the purpose is to borrow and lend.
Liquidity pool: a collection of crypto held in a smart contract, and investors can add or remove liquidity, aka funds or capital. The purpose of the pool is to facilitate transactions such as borrowing and lending, sale of an asset, exchange of different tokens or assets. It’s interchangeable with the Investment Pool.
Liquidity provider: an entity or individual that supplies capital or fund to a liquidity pool on a decentralized finance (DeFi) platform. They enable transactions by ensuring there is sufficient liquidity, or the ability to buy and sell assets and get rewarded accordingly. It’s interchangeable with investors.
Liquidity Pool token: a receipt token that represents the investment of an investor and an ownership proof to redeem the underlying asset.
Loss: A loan loss refers to the amount of money that a lender or investor loses when a borrower fails to repay a loan according to the agreed-upon terms.
LTV: The Loan-To-Value ratio is a metric of dividing the loan amount by the appraised value of the collateral asset.
NFT: A non-fungible token is a digital identifier that's recorded on a blockchain and can be used to certify ownership and authenticity of an asset. For Ethereum blockchain, it often adopts the ERC-721 standard.
Protocol Owner: an entity or individual responsible for the creation, maintenance, and governance of a blockchain protocol or decentralized application (dApp). These protocols are sets of rules and standards that dictate how data is exchanged and transactions are conducted on a blockchain network.
Real-world assets or RWA: Assets that exist in Web2 world, not on blockchain, also called off-chain assets. Examples can include public credit such as government bonds, private credit such as business loans, physical assets such as real estate, luxury cars, watches, painting or liquor. This is in comparison to crypto native or on-chain assets.
Security auditor: a professional or firm that specializes in evaluating the security of blockchain technologies, smart contracts, decentralized applications (dApps). Their goal is to identify vulnerabilities and potential risks in the system code and architecture to ensure their integrity, reliability, and security.
Stablecoin: A stablecoin is a type of cryptocurrency that aims to maintain a stable value by pegging it to another asset. For example, USDC or USDT are stablecoins pegged to US Dollars.
Term: A loan term is the length or duration of time it takes to repay a loan, and it's usually agreed upon between the borrower and the lender.
Token: a crypto token is a digital identifier that represents value or utility and is built on an existing cryptocurrency's blockchain. For Ethereum blockchain, it often adopts the ERC-20 standard.
Underwriting: Loan underwriting is the process by which lenders assess the risk and determine the eligibility of a potential borrower for a loan. This process involves evaluating the borrower's creditworthiness, financial stability, and the value of any collateral offered.
Utility token: Token used for Governance votes, Auditor staking, Auditor vote rewards, and other potential rewards for all protocol participants.
Wallet: A cryptocurrency wallet is a device or program that stores your cryptocurrency keys and allows you to access your coins. Wallets contain an address and the private keys needed to sign cryptocurrency transactions.
Whitelisting: wallet whitelisting is a security practice that involves creating a list of approved wallet addresses that can be used to deposit and/or withdraw funds from an investment pool.

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Last updated 9 months ago

Key glossary

A list of words and phrases that help you understand Web3, crypto, DeFi and RWA industries:

Active pool: Investment pools with loans that are being serviced and yet to be fully paid back because borrowers are still using the loan funds within the specified loan term. Active pools can be open or closed for investment.
Accreditation: Investor accreditation is a regulatory designation that allows individuals and entities to access certain investments that are not available to many retail investors.
Accredited investors: Investors who meet certain regulatory requirements and are considered to be financially solvent enough to take on the risk of investing a large amount of capital in illiquid or risky investments.
AML: Anti-Money Laundering refers to laws, policies, regulations, processes that prevent criminals from using the financial system to commit crimes.
APY: Annual percentage yield is the interest rate earned on an investment over a year or annualized to a year time window.
Borrowers: Participants who raise capital from the protocol via Lending Pools.
Closed pool: Investment pools with loans that are fully paid back by borrowers or written off as losses after duly collection and liquidation processes.
Collection: A collection process is a series of events meant to encourage a loan borrower to pay its delinquent debt set in the loan agreement.
Collateral: Loan collateral is a valuable asset that a borrower pledges to a lender as security for a loan. If the borrower can't repay the loan, the lender can seize the collateral to recoup their losses.
Default: A loan default occurs when a borrower is unable to make scheduled payments on a loan and breaks the loan agreement.
ERC-20: a technical standard for creating and issuing smart contracts and fungible tokens on the Ethereum blockchain.
ERC-721: a technical standard that defines the rules and interfaces for creating and managing non-fungible tokens (NFTs) on the Ethereum blockchain.
Governance: Smart contract that is managed by the community DAO and has the ability to update the protocol via decentralized governance votes.
Grace period: A loan grace period is a set amount of time after a loan payment is due when a borrower can make their payment without penalty.
Investors: Participants who supply capital or funds to liquidity pools, also called investment pools or lending pools when the use case is borrowing and lending.
Investment Pool: another name for a Liquidity Pool.
KYB: Know Your Business refers to the due diligence review of a business to meet compliance requirements. It’s the KYC process for business entities.
KYC: Know Your Customer is a process that verifies the identity of customers to help prevent illegal activities like money laundering, fraud, and terrorist financing.
Lending Pool: Smart contract that encodes a set of financing terms for a Borrower, including the interest rate, duration, repayment schedule, and collateral information if applicable. A lending pool is a type of liquidity pool or investment pool when the purpose is to borrow and lend.
Liquidity pool: a collection of crypto held in a smart contract, and investors can add or remove liquidity, aka funds or capital. The purpose of the pool is to facilitate transactions such as borrowing and lending, sale of an asset, exchange of different tokens or assets. It’s interchangeable with the Investment Pool.
Liquidity provider: an entity or individual that supplies capital or fund to a liquidity pool on a decentralized finance (DeFi) platform. They enable transactions by ensuring there is sufficient liquidity, or the ability to buy and sell assets and get rewarded accordingly. It’s interchangeable with investors.
Liquidity Pool token: a receipt token that represents the investment of an investor and an ownership proof to redeem the underlying asset.
Loss: A loan loss refers to the amount of money that a lender or investor loses when a borrower fails to repay a loan according to the agreed-upon terms.
LTV: The Loan-To-Value ratio is a metric of dividing the loan amount by the appraised value of the collateral asset.
NFT: A non-fungible token is a digital identifier that's recorded on a blockchain and can be used to certify ownership and authenticity of an asset. For Ethereum blockchain, it often adopts the ERC-721 standard.
Protocol Owner: an entity or individual responsible for the creation, maintenance, and governance of a blockchain protocol or decentralized application (dApp). These protocols are sets of rules and standards that dictate how data is exchanged and transactions are conducted on a blockchain network.
Real-world assets or RWA: Assets that exist in Web2 world, not on blockchain, also called off-chain assets. Examples can include public credit such as government bonds, private credit such as business loans, physical assets such as real estate, luxury cars, watches, painting or liquor. This is in comparison to crypto native or on-chain assets.
Security auditor: a professional or firm that specializes in evaluating the security of blockchain technologies, smart contracts, decentralized applications (dApps). Their goal is to identify vulnerabilities and potential risks in the system code and architecture to ensure their integrity, reliability, and security.
Stablecoin: A stablecoin is a type of cryptocurrency that aims to maintain a stable value by pegging it to another asset. For example, USDC or USDT are stablecoins pegged to US Dollars.
Term: A loan term is the length or duration of time it takes to repay a loan, and it's usually agreed upon between the borrower and the lender.
Token: a crypto token is a digital identifier that represents value or utility and is built on an existing cryptocurrency's blockchain. For Ethereum blockchain, it often adopts the ERC-20 standard.
Underwriting: Loan underwriting is the process by which lenders assess the risk and determine the eligibility of a potential borrower for a loan. This process involves evaluating the borrower's creditworthiness, financial stability, and the value of any collateral offered.
Utility token: Token used for Governance votes, Auditor staking, Auditor vote rewards, and other potential rewards for all protocol participants.
Wallet: A cryptocurrency wallet is a device or program that stores your cryptocurrency keys and allows you to access your coins. Wallets contain an address and the private keys needed to sign cryptocurrency transactions.
Whitelisting: wallet whitelisting is a security practice that involves creating a list of approved wallet addresses that can be used to deposit and/or withdraw funds from an investment pool.

PreviousOur team NextFAQ

Last updated 9 months ago