Glossary

Liquidity Bits

Representation of a users contribution to an asset pool.

Pool

A Smart Contract representing two types of tokens which users interact with to perform trading of tokens.

KYC

Know your customer or know your client (KYC) are guidelines within financial services that require the verification of a users identity.

DEX

DEX is short form for decentralized exchange.

XCMP

Cross chain message passing (XCMP) is a method of communications with external blockchains currently under development by Polkadot.

Parachain

A parachain is a simplistic blockchain that attaches to the security provided by a relay chain in order to perform its own independent computation.

CFMM

Constant function market makers are based on a function whose (output) value is the same for every input value.

Example:

$$y(x)=4$$

AMM

Automated market makers allow assets to be traded in a permissionless and automatic way via algorithms and liquidity pools.

Smart Contract

A smart contract is a self-executing contract that operates on terms defined within its code.

Synthetic Asset

A synthetic asset is a term that is used to describe a variety of assets represented as a single asset without the asset holder having to hold the underlying asset.

Game Theory

Game theory refers to a framework to perceive theoretical outcomes between the strategies of independently competing parties.

LMSR

A Logarithmic Market Scoring Rule is used to compute the current price of an asset in a prediction market as well as the cost to trade an asset between a trader and a market maker.

Substrate

Substrate is a generic modular blockchain template architecture that allows the creation of custom blockchain networks.

Hyper Collateralization

Hyper collateralization is a term used for when the ratio of collateral against the value of an asset is grossly out of proportion, surpassing the term of over collateralization.

Penalty Pool

A pool representing liquidity tokens from users who called the withdraw function prior to their liquidity contract reaching maturity.