Glossary

AMM (Automated Market Maker)

A protocol that uses mathematical formulas and liquidity pools to determine token prices, enabling instant swaps without a traditional order book.

APY (Annual Percentage Yield)

The annualised rate of return on a supplied or borrowed asset, accounting for compounding. APY fluctuates based on market demand.

Collateral

Assets deposited into the lending protocol that secure your borrowing position. If the value of your collateral drops too low, it may be liquidated.

Collateral Factor

The percentage of your supplied asset that can be used as borrowing power. A 75% collateral factor means $100 of collateral supports up to $75 of borrowing.

Concentrated Liquidity

A liquidity provision model where LPs allocate capital within specific price ranges rather than across the full price spectrum, improving capital efficiency.

EOA (Externally Owned Account)

A standard blockchain wallet controlled by a private key, such as MetaMask or Coinbase Wallet. Contrast with an embedded wallet managed by a service like Privy.

Funding Rate

A periodic payment between long and short perpetual contract holders that keeps the contract price aligned with the spot price of the underlying asset.

Gas Fee

A fee paid to the network for processing your transaction. On the 0G Network, gas is paid in native A0GI tokens.

Health Factor

A numerical indicator of your lending position safety. Above 1.0 is safe; at or below 1.0, your position is at risk of liquidation.

Leverage

Trading with a position size larger than your deposited margin. For example, 3x leverage means a $1,000 deposit controls a $3,000 position.

Liquidation

The forced closure of a position when collateral value falls below the required threshold. In lending, a portion of your collateral is seized to repay debt. In perpetuals, your margin is forfeited.

Liquidity Pool

A collection of tokens locked in a smart contract that enables decentralised trading. Liquidity providers deposit tokens and earn fees from trades.

Mark Price

An oracle-derived price used to calculate PnL and liquidation levels for perpetual contracts. Prevents manipulation from thin order books.

Margin

The collateral deposited into a perpetual trading account to open and maintain leveraged positions.

Open Interest

The total value of all outstanding perpetual contract positions in a given market.

Perpetual Contract

A derivative contract that tracks the price of an underlying asset with no expiry date. Positions can be held indefinitely as long as sufficient margin is maintained.

PnL (Profit and Loss)

The gain or loss on a position. Unrealised PnL is the current gain/loss based on the mark price. Realised PnL is locked in when you close a position.

Price Impact

The effect your trade has on the market price. Larger trades relative to available liquidity result in higher price impact.

Slippage

The difference between the expected price and the actual execution price of a swap. Slippage tolerance sets the maximum acceptable deviation.

Utilisation Rate

The percentage of supplied assets in a lending pool that are currently being borrowed. Higher utilisation leads to higher interest rates.