📚┃Glossary
APR (Annual percentage rate)
A year-to-year interest rate that is generated without compounding.
APY (Annual percentage yield)
The real rate of return earned on an investment, taking into account the effect of compounding interest. Compounding interest is calculated periodically and the amount is immediately added to the balance.
With r being the period rate and n the number of compounding periods, we can obtain the APY through this formula:
Audit
A smart contract audit is an extensive methodical examination and analysis of a smart contract's code used to interact with a cryptocurrency or blockchain. This process is conducted to discover errors, issues and security vulnerabilities in the code in order to suggest improvements and ways to fix them.
Automated market maker (AMM)
In a decentralized exchange, an automated market maker (AMM) facilitates the buy and sell orders automatically. AMM works by using self-executing computer programs, also known as smart contracts. AMM eliminates the need for an additional participant when making a trade. Buyers and sellers can instead trade directly with an AMM and its algorithm.
Arbitrum
A layer 2 scaling solution for Ethereum that uses optimistic rollups to improve transaction throughput and reduce gas fees.
Arbitrum One
The main net of Arbitrum, launched on August 31, 2021.
Arbitrum Nitro
An upgraded version of the Arbitrum One network, which increased transaction throughput and further reduced fees.
Algebra V1.9
Tick-based concentrated liquidity AMM, similar to Uniswap V3.
Blockchain
A blockchain is a peer-to-peer ledger of all transactions across a network.
Bonding curve
A mathematical curve used by some automated market maker (AMM) protocols to determine the price of tokens based on their supply and demand, often used in decentralized token sales or token minting processes.
Bridge
A technology that connects different blockchains, allowing assets to be transferred between them.
Block
A collection of data, including transactions and other information, that is added to a blockchain once it has been verified and cryptographically secured.
Buy back & burn
A process where a portion of the cryptocurrency's supply is used to buy back the tokens from the market and then burn (destroy) them, reducing the total supply and applying continuous buying pressure.
Cancel redeem
An option for users to stop the redeeming process at any time, resulting in the retrieval of the initial amount of xGRAIL and no GRAIL being received.
Composability
The ability of a system or protocol to be combined and interact with other systems or protocols in a modular and flexible manner.
Community Nitro pools
Nitro Pools that are openly deployed by anyone, not just Camelot or verified partners.
Contract address
The contract address is where the token contract is located or where a smart contract that manages token holders' balances is located.
Concentrated liquidity
A (AMM) feature that allows liquidity providers to define custom price ranges for their assets, focusing liquidity within specific price bands.
Conversion ratio
The proportion at which one token or currency can be exchanged for another.
Cold storage
The practice of keeping private keys for cryptocurrency wallets offline, typically on a hardware device.
Core contributors
Key members of a project who contribute to its development and growth.
CEX (Centralized exchange)
A cryptocurrency exchange that is operated by a central authority, responsible for managing user funds and facilitating trades between users.
Custom tick spacing
A feature in V3 that allows configuring unique tick spacing settings for each liquidity pool
dApp
Decentralized Web3 software application that normally runs on a blockchain.
DAO (Decentralized autonomous organization)
Governance mechanism where votes make decisions, and where voting rights are most of the time materialized by a governance token (xGRAIL in our case)
Deallocation
The process of withdrawing xGRAIL from a Plugin, potentially triggering a tax or fee.
Deallocation tax
A fee imposed when deallocating xGRAIL from a Plugin, which is expressed as a percentage and automatically burned, further reducing the supply of GRAIL.
DeFI
Stands for decentralized finance.
DEX (Decentralized Exchange)
A decentralized exchange (DEX) is a peer-to-peer (P2P) marketplace that connects cryptocurrency buyers and sellers. In contrast to centralized exchanges (CEXs), decentralized platforms are non-custodial, meaning a user remains in control of their private keys when transacting on a DEX platform.
Real Yield Staking plugin
Handles the allocation of staking rewards to users.
Dynamic directional fees
Provide the flexibility to reward pairs separately based on the volatility or stability of their assets, as well as on the structure of protocols and their own custom needs.
Directional & dynamic volatility fees
A fee structure that automatically adjusts based on the underlying volatility of the assets in a liquidity pool.
Emission rate
The speed at which new tokens or coins are created and distributed, typically determined by the underlying consensus mechanism.
Elastic supply token
A token with a supply that automatically adjusts in response to changes in demand or other predetermined factors, aiming to maintain price stability.
ERC-20
ERC-20 is the technical standard for fungible tokens created using the Ethereum blockchain.
ERC-721
The ERC-721 (NFT) Token is unique and can have a different value from another Token in the same smart contract.
Escrow
A third-party service or smart contract that temporarily holds funds or assets on behalf of two parties during a transaction, releasing them only when the agreed-upon conditions are met.
Fair Launch
A transparent and equitable token distribution process without preferential treatment for certain participants, such as pre-sales or venture capital investments.
Flash loan
A DeFi feature that enables users to borrow assets without collateral for a very short period, typically within a single blockchain transaction, with the loan being repaid instantly at the end of the transaction.
Fully diluted valuation (FDV)
The valuation of a project based on the current price of its token and the total supply of tokens, including those not yet in circulation.
Gas fees
A gas fee is charged for the facilitation of a transaction on a blockchain network.
Genesis Pools
Exclusive farms for early adopters, designed to bootstrap initial liquidity for Camelot before the GRAIL token went live.
Governance and governance tokens
Governance refers to determining, maintaining, adapting and enforcing the rules of an ecosystem, product, project, or DAO. It specifically refers to the control and use of a Governance token that carries the right to take part in governance processes.
Grail
The native, liquid token of Camelot, used for farming rewards and other protocol functions.
xGrail
The escrowed, non-transferable token of Camelot, provides access to core Camelot features.
Hardcap
A predetermined maximum limit on the total supply of a cryptocurrency, set by the developers to control inflation and scarcity.
Impermanent Loss
A user may incur an impermanent loss when he or she locks up crypto tokens in a liquidity pool for the purpose of providing liquidity and earning interest, but the token's price changes due to market volatility or other factors.
Intermediaries
Third-party entities or services that facilitate transactions between two or more parties.
Layer 1 & 2 (L1 & L2)
A Layer 2 protocol applies to off-chain networks that are built on top of Layer 1 networks in order to enhance the capabilities of the underlying Layer 1 networks. For example: Ethereum (L1) - Arbitrum (L2)
Layer 3
Layer 3 is an additional layer on top of existing blockchain networks like Layer 1 (e.g., Ethereum) and Layer 2 (e.g., Arbitrum). It is designed to further enhance scalability, privacy, and customization for decentralized applications. Layer 3 solutions, such as Orbit Chains, enable developers to create specialized, application-specific blockchains that can operate with greater efficiency and flexibility, tailored to the unique needs of each project.
Launchpad
A platform allows projects to launch their tokens and bootstrap liquidity in a decentralized and community-driven manner.
Limit orders
A type of order in which a trader specifies the price at which they are willing to buy or sell an asset, allowing for greater control over trade execution.
Liquidity
The term liquidity refers to the ease with which a token can be converted into another asset without impacting its value. Liquidity measures the circulating supply and how much trading activity there is in exchange. A currency with low supply and/or circulation is said to be illiquid. Low liquidity levels cause market volatility, resulting in spikes in token prices. A high level of liquidity, however, indicates a stable market with few price fluctuations.
Liquidity mining
Liquidity mining involves placing tokens into a DeFi protocol in order to provide liquidity while receiving rewards for the stakes placed.
Liquidity pool
A Liquidity Pool (LP) is a pool of deposited funds used to provide liquidity for smart contracts.
LP token & Liquidity providers
A Liquidity Pool (LP) is a pool of deposited funds used to provide liquidity for smart contracts. Liquidity providers contribute to the liquidity pools by depositing assets and receiving in exchange a new token representing the share they own of that pool. This token is called a Liquidity Provider (LP) token.
On-chain
Transactions or operations that occur directly on a blockchain network, as opposed to off-chain transactions, which take place outside the main chain through sidechains or Layer-2 solutions.
Optimistic rollup
A smart contract-based scaling solution that bundles multiple transactions into a single transaction, reducing computation time and gas consumption.
Orbit Chains
Orbit Chains are custom, application-specific blockchains built on the Arbitrum tech stack. They are designed to provide enhanced scalability, security, and flexibility for decentralized applications, allowing them to operate with optimized performance tailored to their specific use cases.
Oracles
Data providers that connect blockchain networks to real-world information, such as price feeds or other external data, allowing smart contracts to interact with and react to events outside the blockchain.
Multisig wallet
A multisig wallet requires two or more private keys to sign transactions.
Mainnet
A working, fully-functional blockchain is referred to as the mainnet.
Market Cap
The total value of all outstanding tokens or coins of a cryptocurrency, calculated by multiplying the current price by the circulating supply.
POL (Project-Owned Liquidity)
Metrics measuring the amount of LP the Camelot DAO treasury owns.
Permissionless
A feature of decentralized networks and platforms that allows anyone to participate without the need for approval or authorization from a central authority.
Plugin
A module within the ecosystem that serves a specific function or interacts with the token in a particular way.
Protocol
A DeFi protocol is a program or code written on the blockchain that is used for designing DApps. The protocol is represented by DApps that offer peer-to-peer financial services.
Price impact
The effect of a trade on the price of an asset in a liquidity pool, determined by the size of the trade relative to the pool's total liquidity.
Real yield
A term used to describe earnings generated from a protocol's revenue and distributed to token holders.
Rebase token
A type of cryptocurrency whose supply adjusts automatically based on a predetermined metric, such as the price of another asset, in order to achieve price stability.
Redeeming
The process of exchanging a token or currency for another, with certain conditions applied, such as vesting.
Slippage
Slippage refers to a difference in price between buyer and seller expectations. Slippage can lead to a final sale price of the asset that is either more or less than the requested transaction amount.
Smart contract
The term smart contract refers to a program that is designed to automate the execution, control, or documentation of legally binding events according to a contract or an agreement.
Stablecoin
A stablecoin is a cryptocurrency that has its value pegged to the value of a stable asset. Stablecoins are most commonly pegged to the US Dollar.
Stable pair
A type of token pair in which the assets have strongly correlated price movements, often aiming to maintain a 1:1 transfer ratio.
Staking
The act of depositing tokens into a yield farming protocol.
Swap
With a swap, you can instantly exchange one token for another without needing to exchange it for fiat currency.
Testnet
Testing network for a new product or project, or for possible improvements to an existing product.
Tokenomics
Among the factors that determine tokenomics are the number of tokens circulating, the maximum token supply, the rate at which tokens are emitted, and the vesting schedule for tokens.
Token allocation
The distribution plan for a project's tokens, including details on the total supply, initial distribution, and any reserved or locked tokens.
Token Burn
The process of permanently removing a certain amount of tokens from circulation, often with the goal of reducing supply and increasing the value of the remaining tokens.
Trade routing
The process of finding the most efficient path for a swap between two assets on a decentralized exchange, often involving multiple intermediate trades to minimize slippage and maximize returns.
TGE (Token generation event)
An event where a project's tokens are created and distributed to participants, such as an initial coin offering (ICO) or initial DEX offering (IDO).
TVL (Total Value Locked)
This metric represents the sum of all assets deposited in the protocol.
UniV2 & 3
A reference to Uniswap V2 & 3
Vault
A smart contract-based solution that automates yield farming strategies by pooling user funds, optimizing asset allocation, and distributing rewards.
Vesting
A mechanism that locks up tokens or assets for a specified period, releasing them according to a predetermined schedule or after certain conditions are met.
Vesting duration
The length of time that tokens or assets are locked up during the vesting process.
Volatile pair
A type of token pair in which the assets have uncorrelated or weakly correlated price movements
Volatility
A measure of the degree of price fluctuations in a financial instrument.
Wrapped tokens
Tokenized versions of existing cryptocurrencies that enable cross-chain compatibility, allowing users to interact with different blockchain networks using a single token.
xGRAIL plugins
Plugins are contracts linked to the xGRAIL contract. In other words, plugins are additional utilities associated with xGRAIL.
Yield
The yield is the amount earned by staking or depositing an asset in a DeFi platform.
Yield farming
Yield farming accounts for depositing or staking tokens across DeFi platforms which provide rewards to liquidity providers. You can generate additional value from your assets by farming them.
Yield aggregator
A DeFi platform or tool that automatically allocates user funds to various yield farming opportunities, aiming to optimize returns by constantly monitoring and rebalancing investments.
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