Developer Guide
Helpful Terminology
A
| Term | Meaning |
|---|---|
| Account-based CBDC systems | Account-based CBDC systems refers to the distribution of the CBDC which will involve the transfer of a claim recorded on one account to another account at the CB. |
| Action Identifier | An Action Identifier is a unique function identifier (function signature) that is represented as 4 first bytes of the combination of the method name and its arguments converted to keccak 256 hash function (i.e. "transfer(address,uint256)" > keccak256 > "0xa9059cbb2ab09eb219583f4a59a5d0623ade346d962bcd4e46b11da047c9049b" > action identifier = "0xa9059cbb"). |
| Altseason | Altseason refers to the brief period where capital flows out of bitcoin and into "Altcoins," resulting in a significant and rapid price increase for the majority of crypto assets other than bitcoin. |
| Application Programming Interface | Application Programming Interface (API) is a computer-readable (programmatic) interface exposed by an application to allow other applications to interact with it. For example, an API might allow an application to provide data to another, or an API might be used to request that the application perform a specific function. |
| Asset | An Asset is a resource with economic value that can be converted into cash; examples include, fiat currency (USD), crypto (BTC), commodities (Gold), equities, bonds, loans, mortgages, other financial instruments, real estate, or any other form of value. |
| Asset-backed Tokens | Asset-backed Tokens are Tokens backed by holdings of underlying assets. |
| Asset Tokens | Asset Tokens are Tokens that represent assets, such as participations in real physical underlyings, companies, earnings streams, or entitlements to dividends or interest payments. In terms of their economic function, the tokens are analogous to securities. |
| Atomic Swap | An Atomic Swap is a simultaneous and instantaneous settlement of one thing for another which cannot be broken. i.e., both parties are contracted to settle and the debit/credit between wallets happens automatically. (In traditional finance: Delivery vs Payment) |
B
| Term | Meaning |
|---|---|
| Base Price | The Base Price is the price of an asset as it is received from a pricing source. |
| Base Trade Wallet | A wallet from which a commission for token issuance will be charged and to which newly created tokens will be transferred immediately after their issuance. |
| Bitcoin | Bitcoin (note the lower case b and referenced by its common symbol BTC) is a cryptocurrency, sometimes called a virtual currency, designed to be exchanged in a trusted manner with others in a peer-to-peer transaction, without the need for a third party to manage the flow or to verify the parties to the transaction. Bitcoin (and the Bitcoin network that supports the cryptocurrency) was introduced to the public in 2009 by an anonymous developer or group of developers using the name Satoshi Nakamoto. It has since become the most well-known cryptocurrency in the world. Its popularity has inspired the development of many other cryptocurrencies. These competitors either attempt to replace it as a payment system or are used as utility or security tokens in other blockchains and emerging financial technologies. |
| Blobs | Blobs are large chunks of data that can be attached to Ethereum blocks, containing information that is needed by rollups (L2 solutions) to process transactions and execute code on Ethereum more efficiently. |
| Blockchain | A blockchain is a time-ordered ledger that records the execution of transactions within data blocks that comprise a data store. Each block is linked (or ‘chained’) to the previous block using cryptographic signatures that make the transactions they record tamper evident. This allows blockchains to operate as distributed ledgers, which can be shared with anyone without fear that the data they contain has been manipulated. |
| Burn (token) | The process by which tokens are cancelled / destroyed following a redemption or cancellation event. This unique mechanism permanently removes tokens from circulation, aiming to increase scarcity. This unique mechanism permanently removes tokens from circulation, aiming to increase scarcity. |
C
| Term | Meaning |
|---|---|
| Carry Trade | Carry Trade is a strategy in which an investor borrows capital at a lower interest rate, typically from countries or markets with lower borrowing costs, and then invests that borrowed money into assets that are expected to provide higher returns. |
| Central Bank Digital Currency | A Central Bank Digital Currency (CBDC) is a fiat currency issued in digital form, backed by a central bank and is widely available to the public. "Central bank money" refers to money that is a liability of the central bank. In most countries, there are currently two types of central bank money: physical currency issued by the Central Bank and digital balances held by commercial banks at the Central Bank. While the public have long held money predominantly in digital form—for example in bank accounts, payment apps or through online transactions—a CBDC would differ from existing digital money available to the general public because a CBDC would be a liability of the Central Bank, not of a commercial bank. Today in the United States, Federal Reserve notes (i.e., physical currency) are the only type of central bank money available to the public. |
| Centralized Ledger | A centralized ledger is a ledger that has a single source of control, finality and writing access i.e., it is a ledger maintained by a single organization either for its transactions or for another external organization where it then serves as a third-party trusted source for the transacting parties. |
| Chain Link | Chain Link refers to each asset pair in a chain price. For example, the chain price Tesla - USD - BTC is comprised of two links: Tesla - USD and USD - BTC. |
| Chain Price | A chain price (or, Cross Price) is formed by combining two or more prices in order to determine a price for a pair that is not directly provided by sources. For example, Tesla represented in BTC is a chain price derived by Tesla expressed in USD and USD expressed in BTC. |
| Classes | Classes (Templates) are a combination of more than 2 logics which are compiled into a Class (or Template). |
| Clawback | A Clawback refers to when an existing token is cancelled and replaced with an alternative token. Normally used when a client loses access to their wallet or believes the security has been compromised. The old wallet is frozen, and a new wallet is created and then the contents (tokens) of the old wallet are cancelled and replaced with new Tokens in the new wallet. |
| Coin | A coin is a unit of value associated with a cryptocurrency. |
| Cold Wallets | Cold Wallets (also known as Cold Storage) are wallets that are not permanently linked to an always on internet access point i.e. hardware devices such as USB sticks with security features. |
| Compliance Oracle | Compliance Oracle is a separate component that manages event driven data requests, related sources, contexts, and processes. It acts as a dispatcher that redirects queries to different databases. It can retrieve data from the storage (data that are stored on the blockchain, i.e. explicit attribute values), external source (data that are stored on third parties’ databases and are available through the API call), policy (data that are stored within the Policy that is applied for a particular item/action. In the end the result of a particular Policy execution should be returned), etc. |
| Component Manager | A Component Manager is an entity that manages a property lifecycle. Usually, it is an account (wallet) that has been created or initialized (in the case of tokens). It's similar to the "Operator". The difference is that Operators are assigned manually, while Component Managers are assigned automatically during the component creation/initialization. PropertyOperator is responsible for the property it was assigned to, while the Component Manager is responsible for the deployed component. |
| Composer | A Securrency tool used to create Tokens on a blockchain and embed the rules, functions and associated events into the smart contracts that are associated with them. |
| Composite Price | The Composite Price (or All-In Price) is the Base Price modified for a specific client with any spreads, margins, tiers, fees, etc. included. If a price is not modified as such then the Base Price will equal the Composite Price. |
| Configured Pair | A Configured Pair is a supported pair that has been set up in the Securrency Pricing Engine. All configured pairs are supported pairs, but not all supported pairs may have been configured. |
| Context | A Context is an environment (such as a company), which represents its own set of rules. There may be a context hierarchy where there are high-level contexts (companies) and low-level contexts (departments). Parent contexts may change settings in children contexts while it is not true in the reverse direction. |
| Control Location | Control Location is the delegated authority work and role for the security/Token on behalf of the issuer to record changes of ownership and maintain the issuer's security holder records. They are the record of truth for ownership and the register is used to arrange any distribution of dividends or final redemptions. (Traditional: Transfer Agents.) |
| Counterparty | A counterparty is a unique identifier of a company within the System that is used during token issuance to explicitly incorporate company name into the newly created token name. |
| Crypto-Currency | Crypto-Currency is often used as a synonym for payment or exchange tokens to distinguish them from utility or securities tokens. |
| Crypto Asset | Crypto Asset includes payment tokens (central bank digital currency, stablecoins and crypto-currencies), securities tokens (digitally native or asset-backed), and utility tokens. A Crypto Asset shares the characteristics of a digital asset (see below) and, in addition, allows for issuance, termination, ownership and transfer of ownership to be guaranteed via cryptography. |
| Cryptocurrency | A cryptocurrency is a digital or virtual currency secured by cryptography and based on a network that is distributed across many computers. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A crypto currency represents a store of value, and they are most often associated with payment networks. The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure. (The disadvantages of cryptocurrencies include their price volatility, high energy consumption for mining activities.) To use cryptocurrencies, you need to have a digital wallet that can link to the associated blockchain to store the value held in the cryptocurrency. |
D
| Term | Meaning |
|---|---|
| Decentralized Autonomous Organizations | Decentralized Autonomous Organizations (DAO) is a decentralized autonomous organization, a type of bottom-up entity structure with no central authority. Members of a DAO own tokens of the DAO which give them the ability to participate in the management and decision-making of an entity through voting rights. All votes and activity through the DAO are posted on a blockchain, making all actions of users publicly viewable. DAOs rely heavily on smart contracts. These logically coded agreements dictate decision-making based on underlying activity on a blockchain. For example, based on the outcome of a decision, certain code may be implemented to increase the circulating supply, burn a select amount of reserve tokens, or issue select rewards to existing token holders. |
| Decentralized Consensus | A Decentralized Consensus is a decentralized scheme that transfers authority and trust to a decentralized virtual network and enables its nodes to record transactions continuously and sequentially on a public “block,” creating a unique “chain”: the blockchain. Each successive block contains a “hash” (a unique fingerprint) of the previous code; therefore, cryptography (via hash codes) is used to secure the authentication of the transaction source and removes the need for a central intermediary. The combination of cryptography and blockchain technology together ensures there is never a duplicate recording of the same transaction. The key concept is with this degree of unbundling, the consensus logic is separate from the application itself; therefore, applications can be written to be organically decentralized, sparking a variety of system-changing innovations in software architecture, whether they are money or non-money related. |
| Decentralized Exchange (DEX) | A Decentralized Exchange (DEX) is a marketplace created on a public blockchain where peer-to-peer orders and transactions can be found/published, matched, and settled and no one party has central control over the orders, or without relying on an intermediary to manage the transfer or holding of their funds. |
| Decentralized Finance (DeFi) | Decentralized finance (DeFi) is an emerging financial technology paradigm based on secure distributed ledgers. DeFi challenges traditional centralized financial systems by empowering individuals with peer-to-peer digital capabilities and the ability to own and control their assets. DeFi eliminates the need for trusted intermediaries and the associated fees that banks and other financial companies charge for using their services. Individuals hold money and other assets in a personal secure digital wallet, secured by private cryptographic keys, and can transfer funds in seconds. Anyone with an internet connection can use DeFi. |
| Delegated Entity | The entity that is delegated to perform a specific operation on behalf of another entity. |
| Delegation Mechanism | The mechanism that allows delegation of several rights from one entity to another so that the delegated entity can act on behalf of the delegator. |
| Delegator | An entity who is delegating/ registering a delegation for a specific operation either to a machine or to another entity. |
| Dencun | Dencun is an upgrade activated on the Ethereum blockchain designed to enhance its performance by making execution by scalability layer-2 solutions more efficient and improving data availability across the network. |
| Department | A Department is a subdivision of a company represented as a separate corporate entity. |
| Digital Asset | A Digital Asset is any asset that is purely digital or is a digital representation of a physical asset. Digital assets are broadly defined as any digital representation of value which is recorded on a secured ledger (distributed or centralized) or any similar technology. Digital assets include (but are not limited to): 1) Cryptocurrency /convertible virtual currency 2) Stablecoins 3) Non-fungible tokens (NFTs). |
| Digital Currency | A Digital Currency (also known as a Virtual Currency or Electronic Currency) is currency which does not exist in physical form. |
| Digital Financial Asset | Digital Financial Asset refers to a term used to distinguish financial assets in digital form from other assets, such as images, videos, and texts that are also rendered in digital form. |
| Digital Native Tokens | Digital Native Tokens are digital assets that originate on a distributed ledger. |
| Digital Non-native Tokens | Digital Non-native (or Asset-backed) Tokens are assets represented digitally on a distributed ledger. |
| Digital Token | A transferable unit generated within a distributed network that tracks ownership of the units, usually through the application of blockchain technology. |
| Digital Transfer Agent (DTA) | A Digital Transfer Agent (DTA) provides the services of a traditional Transfer Agent, with the additional benefit of leveraging digital technology such as Blockchain and Smart Contracts to support digital asset management in a security token ecosystem. |
| Distributed Ledger Technology | Distributed Ledger Technology (DLT) is a decentralized peer-to-peer digital system for recording transactions between parties in multiple places at the same time. DLT deploys cryptography and consensus mechanisms to allow participants to share an immutable replica of the same ledger. Unlike traditional databases, distributed ledgers have no central data store or administration functionality. A distributed ledger is a database that does not need a third party to ensure recorded transactions are valid and honest. DLT allows users to view any changes and who made them, reduces the need to audit data, ensures data is reliable, and only provides access to those who need it. |
| DLT Asset | A DLT Asset is an asset transacted on a Distributed Ledger Technology (DLT) platform. |
| DLT System | A DLT System is a system of electronic records that enables independent entities to establish a consensus around a shared ledger without relying on a central authority to provide or authenticate the authoritative version of the records. The consensus is established by the authoritative ordering of cryptographically validated (‘signed’) transactions made persistent by replicating the data across multiple nodes and tamper-free by linking them via cryptographic hashes. The shared result of the consensus process serves as the authoritative version of the records. |
| Dominance | Dominance refers to the ratio between a crypto asset market capitalization and the total market capitalization of the asset class, which measures the relevance of a project in the industry. |
| DvP1 | DvP1 (Delivery versus Payment model 1) is a securities settlement mechanism that links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs if and only if the corresponding payment occurs. DvP1 typically settles securities and funds on a gross and obligation-by-obligation basis, with final (irrevocable and unconditional) transfer of securities from the seller to the buyer (delivery) if and only if final transfer of funds from the buyer to the seller (payment) occurs. [Source: BIS, 16 Jun 2015] |
| DvP2 | DvP2 (Delivery versus Payment model 2) is a securities settlement mechanism that links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs if and only if the corresponding payment occurs. DvP2 typically settles securities on a gross basis, with final transfer of securities from the seller to the buyer occurring throughout the processing cycle, but settles funds on a net basis, with final transfer of funds from the buyer to the seller occurring at the end of the processing cycle. (Source: BIS, 16 Jun 2015) |
E
| Term | Meaning |
|---|---|
| Electronic Currency | Electronic Currency is synonymous with "digital currency." |
| ERC 1155 Token | An ERC 1155 Token is a protocol standard similar to SWIFT Messaging for dematerialized securities. ERC-1155 allows for more efficient trades and bundling of transactions, thus saving costs. ERC-1155 not only supports the creation of NFTs but also fungible and semi-fungible tokens, facilitating the conversion of these types of tokens to NFTs and vice-versa. This flexibility is a significant advantage for ERC-1155. |
| ERC20 standard | ERC20 is a Protocol standard similar to Swift Messaging for Cash (fungible Assets). |
| ERC721 | ERC721 is a Protocol standard similar to Swift Messaging for materialized physical securities. It introduces a standard for Non-Fungible Tokens, in other words, this type of Token is unique and can have a different value than another Token from the same Smart Contract, maybe due to its age, rarity or even something else linked to it like its visual like a deed for artwork or a song. |
| ERC777 | ERC-777 is a standard that allows people to build extra functionality on top of tokens such as a mixer contract for improved transaction privacy, or an emergency recover function should you lose your private keys. |
| Ethereum | Ethereum is a public blockchain network launched in 2016 supporting the Ether cryptocurrency that aims to provide a general-purpose transaction platform and an alternative to fiat currencies as a means of exchange. Ethereum was the first platform to widely support smart contracts and is notable for its smart contract Standards (ERC20 & ERC721). It has recently undergone a major redesign in order to make it more scalable, provide higher throughput and use less computing resources. |
| Exchange | An Exchange is a venue or marketplace where an asset is traded. Examples for stocks include the New York Stock Exchange or the London Stock Exchange. Examples for crypto include Coinbase, Gemini, or Kraken. |
| External Price Provider | External Price Provider is a provider that Securrency's Pricing Engine uses as a source of market prices. |
F
| Term | Meaning |
|---|---|
| Fiat | Fiat in the digital world refers to a store of value that was purchased using local currency. This is usually represented as a Fiat Token in the blockchain linked to a currency amount held in custody with a local bank. Fiat money is not backed by a physical commodity but instead is backed by a promise/guarantee from the issuing country's government to pay the bearer a value at the central bank in digital form. |
| Fiat Currency | A Fiat Currency is a domestic legal tender that is issued by governments rather than backed by a physical commodity, such as gold. |
| Fork | A Fork is when a new blockchain uses the original code from an older blockchain but makes changes to improve it. There have been many forks of popular blockchains, the most famous being Bitcoin Cash, which forked Bitcoin. Blockchain forks are essentially a split in the blockchain network. (The network is an open-source software, and the code is freely available. This means that anyone can propose improvements and change the code.) The option to improve the open-source software is a fundamental part of the blockchain evolution and also facilitates rapid development of feature updates to the blockchain. |
| Fungible Token | A fungible asset is interchangeable and indistinguishable from another asset of the same type and divisible into smaller units. For example, units of the same currency are fungible: e.g. one U.S. dollar can be exchanged for another dollar (or four quarters, or 20 nickels), and each of those dollars has the same purchasing power to pay for things. |
G
| Term | Meaning |
|---|---|
| Gas Charges (Gas Fee) | A Gas Charge (or Gas Fee) is a blockchain transaction fee, paid to network validators for their services to the blockchain. Without the fees, there would be no incentive for anyone to help validate and secure the network. (In traditional finance: SWIFT Charges). |
H
| Term | Meaning |
|---|---|
| Halving | Halving is the event where the Bitcoin mining subsidy per block is halved, which takes place in multiples of 210,000 blocks since the network's inception (or roughly every 4 years). |
| Hard Fork | A Hard Fork refers to a software change to the DLT protocol that introduces a permanent split between the new and the old protocol, making them incompatible (backward incompatible). (A ‘soft fork’ can be defined as a change to the DLT software that is ‘backward compatible.’). A Hard Fork occurs when a competing software development protocol is proposed that will dramatically change the existing chain protocol such that the new software protocol is not backwardly compatible. It’s up to chain participants (node validators/miners, exchanges, custodians, etc.) to decide which blockchain to continue using. If there isn’t a unanimous decision, then this can result in the creation of two versions of the blockchain (a hard fork). |
| Hash Rate | A Hash Rate is the conventional unit measure for the computational power on a Proof-of-Work network. It serves as a proxy for the security of a blockchain and how costly it is to attack. |
| History Period | A History Period refers to the period over which a price is shown. For example, it might be 1 day, 1 week, 1 year, since inception. The History Price differs from the Price Interval. For example, a price history may be displayed for 1 week showing an hourly price interval. |
| Hot Wallets | Hot wallets are normally software/cloud-based wallets connected to the Internet. A hot wallet is also used to describe how easy it would be to access the value contained in a wallet and is similar in concept to something you carry around with you all the time, such as holding cash and credit cards in a wallet, a purse or in your pocket. |
I
| Term | Meaning |
|---|---|
| Initial Dex Offering (IDO) | An Initial Dex Offering is a crowdfunding technique that allows crypto and digital blockchain projects to launch their native token or coin through a decentralized exchange (DEX). The IDO model is the infamous successor to ICOs, which allows projects to launch on their own to raise money for growth and development. |
| Initial Wallet | The Initial Wallet is the first wallet that is created by the System for a user. |
| Inscription | Inscriptions refer to the metadata that is added or "inscribed" into Bitcoin satoshis (sats), which are the smallest fractions of bitcoin. That allows unique data to be fully registered on the Bitcoin blockchain for the creation of fungible and non-fungible tokens, which unlike full-fledged smart contracts platforms, have more restricted programmability. |
| Internal Price Provider | An Internal Price Provider is a pricing provider that inputs prices into Securrency's Pricing Engine via its API. It is typically another application rather than an external pricing source. |
| Issuance (token) | Issuance is a process of creating new token and / or new smart contract representing an asset on a blockchain. |
| Issuing (Anchor) Wallet | An Issuing (Anchor) Wallet is a wallet on behalf of which tokens are issued and minted. |
| Issuing and Paying Agent (IPA) | An Issuing and Paying Agent ensures delivery of the security to investors having received the subscription amount and the delivery of that amount to the issuer. During the lifecycle of the security, coupons or dividends can be paid to the investors and the IPA will again ensure that these are paid on behalf of the issuer. The same occurs at redemption/maturity of the security. |
| Items | Items (Digital Assets) refers to an instance of a class which inherits its functionality. |
K
| Term | Meaning |
|---|---|
| Keys Overriding | Applying to smart contracts, "Keys Overriding" is a process of adding additional variables (keys) that are required to run a particular function (for example, Issuer role requires 2 keys: Property Manager, which defines the entity that manages "Issuers" and Smart contract, which defines the token that is managed by a particular Issuer). In terms of the Policy Engine, the "key" is a variable that is accepted by a particular value class (function) as its argument. |
L
| Term | Meaning |
|---|---|
| Layer-2 (L2)-A | Layer-2 (L2)-A is a parallel network that serves as a secondary set of off-chain solutions built on top of an existing Layer-1 to reduce bottlenecks and offer greater scalability and privacy. |
| Layer 1 (Layer 1 Blockchain Networks) | Layer 1 blockchain refers to the underlying blockchain architecture. They are responsible for the essential functions of digital assets such as processing transactions and creating new blocks. L1s are called so because they validate and execute blockchain transactions without support from another network. Examples of L1 blockchain networks are Ethereum, Solana, and Avalanche (to name a few). |
| Layer 2 | Layer 2 refers to various protocols that are built on top of layer 1 to improve the original blockchain’s functionality. Layer 2 protocols often use off-chain processing elements to solve the speed and cost inefficiencies of the layer 1 network. Layer 2 protocols can be thought of as separate networks built on top of the layer 1 main network. The second largest blockchain platform, Ethereum, has a large variety of layer 2 solutions, e.g., Solana. |
| Layer 3 | Layer 3 is represented by blockchain-based applications, such as decentralized finance (DeFi) apps, games, or distributed storage apps. Many of these applications also have cross-chain functionality, helping users access various blockchain platforms via a single app. |
| Ledger Scan / Block Explorer | A ledger Scan/ block explorer acts as a search engine to easily navigate and search a blockchain. They allow you to research wallets or transactions such as looking up the balance of individual wallet addresses, reviewing transactions that have passed through a wallet, or drilling down into the details of any Transaction ID in the blockchain. A transaction’s main elements are the Transaction ID, the sending & receiving wallet address, the associated fees, and the transaction’s status. Reviewing wallet addresses would allow you to review the incoming and outgoing transactions for that specific address. For Transactions, it allows you to see the sender’s wallet id, what asset was sent, how much has been sent, its destination, and the fees that were paid for it. |
| Lightning Network-A | Lightning Network is a scaling solution built atop Bitcoin that allows off-chain transactions with increased speed and lower transaction costs, without giving up security. |
| Liquid Staking | Liquid Staking is a form of staking where depositors are rewarded with a token that can redeem the original deposited asset, while providing a liquid asset for other use cases such as decentralized finance (DeFi) applications. |
| Litecoin | Litecoin is a cryptocurrency that aims to compete with fiat currencies as a means of exchange. It has no intrinsic value, asset backing or links to other projects and is not backed by any authority such as a central bank. |
M
| Term | Meaning |
|---|---|
| Manual Price Entry | Manual Entry of a Price of an asset into the Pricing Engine via the Price Feed Configuration UI. An example might be an end-of-day price of a fund. |
| Market Maker | Market Maker is a company or entity which continuously is open to buying and selling assets in the market at prices that it posts publicly and stands by. |
| MetaMask | MetaMask is a software cryptocurrency wallet that allows users to buy, store, send, and swap cryptocurrencies on the Ethereum blockchain. It can also be used to interact with decentralized applications (dApps) and non-fungible tokens (NFTs). The application allows you to access your wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications. |
| Miners | Miners represent a party that undertakes a validation of a block in the blockchain in exchange for a small processing fee (gas charge). This process is similar to how a SWIFT agent bank is used to intermediate in an international payment to validate the receipts and movements of funds from one swift party to another for a fee. |
| Mint | Mining, or Minting, is the term used to “create” a token. This is a process of creating new units of an issued token, akin to creating additional asset shares in traditional rails. |
| Monetary Easing | Monetary Easing is a monetary policy in which a central bank lowers interest rates and deposit ratios to make credit more easily available, increasing the corresponding currency circulating supply. |
| MPC (Multi-Party Computation) | MPC (Multi-Party Computation) and is a field of cryptography born 30 years ago. Generally, MPC allows two (or more) parties to jointly compute a function output without revealing their inputs. MPC allows the creation of a secure key management system without a single point of failure (the proverbial “private key”) in which multiple parties (for example a remote server and a mobile phone) can jointly perform all needed cryptographic functions (like key generation, transaction signatures, and transaction verification) while neither of the parties reveal their respective secrets. This offers a more secure self-custodial option by protecting against both private key theft (as there is no single private key to steal) and key loss, as each party can back up their secret input individually in a way that does not expose and compromise the entire system. |
| Multi Party Computation | Secure Multi-Party Computation (MPC) allows two (or more) parties to jointly compute a function output without revealing their inputs. For example: Using MPC, a group of friends can securely calculate their average salary (“output”), without revealing how much each of them gets (“inputs”). Specifically for cryptocurrency wallets, MPC allows the creation of a secure key management system without a single point of failure (the proverbial “private key”) in which multiple parties (for example a remote server and a mobile phone) can jointly perform all needed cryptographic functions (like key generation, transaction signatures, and transaction verification) while neither of the parties reveal their respective secrets. It is important to highlight that in MPC a single private key is never generated, split, or reconstructed in the process: This makes it superior to traditional models based on a single private key. By implementing this type of MPC technology, consumer-focused wallets (and institutional services) can securely design an on-chain asset management system that removes the single point of failure of a private key. This offers a more secure self-custodial option by protecting against both private key theft (as there is no single private key to steal) and key loss, as each party can back up their secret input individually in a way that does not expose and compromise the entire system. This design offers a number of advantages: 1) Easy to recover 2) No single point of failure 3) Entirely user controlled |
| Multilateral Trading Facility | A Multilateral Trading Facility (MTF) is a platform that is more loosely regulated than an exchange. It is used to match large orders mainly from institutional clients, and work as broker-dealers rather than exchange houses. (They are also referred to as Multilateral Trading Facilities in Europe.) MTF operators allow for trading of a wide variety of equity and non-equity securities, including shares, warrants, options, derivatives, futures, CFDs, fund units, and crypto assets. Contracts between buyers and sellers are formed according to a set of transparent rules that do not discriminate between members or their clients (non-discretionary basis). |
N
| Term | Meaning |
|---|---|
| Network Effects | Network Effects refers to when the value of the services on the chain increases for each user, as others use it or join it, and that value is propagated on the very network that was created (e.g., wider adoption, increased services, standardized protocols, increased liquidity, lower costs, and faster processing). (In traditional finance, referred to as "Mass Adoption.") |
| Nodes | A node is a device running the software of a specific blockchain. Nodes are the storage containers of a blockchain; any time an in-network user retrieves information, they are interacting with a node. Nodes remain completely transparent and accessible to anyone. Nodes are the custodians of a blockchain and keep all copies of the ledger in sync, storing encrypted data of past transactions while taking on new blocks for scalable growth. In place of a central authority, a blockchain is powered by a fundamental nexus of nodes, which are essentially stakeholders and whatever device that connects them to a network. Operationally, nodes fulfill three main purposes: 1) maintenance 2) validation and 3) accessibility. |
| Non-fungible Token (NFT) | A Non-Fungible Token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify ownership and authenticity. An NTF has unique characteristics which make it neither interchangeable nor divisible into smaller units; for example, CryptoKitties. |
O
| Term | Meaning |
|---|---|
| On-Chain Identity | On-Chain Identity can be verified by a “trusted compliance partner” and a wallet on the chain can then be opened or linked to the sponsor's access portal (web app, phone app, etc.) allowing the identity to operate the wallet within the chain. Whilst no personal information is stored on the chain, flags representing the sponsor’s view on the identity will be associated with the wallet and will allow Token Smart Contracts to seamlessly operate and validate transaction compliance (e.g., Qualified Investor flags, Sanction-related flags, etc.). (In traditional finance, refers to: In-app identity). |
| Order Book | An Order Book is a complete set of expressions of interest from investors representing a willingness to buy or sell an asset at a stated price (point-in-time prices). An Order Book does not represent actual trades in the market and can be initiated in a Bid, or an expression to buy an asset at a stated price for a stated amount at a point in time; or an Ask, an expression to sell an asset at a stated price for a stated amount at a point in time. |
| Organized Trading Facility | Organized Trading Facilities (OTF) are facilities where contracts for the exchange of non-equities, such as bonds, structured finance products, emission allowances, or derivatives are formed, on a discretionary/negotiable basis. An MTF is usually operated by a regulated investment firm or an operator, whereas an OTF can only be operated by a regulated investment firm. (A traditional finance comparison: Public Exchange). |
P
| Term | Meaning |
|---|---|
| Payment Token | A Payment Token is a digital representation of value and may be used as a means of payment or as consideration for the provision of goods or services (which is not issued under the authority of a central state authority, does not possess legal status of currency or money and which does not give rise to a claim on the protocol creator. Payment Tokens are synonymous with cryptocurrencies or stablecoins and have no further functions). |
| Payments Market Infrastructure | Payments Market Infrastructure (PMI) are used by commercial banks to net payments prior to submission to an RTGS (Real-Time Gross Settlement Systems), which are operated by central banks or the Automated Clearing Houses (ACHs). |
| Permission | Permission refers to a right to execute a particular action within the System. Permissions are regulated by properties with “policy” data sources and relevant expected values. |
| Permission System | A Permission System is a system structure that allows setting different roles and relevant access levels within the System. |
| Policy | A Policy is a set of rules which regulate some actions or transactions within the System. |
| Price | Price refers to the value of one unit of an asset denominated in terms of the number of units of another asset. |
| Price Interval | Price Interval refers to the frequency with which an updated price is retrieved from its source and stored in the Pricing Engine database. This price will vary according to the asset. |
| Price Quote Period | Price Quote Period is the length of time that a tradeable quoted price can be acted upon for execution. |
| Price Type | Price Type refers to an asset class that may have various price types, i.e., bid, ask, mid, etc. |
| Pricing Engine | Pricing Engine is a Securrency component that supports price discovery for assets by interfacing with multiple external pricing sources. |
| Proof-of-Stake | Proof-of-Stake is an alternative consensus mechanism for Proof of Work, which is cheaper to enforce but more expensive and more difficult to compromise. Proof of Stake not only determines who gets to update the consensus, but it also prevents unwanted forking of the underlying blockchain. |
| Proof-of-Work | Proof-of-Work is a key concept in Bitcoin blockchain’s operations, which is a “right” to participate in the blockchain system. Proof-of-Work is a key building block because it cannot be “undone,” and it is secured via the strengths of cryptographic hashes that ensure its authenticity. It is expensive to maintain and may run into future scalability and security issues. |
| Property Manager | A Property Manager is a property (role) that is eligible to manage (CRUD) a particular Property. |
| Protected Methods | Protected Methods are methods in Smart Contracts that require special permissions created by the Permission System (not to be confused with “Private Methods” in programming). |
Q
| Term | Meaning |
|---|---|
| Quote | A quote is a bid/ask price provided by a Market Maker in an open market or in response to a Request for Quote (RFQ). The RFQ signifies a willingness to transact. |
R
| Term | Meaning |
|---|---|
| Repo Markets | A repurchase agreement is a short-term loan, collateralized with securities, with an agreement to buy back (or repurchase) the securities. Typically, securities are exchanged for cash and most often the collateralized securities are high grade government issued debt instruments. Repo transactions are conducted either in a bi-lateral manner between the counterparties (or) in tri-party basis where a clearing bank or agent acts as intermediary between the counterparties. The tri-party agent manages the collateral selection, substitution, valuation, margin management and life-cycle management for a fee. |
| Right | A Right is a Policy that was enclosed to a particular entity (wallet, token, smart contract) and describes limitations on its behavior. |
| Role | A Role is a defined set of rights (methods) that are available for a particular entity within the System. |
| Rollups | Rollups refers to L2 scaling solutions that process transactions off a main base layer blockchain network, bundles them, and then submits the compressed data back to the main chain. This reduces congestion and gas fees while maintaining security. |
S
| Term | Meaning |
|---|---|
| Schema | A schema is a collection of properties that represents something. For example, we could have a Schema representing a Bond, and this Schema may have properties like Maturity Date, Issuer, etc. |
| Securities Lending Markets | A Securities Lending Transaction involves collateralized lending of specific securities by the owner to another party in exchange for a fee. Cash or other securities are generally used as collateral. The securities lending transaction allows owners to earn additional return on long term assets. Custodians play a significant role in securities lending by acting as securities-lending agents by providing services to asset owners looking to lend their securities. |
| Security Keys | A Security Key is a kind of network password or passphrase in the form of a physical, digital signature, or biometric data password that is used to provide authorization and accessibility to the blockchain network or device on which the client requests to connect with. The Security Key also provisions to establish a secure connection between the requesting client and the serving network or device like routers etc. This protects the network and devices from unwanted access, fraud, etc. |
| Security Token | Security tokens are the digital form of traditional investments like stocks, bonds, or other securitized assets. |
| Security Token Offering | A Security Token Offering (STO) is associated with the launch of a new token that is representing characteristics similar to a traditional security (e.g., equities bonds, etc.) |
| Service Account | The Service Account (Client Application / Identity client) is the means by which a 3rd party is able to call the APIs in the Securrency platform. It is defined by a name, ClientID, a list of scopes, grant-types, clientSecret(s). |
| Signer Wallet | A Signer Wallet is wallet that has the right to sign transactions on behalf of issuer wallet. |
| Smart Contract | A Smart Contract is a computer program that is intended to automatically execute, control, or document legally relevant events and actions according to the terms of a contract or an agreement. Smart Contracts are a self-executing blockchain-based computer code that performs pre-defined tasks based on a pre-defined set of criteria or conditions. Smart contracts cannot be altered once deployed, since only this can guarantee faithful fulfilment of contractual obligations. A smart contract could, for example, be used to instruct a regular interest payment on a bond to be made to registered investors. |
| Soft Fork | A Soft Fork is when software updates to the chain continue to be backward compatible and enhance the existing chain protocols (rather than replace them). |
| Source | A Source is a place where property values are stored. A source can be storage (internal storage, i.e. the smart contract itself), external (API oracle), policy (smart contract of a special type), and direct. |
| Split Key | Split Key, also referred to as “Key Shards,” is achieved by splitting a single key into multiple pieces and copies of those pieces, such that some subset of the pieces can be recombined to recover and use the key for a signature and transaction. This key splitting or sharding can be used to provide a similar experience to true multi-signature. |
| Sponsored Custodial Wallet | A Sponsored/ Custodial Wallet is type of a wallet in which the private keys are held by a third party. The third party has full control over moving tokens in and out of the wallet i.e., for fees, deposits, and withdrawals. Normally, access to a sponsored wallet is linked to the use of an identity token to ensure that while the Sponsor can access your wallet, they are only authorized to do so in conjunction with an instruction from a valid identity associated with the ownership of the wallet. |
| Stable Coin (Stablecoin) | A Stable Coin (or Stablecoin) is a class of crypto-currency designed to eliminate the price volatility of crypto- currencies by backing them with real assets, fiat currencies or a mixture of both. Stablecoins are designed to have a relatively stable price, typically through being pegged to a commodity or currency or having its supply regulated by an algorithm. For example, a Stablecoin whose price reference is the US Dollar would be backed 1:1 by US Dollars in a custody account. Some examples of popular Stablecoins are Tether (USDT) and USD Coin (USDC). |
| Staking | Staking is the process of actively participating in transaction validation on a proof-of-stake blockchain. When you stake, you help the underlying asset’s blockchain become more secure and efficient; in exchange, you’re rewarded with more assets from the network. For example, on blockchains, anyone with a minimum-required balance of a specific asset can validate transactions and earn Staking rewards. PoS (proof-of-stake) staking blockchains allow users to actively participate in transaction validation. It allows you to earn passive income with crypto by contributing to the PoS network of a certain asset. As a control feature, Validators lose part of their stake if they approve a fraudulent transaction, incentivizing them to only approve valid ones. |
| Supported Asset Pair | Supported Asset Pair refers to an asset pair for which a pricing provider offers a price. This pricing pair may or may not already be configured in the Pricing Engine. |
| System Account | System Account refers to an Ethereum wallet that is stored on the server and is managed only by the System. |
| System Owner | A System Owner is a wallet that has initialized the System (is a Component Manager to the System components). |
T
| Term | Meaning |
|---|---|
| Target Chain Asset | The Target Chain Asset is the asset that a chain pair is priced in. For example, in the chain Tesla - USD - BTC, BTC is the target asset. |
| Token-based CBDC Systems | Token-based CBDC Systems are the digital version of cash. Users would be able to withdraw digital tokens from banks and they would be exchanged outside of the central bank’s accounts. |
| Token Creation | Token Creation is a process where new tokens are created based on the defined token standard with the relevant permissions. The integral elements of the process are Tokens Factory and Token Strategy. |
| Token Factory | Token Factory is a smart contract that is deployed once and is responsible for managing and linking Token Strategies with newly created tokens. Tokens Factory selects a token strategy, deploys new tokens, and emits an event in blockchain about token creation. |
| Token Freeze | A Token Freeze (or Freeze Function) is used to freeze a specific wallet. The frozen wallet can no longer perform operations, like transfer, mint, etc. until the wallet has been unfrozen. |
| Token Holder Data | Token Holder Data refers to all information maintained by Securrency regarding Token holders, which shall be deemed to include the Master Security-holder File. |
| Token Strategy | A Token Strategy is a smart contract that deploys a new token. It is the asset issuance strategy, inclusive of enforced and embedded rules, defined by a set of functions available over a token. Each token strategy extends ERC20 or ERC721. |
| Token versus Token | Token versus Token (TvT) refers to an entirely digital transaction settlement on a DLT network in which the exchange of value is made between an asset-backed or digital native token and a payment token. |
| Tokenization | Tokenization is the act of converting the value of a tangible or intangible asset into a token. The token itself is a piece of code made up of a distinctive asset reference, unique properties, and/or specific Legal rights in accordance with the smart contract through which it is generated. |
| Tokenization Platform | This refers to the blockchain technology infrastructure through which Securrency’s Services will be provided to the Trust, initially supporting the Ethereum and Stellar blockchains, and other blockchains (as the parties may mutually agree to in the future). |
| Tokenized Securities | Tokenized securities is a term used to distinguish tokens regulated as securities from tokens which are not regulated as securities. However, they can encompass asset classes that are not generally securitized, such as fine art and real estate. |
| Total Stake | Total Stake refers to the total amount of native tokens locked in a Proof-of-Stake blockchain (such as Ethereum, Solana, or Polkadot) as collateral for individuals to activate and operate the network consensus. The higher the dollar value of the total stake in a network, the more capital would be necessary to subdue the network maliciously. |
| Total Value Locked (TVL) | Total Value Locked (TVL) is the total value of all assets locked into a DeFi protocol or ecosystem. It is a metric often used to measure a protocol's growth and adoption. |
| Trade Price | The Trade Price is the price at which a consummated or executed transaction is recorded as. |
| TradFi | Traditional Finance (TradFi) refers to the financial system that exists apart from blockchain, crypto, and decentralized finance (DeFi), typically characterized by legacy financial institutions such as banks and large corporate financial enterprises that operate using a centralized model. |
| Tranche | A tranche is a collection of tokens that is separated and grouped based on various characteristics (rights over the asset, risk and maturity rates, etc.). For example, a tranche can represent a share of a class of a fund. |
| Trustless Transactions | Trusted Transactions (or Trusted Computing) is the concept of well-known branded (“Trusted”) institutions and central organizations to act as the trusted authorities for arbitrating and validating daily processing of financial transactions. A number of these transactions are managed through centralized networks performing automated checks, but many of these functions could be turned into codified smart contracts that are governed by decentralized consensus on a blockchain. |
| Trustline | Before an account can hold an asset another account issues, it must establish a Trustline, which is a persistent account-level ledger entry created with a change_trust operation. A Trustline is an explicit opt-in to hold a particular token, so it specifies both asset code and issuer. |
U
| Term | Meaning |
|---|---|
| Unresponsive Payee | Unresponsive Payee refers to any Token holder whose digital wallet has had no withdrawals or activity within the past one (1) year. |
| USDC | USDC (USD Coin) refers to a digital stablecoin pegged to the United States dollar. |
| Utility Token | Utility Tokens represent a points-based system that can be redeemed for access to a specified product or service. Trading and transactions in Utility Tokens are not usually regulated unless they are listed on multiple exchanges and treated/traded as Virtual Assets/Cryptocurrencies. A traditional finance comparison would be Membership points initiative, such as Emirates Skywards points. |
V
| Term | Meaning |
|---|---|
| Virtual Asset | Virtual Asset refers to digital representation of value that can be digitally traded and functions as 1) a medium of exchange 2) a unit of account 3) a store of value 4) but does not have legal tender status in any jurisdiction. A Virtual Asset is neither issued nor guaranteed by any jurisdiction and fulfils the above functions only by agreement within the community of users of the Virtual Asset; and is distinguished from Fiat Currency and E-money. |
| Virtual Asset Service Providers (VASP) | Virtual Asset Service Providers (VASP) are businesses that allow crypto trading, and payment transactions or conversions into other digital assets. These include MTFs, exchanges, brokers, ATMs, gaming sites, business incubators, and any other entity that deals in digital assets. They are also known as Virtual Asset Entities or Crypto Asset Entities. Most regulators define VASPs as businesses that carry out digital activities “for and behalf of another person." |
W
| Term | Meaning |
|---|---|
| Walled Garden | A Walled Garden refers to an environment that controls the user's access to network-based content and services. In effect, the Walled Garden directs the user's navigation within particular areas to enable access to a selection of “sponsored” material, preventing access to non-sponsored material. Although a walled garden does not always prevent users from navigating outside the walls, it often makes it extremely difficult to interact with content outside the environment. Contemporary examples of Walled Gardens are controlled environments, such as App stores for Google or Apple. |
| Wallet | A “Wallet” or “Wallets,” as applicable, means a digital wallet created on or linked to the Tokenization Platform. A Wallet is used to store a digital representation of something in it. Today most people have a “payment” wallet on their phones in which they store a digital representation of their credit & card details (Apple Pay, Google Pay, Samsung Pay, etc.) They may also have already downloaded an “Asset” wallet through which to hold an investment they have made such as Crypto, Event Ticketing, Collectibles, Gaming Tokens (examples would be a purchase of Microsoft Xbox and Sony PlayStation points to be used for in-game purchases). Most wallets are linked to Sponsored Apps being downloaded to a device so that the Sponsor can control the Token Protocols used in the wallet and to control (sponsored) security access to the wallet. |
| Web3 | Web3 is a decentralized internet infrastructure that enables global users to connect and interact with digital assets, websites, and apps without any centralized control. |
| Wholesale CBDC | Wholesale central bank digital currency (CBDC) is a currency issued by a central bank in digital form, designed for use among financial intermediaries to settle transactions involving tokenized assets. |