Glossary
General
| Term | Definition |
|---|---|
| Clearing House | margin/accounting engine of the protocol |
| AMM | means an Automated Market Maker is Velocity’s source of constant liquidity that is based on the constant product formula x*y=k balancing the reserves. |
| Keeper Network | refers to the network of Keeper Bots on Velocity that facilitates the exchange of liquidity. For more information, read Keeper Bots |
| JIT | means to Just-In-Time. |
| JIT Auction | a “Just-in-Time” Auction refers to the dutch auction mechanism that lets Market Makers provide liquidity to Takers. |
| DLOB | means the Decentralised Limit Order Book — the off-chain orderbook of resting on-chain limit orders, maintained and matched by the Keeper Network. Orders that are not filled during the JIT Auction rest on and are matched against the DLOB. |
| Market Makers / Makers | refers to parties on the platform that provides liquidity to the exchange. Liquidity ‘provided’ by Market Makers can be ‘taken’ by Takers. Market Makers includes parties that place orders on Velocity with the ‘Post-Only’ function. This means the order will be placed on the decentralised orderbook and will only add to the liquidity available. Market Makers also include parties that provide liquidity via the JIT mechanism. |
| Takers | refer to users on the platform that ‘take’ liquidity from the exchange. Takers take liquidity made available by Market Makers or Velocity’s AMM. |
| Per-Market Leverage | market-specific leverage caps: each perpetual market defines its own maximum leverage (max_margin_ratio on the position), and the effective leverage applied is the lower of the account-level limit and the market-level limit (effective_margin_ratio = min(position.max_margin_ratio, account.max_margin_ratio)). Lets high-risk markets be capped without restricting more stable ones. See Per-Market Leverage. |
| Amplify | a leveraging solution that increases exposure to yield-generating assets (e.g. dSOL, JLP, JitoSOL) through recursive borrowing: a user deposits a yield-bearing Collateral Asset via Velocity Earn’s Borrow/Lend program, the system automatically borrows a Borrowing Asset against it up to the chosen leverage ratio, then converts the borrowed asset back into the Collateral Asset to increase notional exposure and amplify yield. See Amplify. |
| Builder Code | Velocity’s per-order monetization system for third-party frontends: a builder registers a RevenueShareAccount, users approve the builder and a max fee (denominated in tenths of a basis point, e.g. feeTenthBps) via changeApprovedBuilder, and on order fill the builder fee accrues to the user’s RevenueShareEscrow before being swept to the builder’s account on settlePnl. See Builder Codes. |
| Longing | means you are speculating on the price of the asset going up. |
| Shorting | means you are speculating on the price of the asset going down. |
| TWAP | means Time Weighted Average Price which is the average price of the Oracle over a specified period of time. This approximation is calculated on-chain during program interactions with the account. |
Market Info
| Term | Description | Example |
|---|---|---|
| Index / Oracle Price | is the price of the underlying asset (currently: as reported by Pyth). | $201.01 |
| Mark Price | is the price of the relevant market. | $201.05 |
| Funding Rate | refers to 1/24 the average premium every hour;if positive, longs pay shorts. if negative, shorts pay longs; see Funding Rates for more details | .0012% |
| Open Interest | refers to the total size of all positions (long and short) in the relevant market. | 181 SOL |
| 24h Volume | refers to the total volume traded in the past day in the relevant market. | $1.04M |
Position Table
| Term | Description | Example |
|---|---|---|
| Market | means a base / quote asset pair. | SOL/USD |
| Direction | means the position’s bet on price change. | LONG,SHORT |
| Size | means the position’s base asset value. | 2.3555 SOL |
| Notional | means the position’s quote asset value. | $1,000 |
| Entry Price | means the average price paid (cost basis) for acquiring position. | $200 |
| Exit Price | means the average price realised if closing entire position. | $200 |
| Liquidation Price | means the soft estimate of price where liquidation of the account will occur. | None |
| P&L (Profit & Loss) | means the Profit and/or Loss of position;Calculated on difference between EXIT PRICE and ENTRY PRICE. | $0 |
| Action | Opens modal for reducing/closing position. | ClosePosition |
| Term | Description | Example |
|---|---|---|
| Total Collateral | means the total available USD value of weighted collateral and P&L for margin trading | 101.01 |
| Unrealised P&L | means the sum of P&L available in all open positions that have not been realised (settled) by the user yet. | 1 |
| Unrealised Funding P&L | means the unrealised amount collected/paid for funding payments. (will be automatically realised upon next user action) | .01 |
| Free Collateral | means the value of collateral that can be used to open new risk-increasing positions. | 0.5 |
| Leverage | means Total Notional Position Size / Total Collateral. | 5x |
| Margin Ratio | means Total Collateral / Total Notional Position Size. | 20% |
| Maintenance Margin Req. | is the margin ratio at which users will liquidate back up to the liquidation buffer. | 5% |
maintenanceRatio | means the minimum margin-to-notional ratio a position can fall to before it is liquidated. | 3% (SOL-PERP) |
AMM Specific
| Term | Definition |
|---|---|
| K | is the curve invariant, currently for constant product;k = base_asset_reserve * quote_asset_reserve |
| Base Asset Reserve | means the virtual base reserves for a market (SOL reserves). |
| Quote Asset Reserve | means the virtual quote reserves for a market (e.g. USDT reserves in a SOL/USDT virtual pool). |
| Peg Multiplier | means the magnitude of the quote asset reserve. For instance, one virtual quote asset reserve is a peg multiplier amount of the quote asset. A peg multiplier ensures that the base asset reserve and the quote asset reserve are balanced at the initialisation of the curve while ensuring that the starting price of the pool is equivalent to the oracle price of the base asset at initialisation. |
| Reserve Price | in the AMM, is defined as (quote_asset_reserve * peg_multiplier) / base_asset_reserve. It is the true reserves price prior to any spread logic. |
| Bid Price | is the Price available to sell from the AMM, before slippage. |
| Ask Price | is the Price available to buy from the AMM, before slippage. |
| Mark Price | means the Market Price. Average of current Bid and Ask Price. |
| Oracle Price | means the latest composite price from oracles. Oracle price is interchangeable with index price. |
| Repeg | means modifying the peg multiplier which means re-pegging the curve such that the mark price is closer to the oracle price. |
| Adjusting K | means modifying the curve’s invariant k by scaling the base/quote asset reserves. For instance, this modifies the default slippage of a swap. |
| Terminal Price | means the mark price if all users atomically closed their positions and no repegs/k adjustments occurred (should be equal to the peg multiplier if all k adjustments were done during a balanced market). |
Users
| Term | Definition |
|---|---|
| base asset amount | The amount of base currency (e.g. SOL-PERP) held by a single user. |
| net user position | Current longs - shorts in a given market. |
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