Glossary

Short definitions, alphabetical. Every number on this page is a contract parameter or a design target from the litepaper, not a measurement.

Ballast

Ballast is the junior tranche: perpetual and rolling, it absorbs losses first and earns the levered residual after Hull's fixed accrual. Withdrawals face a 48-hour cooldown and must satisfy the subordination floor.

basis

The gap between a derivative's price and the spot price of its underlying. Perpetuals have no expiry to force convergence; the funding rate does that work instead.

block states (latest / safe / finalized)

Monad blocks move through Proposed, Voted, Finalized, and Verified, surfaced over RPC as latest (speculative), safe (validator-backed), and finalized (irreversible). Read finalized before treating anything as settled.

builder code

An identifier attached to orders so a venue attributes part of the trading fee to the integrator that originated the flow. Vessel's fee design includes execution rebates via a Perpl builder code; the deployed contracts currently hedge SimVenue SIMVENUE — SIMULATED, not Perpl. On Perpl, a fill's gross fee f already contains the builder portion bfa — the two are never summed.

CLOB

Central limit order book: an exchange that matches resting limit orders by price-time priority. Vessel's short leg runs on a perp CLOB.

conservation invariant

The accounting identity ΔNAV_Hull + ΔNAV_Ballast + ΔReserve + fees = G for every epoch: gross P&L is fully attributed, nothing appears or disappears. The litepaper states it is enforced in code and fuzz-tested; the contracts are not yet published for independent verification.

cooldown

The 48-hour delay on Ballast withdrawals. A withdrawal must also satisfy the subordination floor.

crank / keeper

A crank is a permissionless transaction that advances protocol state; a keeper is whoever sends it. Vessel's keepers execute margin top-ups, rebalancing, and funding harvest, none of which requires a privileged role.

credit event

Impairment of Hull principal. It can happen only after a shortfall has exhausted both Ballast NAV and the Reserve.

delta band

The tolerance around zero net delta: within 1% of gross notional. A band breach or a 4-hour timer triggers a rebalance.

epoch

The accounting interval over which the waterfall runs and the conservation invariant must hold. Accrual is daily; NAV updates continuously.

funding rate

The periodic payment between longs and shorts that tethers a perpetual's price to spot; the litepaper calls it "the market price of leverage." When funding is positive, shorts collect it, and Vessel's short leg is where that yield enters the book.

gas-on-limit

Monad charges gas on the limit, not on what executes: gas_paid = gas_limit × price_per_gas. Blocks are built before they are executed, so consumption is unknown at inclusion time; set limits tightly.

Gate-0

Vessel's shipping discipline: every artifact ships verified or visibly unverified. It is the gate before anything is called live.

Hull

Hull is the senior tranche: fixed-maturity, transferable series that redeem principal plus a fixed yield at maturity, with early exit by secondary sale only. Its rate is a contract parameter, not a performance figure: r_H = clamp(EWMA_30d(net funding APR) × (1 − h), 0, r_cap), with haircut h = 40% and r_cap = 15% APR.

IVenue

The interface the engine hedges through, so the venue can change without touching core accounting. Today the implementation behind it is SimVenue; Perpl is next.

NAV

Net asset value: the accounting value of a tranche's claim on the book. Vessel's NAV updates continuously; the waterfall attributes results daily.

net delta

Signed spot exposure plus perp exposure. Zero is fully hedged; Vessel holds it inside the delta band.

Reserve

A protocol-owned buffer targeted at 2% of TVL, funded from half of the protocol fee until the target is met. It smooths transient negative funding and absorbs shortfall after Ballast and before Hull.

series (fixed-maturity)

One Hull issuance with a set maturity — 4 weeks at launch — and its own transferable token. The shape is a deliberate fit for Pendle's fixed-maturity model; that is a design decision, not a listing.

shortfall

A negative gross result for an epoch. It is absorbed in order: Ballast NAV, then the Reserve, then Hull principal; the last step is a credit event.

SimVenue

SIMVENUE — SIMULATED The simulated venue the deployed contracts hedge against today: it implements IVenue and has an owner-settable funding rate. Perpl integration is next.

subordination floor

The requirement B / (H + B) ≥ θ_min = 20% at all times: Ballast must stay at least a fifth of tranche capital. It constrains new Hull issuance and Ballast withdrawals.

svUSD

The staked variant of vUSD; staking directs engine yield to svUSD holders. Phase 3, after audit.

SY / PT / YT

Pendle's listing standard. SY (Standardized Yield, specified in ERC-5115, a draft authored by Pendle) wraps a yield-bearing asset behind one interface; PT (principal token) redeems the underlying 1:1 at maturity; YT (yield token) collects the yield until then. PT and YT are minted from SY — see docs.pendle.finance.

vUSD

A dollar token minted 1:1 against the delta-neutral book and overcollateralized by Ballast plus the Reserve. Phase 3, after audit; the litepaper's standing claim is that "no privileged mint path exists in any Vessel contract."

waterfall

The daily accrual order: a 10% protocol fee on max(G, 0) (half to the Reserve until its target, the rest to treasury), then Hull's fixed accrual A_H = r_H × H × Δt, then the residual to Ballast. Losses follow their own ordering — see shortfall.