Terminology
It's dangerous to go alone - learn these.
Archcontroller
Smart contract which doubles up as a registry and permission gate. Borrowers are added or removed from the archcontroller by the operators of the protocol itself (granting/rescinding the ability to deploy controllers and/or markets), and the addresses of any controller factories, controllers or markets that get deployed through the protocol are stored here.
Base APR
The interest rate that lenders receive on assets that they have deposited into a particular market, in the absence of the penalty APR being enforced.
Borrow
To withdraw assets from a market that has a non-zero supply and reserve ratio less than 100%, with the intent of repaying the assets (plus any accrued interest) to the market either when the required purpose of using the assets has concluded or as a response to withdrawal requests.
Borrower
Both:
The counterparty that wishes to make use of a credit facility through a Wildcat market, and
The blockchain address that defines the parameters of a market and deploys the controller and market contracts that comprise it.
Capacity
The maximum amount of an asset that a borrower is looking to source via a market - the sum total of what all lenders can deposit and earn interest on.
Can be exceeded by the current supply of a market token depending on interest accrued.
Claim
Removing assets from the unclaimed withdrawals pool that were requested for withdrawal by a lender at the end of a withdrawal cycle.
Depending on the reserve ratio of the market when the withdrawal request associated with a claim was made, claiming may require the burning of market tokens (see Lenders for details).
Note that retrieving your deposits from a Wildcat market requires a withdrawal request and then a claim - it is a two transaction process with the conclusion of one withdrawal cycle in between.
Controller
Contains logic concerning parameters of markets deployed through it (e.g. maximum grace period, minimum penalty APR).
Controls APR adjustments and enforces reserve ratios of markets.
Imposes protocol fees (either lump-sum origination or APR-based) on markets.
Default
Event in which a counterparty has failed their obligations in some form or another, typically involving the unwillingness or inability of the borrower to deposit to a delinquent market after a lender has waited a sufficiently long period of time with an expired withdrawal request.
Gives rise to the right to arbitration or civil action in the courts.
Further defined in both the Service Agreement and the Master Loan Agreement between borrower and lender (if countersigned by the latter).
Delinquency
A market state wherein there are insufficient assets in the market to meet the reserve ratio as specified by the borrower.
Arises via the passage of time through interest if the borrower borrows right up to their reserve ratio.
Can also arise if a lender makes a withdrawal request and moves assets within the market into the unclaimed withdrawals pool.
A market being delinquent for an extended period of time (as specified by the grace period) results in the penalty APR being enforced in addition to the base APR and any protocol APR that may apply.
'Cured' by depositing sufficient assets into the market as to reattain the required reserve ratio.
Deposit
Escrow Contract
An auxiliary smart contract that is deployed in the event that the sentinel detects that a lender address has been added to a sanctioned list such as the OFAC SDN: this check is performed through the Chainalysis oracle.
Any assets relating to an attempted claim by the affected lender as well as any market tokens tied to their remaining deposit are automatically transferred to the escrow contract when blocked (either through an attempt to withdraw or via a call to a 'nuke from orbit' function found within the market).
Assets can only be released to the lender in the event that a) they are no longer tagged as sanctioned by the Chainalysis oracle, or b) the borrower specifically overrides the sanction.
Expired Withdrawal
A withdrawal request that could not be fully honoured by assets in the unclaimed withdrawals pool within a single withdrawal cycle.
Grace Period
Rolling period of time for which a market can be delinquent before the penalty APR of the market activates.
Note that the grace period does not 'reset' to zero when delinquency is cured. See grace tracker below for details.
Grace Tracker
Internal market parameter associated with the grace period.
Once a market becomes delinquent, begins counting seconds up from zero - when the value of the grace tracker exceeds the grace period, the penalty APR activates.
Once a market is cured of delinquency, begins counting seconds down to zero - the penalty APR continues to apply until the grace tracker value is below the grace period value.
Enforces the rolling nature of the grace period.
Lender
Market
Smart contract that accepts underlying assets, issuing market tokens in return.
Deployed by borrower through an associated controller.
Permissioned: only lenders that have been authorised on the associated controller by the borrower to deposit can interact.
Market Token
ERC-20 token indicating a claim on the underlying assets in a market.
Supply rebases after every non-static call to the market contract depending on the total current APR of the market: always redeemable 1:1.
Transferable to arbitrary addresses.
Can only be redeemed by authorised lender addresses (not necessarily the same one that received the market tokens initially).
Name and symbol prefixes are customisable in market creation, prepending to the name and symbol of the underlying asset.
Master Loan Agreement (MLA)
Defines expected behaviour and various covenants and representations concerning identity, usage of funds, security practices and various events that constitute default.
Sets jurisdiction for any arbitration or civil suits as the UK.
Must be signed by borrower when deploying a market using the protocol UI.
Is offered to lender to countersign when first encountering a market via the protocol UI (which can be signed or declined depending on lenders preference, or whether counterparties have entered into another agreement).
Offered by Wildcat as protection for lenders.
As of 20th December 2023, not yet enforced: drafting in progress.
Penalty APR
Additional interest rate (above and beyond the base APR and any protocol APR imposed by a market controller) that is applied for as long as the grace tracker value for a market is in excess of the specified grace period.
Encourages borrower to responsibly monitor the reserve ratio of a market.
No part of the penalty APR is receivable by the Wildcat protocol itself (does not inflate the protocol APR if present).
Pending Withdrawal
A withdrawal request that has not yet expired (i.e. was created in the current withdrawal cycle).
Protocol APR
Percentage of base APR that accrues to the Wildcat protocol itself.
Fixed parameter in controller contracts, applying to all markets deployed by said controller.
Can be zero.
Does not increase in the presence of an active penalty APR (which only increases the APR accruing to lenders).
Example: market with base APR of 10% and protocol APR of 20% results in borrower paying 12% when penalty APR is not active.
Reserve Ratio
Intended to provide a liquid buffer for lenders to make withdrawal requests against, partially 'collateralising' the credit facility through lenders' deposits.
Increases temporarily when:
there are pending or expired withdrawals which cannot be honoured by the contents of the unclaimed withdrawals pool (increased until resolved).
A market which has insufficient assets in the market to meet the reserve ratio is said to be delinquent, with the penalty APR potentially being enforced if the delinquency is not cured before the grace tracker value exceeds that of the grace period for that particular market.
Sentinel
Smart contract that ensures that addresses which interact with the protocol are not flagged by the Chainalysis oracle for sanctions.
Service Agreement
Presents - among other things - protocol terminology and logic, and constitutes a waiver of protocol responsibility for any damages incurred via its use.
For the full text, please see Service Agreement.
Supply
Current amount of underlying asset deposited in a market.
Tied 1:1 with the supply of market tokens (rate of growth APR dependent).
Can only be reduced by burning market tokens as part of a withdrawal request or claim.
Reserve ratios are enforced against the supply of a market, not its capacity.
Capacity can be reduced below current supply by a borrower, but this only prevents the further deposit of assets until the supply is once again below capacity.
Unclaimed Withdrawals Pool
A sequestered pool of underlying assets which are pending their claim by lenders following a withdrawal request.
Assets are moved from market reserves to the unclaimed withdrawals pool by burning market tokens at a 1:1 ratio (reducing the supply of the market).
Underlying Asset
The asset which the borrower is seeking to borrow by deploying a market - for example DAI (Dai Stablecoin) or WETH (Wrapped Ether).
Can be any ERC-20 token.
Vault
See market.
If you see this term anywhere, it's a mistake that we should have cleared up!
Withdrawal Cycle
Period of time that must elapse between the first withdrawal request of a 'wave' of withdrawals and assets in the unclaimed withdrawals pool being made available to claim.
Withdrawal cycles do not work on a rolling basis - at the end of one withdrawal cycle, the next cycle will not start until the next withdrawal request.
In the event that the amount being claimed in the same cycle across all lenders is in excess of the reserves currently within a market, all lenders requests within that cycle will be honoured pro rata depending on overall amount requested.
Intended to prevent a run on a given market (mass withdrawal requests) leading to slower lenders receiving nothing.
Can have a value of zero, in which case each withdrawal request is processed - and potentially added to the withdrawal queue - as a standalone batch.
Withdrawal Queue
Internal data structure of a market.
All withdrawal requests that could not be fully honoured at the end of their withdrawal cycle are batched together, marked as expired and added to the withdrawal queue.
FIFO (First-In-First-Out): when assets are returned to a market which has a non-zero withdrawal queue, assets are immediately routed to the unclaimed withdrawals pool and can subsequently be claimed by lenders with the oldest expired withdrawals first.
Withdrawal Request
An instruction to a market to transfer reserves within a market to the unclaimed withdrawals pool, to be claimed at the end of a withdrawal cycle.
A withdrawal request made of a market with non-zero reserves will burn as many market tokens as possible 1:1 to fully honour the request.
Any amount requested - whether or not it is in excess of the market reserves - is marked as a pending withdrawal, either to be fully honoured at the end of the cycle, or marked as expired and added to the withdrawal queue, depending on the actions of the borrower during the cycle.
Whitelisted
The state in which either:
A borrower address has been added to the archcontroller and is permitted to deploy controllers and markets, or
Also known as 'authorised'.
Last updated