Glossary

A comprehensive reference of terms, acronyms, and concepts used throughout PredMart's documentation and interface.

A

APR (Annual Percentage Rate)

The annualized interest rate charged to borrowers, without compounding. PredMart's borrow APR is determined by the pool's utilization rate through the kinked interest rate model. Unlike APY, APR does not account for the effect of compounding.

APY (Annual Percentage Yield)

The annualized return earned by lenders, accounting for the effect of continuous compounding. PredMart's supply APY is derived from the borrow APR, utilization rate, and reserve factor. Supply APY is always lower than borrow APR due to utilization dilution and the reserve factor.

Ask Side

The sell side of an orderbook — the orders offering to sell shares at specified prices.

B

Bad Debt

Debt that cannot be recovered through liquidation because the borrower's collateral is worth less than their outstanding debt (an "underwater" position). Bad debt is socialized — absorbed by the lending pool, reducing the value of all lenders' pUSDC shares proportionally. PredMart's risk parameters are designed to minimize bad debt, but it remains a possibility, particularly during sudden market resolutions.

Basis Points (BPS)

A unit of measurement equal to 1/100th of a percentage point. 100 BPS = 1%. PredMart's pool cap is expressed in basis points — see Protocol Constants.

Borrow Index

A monotonically increasing number that tracks the cumulative interest factor across all borrowers. When you borrow, your position records the current borrow index. Your debt at any future time is: Original Borrow × (Current Index / Index at Borrow Time). This allows efficient per-second interest accrual without iterating over every borrower.

Borrow Shares

An internal accounting mechanism used by the smart contract to track each borrower's share of the total outstanding debt. Similar to how pUSDC shares represent lender ownership, borrow shares represent a borrower's proportion of total debt. As interest accrues, each borrow share represents a larger amount of USDC owed.

C

CLOB (Central Limit Order Book)

The orderbook matching engine used by Polymarket for trading. Unlike AMM-based exchanges (like Uniswap), CLOBs match buy and sell orders at specific prices, providing tighter spreads and more accurate price discovery. PredMart fetches real-time prices from Polymarket's CLOB.

Full Collateral Seizure

PredMart's liquidation model where 100% of a borrower's collateral is seized when their health factor drops below 1.0. The seized collateral is sold on Polymarket's CLOB, debt is repaid from proceeds, the 5% liquidator fee is paid, and any residual USDC is retained by the lending pool. Similar to perpetual futures liquidation on centralized exchanges (Binance, Bybit, OKX) — the borrower forfeits the entire collateral value, not just the debt amount.

Collateral

Assets deposited into PredMart to secure a loan. PredMart accepts Polymarket outcome shares (CTF ERC-1155 tokens) as collateral. The collateral is held by the smart contract and can be seized if the borrower's position becomes unhealthy.

CTF (Conditional Token Framework)

An ERC-1155 token standard developed by Gnosis for representing conditional outcomes. Polymarket uses CTF to create outcome tokens — each possible outcome in a market corresponds to a unique token ID within the CTF contract. The CTF contract on Polygon is at 0x4D97DCd97eC945f40cF65F87097ACe5EA0476045.

D

Per-Market Cap

A liquidity-based ceiling on total borrowing per market. The cap is dynamic — it shrinks for thin or volatile markets — and is intentionally not exposed as a published formula. See Oracle Pricing & Borrow Caps.

E

Entry Fee

A one-time, risk-based fee taken from your deposit when you open a borrow or leverage position. It scales with risk (higher for lower-priced shares, up to a cap) and accrues to lenders. See Protocol Constants.

EIP-712

An Ethereum standard for typed structured data signing. PredMart uses EIP-712 for borrow, withdraw, and leverage intents — the user signs a structured message (not a raw transaction), and PredMart's relayer submits the actual transaction. This enables gasless operations while maintaining cryptographic proof of user authorization.

ERC-20

The standard Ethereum token interface for fungible tokens. USDC and pUSDC are both ERC-20 tokens.

ERC-1155

A multi-token standard that allows a single contract to manage multiple token types. Polymarket's CTF shares use ERC-1155 — each outcome is a different token ID within the same contract, rather than a separate contract per token.

ERC-4626

The Ethereum standard for tokenized vaults. PredMart's lending pool implements ERC-4626, which defines a standard interface for depositing an underlying asset (USDC), receiving yield-bearing shares (pUSDC), and redeeming shares for the underlying asset plus accrued yield.

F

FOK (Fill-or-Kill)

An order that must fill completely and immediately or be cancelled — it never rests on the orderbook. PredMart uses FOK for its automated CLOB orders, including the auto-sell of seized collateral: the order is signed at the worst acceptable price, but by FOK semantics it fills at the best available bid in a single atomic shot. This prioritizes execution certainty over price precision. See Liquidation.

G

GTC (Good-'Til-Cancelled)

An order type that remains active on the orderbook until it is filled or manually cancelled. PredMart does not use GTC for its automated orders — seized-collateral auto-sell and other CLOB orders are Fill-or-Kill (see FOK above), which must fill in a single shot or cancel rather than resting on the book.

H

Health Factor

The primary risk metric for borrowing positions. Calculated as: (Collateral Amount × Price × Liquidation Threshold) / Debt. A health factor above 1.0 means the position is safe. Below 1.0, the position is eligible for liquidation. Below 0.95, the position can be fully liquidated in a single transaction. See Risk Parameters.

K

Kink

The inflection point in PredMart's interest rate model where the rate curve changes slope dramatically. Set at 80% utilization. Below the kink, rates increase gently; above the kink, rates increase steeply. This design protects lender liquidity by making excessive borrowing very expensive. See Protocol Constants for the live rates.

L

LeverageAuth

The EIP-712 typed data message that users sign to authorize leverage operations. Contains fields for borrower, allowedFrom (the Gnosis Safe address where USDC must be sent), tokenId, maxBorrow, nonce, and deadline. The allowedFrom field is a critical security feature that prevents the relayer from redirecting borrowed funds.

Liquidation

The process of seizing a borrower's collateral when the position's health factor drops below 1.0. Liquidation is executed by PredMart's dedicated liquidator and involves seizing 100% of the collateral, selling it on the CLOB, repaying the debt, deducting the liquidator fee, and retaining any residual USDC in the lending pool (no refund to the borrower — full-liquidation model). See Liquidation and Protocol Constants.

Liquidator

The backend actor authorized to execute liquidations on unhealthy positions. The liquidator receives a fee on the debt amount for each liquidation executed — see Protocol Constants.

Liquidator Fee

The fee the liquidator receives as compensation for executing a liquidation, calculated on the debt amount. See Protocol Constants for the current value.

Liquidation Buffer

The gap between the LTV ratio (maximum borrowing limit) and the liquidation threshold. This buffer gives borrowers time to react to adverse price movements before liquidation triggers. See Protocol Constants for the current buffer.

Liquidation Threshold

The effective LTV at which a position becomes liquidatable. Calculated as LTV + Liquidation Buffer. When a borrower's debt exceeds their collateral value times the threshold, their health factor drops below 1.0. See Protocol Constants.

LTV (Loan-to-Value)

The maximum percentage of collateral value that can be borrowed. PredMart uses a flat LTV at all share prices. See Protocol Constants for the current value.

M

MATIC

The native gas token of the Polygon network. Required to pay transaction fees on PredMart. Gas costs on Polygon are extremely low — typically less than $0.01 per transaction.

Mark Price

PredMart's protocol reference price for a Polymarket outcome share. Same value as the oracle price — the UI uses "Mark" for brevity in tables and breakdowns. It is the average price to sell $1,000 of shares into the order book (manipulation-resistant), signed by the oracle, and used by the contract for health factor, LTV, and liquidation checks. See Oracle Pricing & Borrow Caps.

Meta-Transaction

A transaction pattern where the user signs a message (free) and a third party (the relayer) submits the actual blockchain transaction and pays the gas fee. PredMart uses meta-transactions for borrowing, collateral withdrawal, and leverage operations to enable gasless operations and ensure oracle-signed prices are included.

N

Nonce Separation

PredMart's security model uses separate nonces for each operation type: borrowNonce, withdrawNonce, and leverageNonce. This prevents cross-operation replay attacks where a signed intent for one operation type could be maliciously submitted for a different operation type.

Midpoint Price

The average of the best bid and best ask on an orderbook: (best_bid + best_ask) / 2. Polymarket often displays this as the market price. PredMart's oracle uses a depth-weighted Mark price instead — see Oracle Pricing & Borrow Caps.

P

Polygon

An EVM-compatible Layer 2 blockchain (formerly known as Matic Network). PredMart and Polymarket both operate on Polygon, offering very low gas fees (~$0.01 per transaction) and fast block times (~2 seconds).

pUSDC

PredMart's yield-bearing vault share token. When you deposit USDC into the lending pool, you receive pUSDC. The value of 1 pUSDC in USDC terms increases over time as borrowers pay interest. pUSDC is an ERC-20 token with 12 decimals. See Lending.

Profit Fee

A fee charged on profits when leveraged positions close with gains (surplus exceeds initial equity). The 10% profit fee is split between lenders and the protocol (see Protocol Constants). Does not apply to regular borrows or positions closing at a loss.

Protocol Fee Pool

A reserve that accumulates the protocol's share of profit fees from leveraged position closes. Separate from the main reserves which hold the reserve factor portion of interest income.

R

Relayer

PredMart's backend service that submits meta-transactions to the blockchain. The relayer fetches oracle prices, signs them, and submits borrow, withdrawal, and liquidation transactions on behalf of users. The relayer pays gas fees for these operations.

Reserve Factor

The percentage of interest income directed to PredMart's protocol reserves rather than to lenders. See Protocol Constants for the current value. Reserves serve as a protocol revenue source and a small buffer against bad debt.

Resolution

The process by which a Polymarket market's outcome is determined. When a market resolves, winning shares become redeemable for $1.00 USDC each, and losing shares become worthless. See Market Resolution.

S

SIWE (Sign-In with Ethereum)

An authentication standard where users prove wallet ownership by signing a message. PredMart uses SIWE for login — you sign a message (free, no gas) to prove you own your wallet, and PredMart issues a JWT for session authentication.

Slope 1 / Slope 2

The two slopes of PredMart's kinked interest rate model. Slope 1 is the gentle rate increase below the kink (80% utilization). Slope 2 is the steep rate increase above the kink, designed to strongly discourage excessive borrowing and rapidly restore available liquidity. See Protocol Constants for the live values.

T

Timelock

A governance mechanism that enforces a mandatory waiting period before sensitive parameter changes take effect. PredMart uses timelocks for oracle address changes, LTV parameter updates, and contract upgrades. The timelock can only be increased (one-way ratchet), preventing the admin from reducing the waiting period.

Token ID

A unique identifier for a specific Polymarket outcome within the CTF contract. Each outcome in every Polymarket market has a different token ID. Positions in PredMart are tracked per-user, per-token-ID.

U

USDC / USDC.e

USD Coin — a stablecoin pegged to the US dollar. PredMart uses USDC.e (bridged USDC) on the Polygon network. The contract address is 0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174. USDC has 6 decimal places.

UUPS (Universal Upgradeable Proxy Standard)

A proxy pattern for upgradeable smart contracts. PredMart's lending pool uses UUPS — the proxy contract holds all state, and the implementation contract (containing the logic) can be upgraded by the admin through the timelocked governance process.

Utilization Rate

The percentage of the lending pool's total assets that are currently borrowed: Utilization = Total Borrowed / Total Assets. Higher utilization means higher interest rates for both borrowers and lenders. See Interest Rates.

W

WAD

A fixed-point decimal representation using 18 decimal places, commonly used in Ethereum smart contracts. 1 WAD = 1e18 = 1,000,000,000,000,000,000. Prices, rates, and ratios in PredMart's contract are expressed in WAD scale. For example, a price of $0.65 is represented as 0.65e18 = 650,000,000,000,000,000.