Skip to main content

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. PredMart's depth gate measures ask-side depth to determine how much buying pressure exists in the market, which indicates how efficiently seized collateral can be sold during liquidation.

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: poolCapBps = 500 means 500 BPS = 5%.

Borrow Haircut​

A 0.5% safety buffer applied by PredMart's backend when calculating the maximum borrow amount. The backend returns 99.5% of the theoretical maximum to account for rounding differences and timing between the API response and on-chain execution. This prevents transactions from reverting due to minor discrepancies.

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.

Close Factor​

The maximum percentage of a borrower's debt that can be repaid in a single liquidation. PredMart uses a close factor of 50% when the health factor is between 0.95 and 1.0, and 100% when the health factor is below 0.95. This graduated approach partially restores position health in mild cases and allows full closure in severe cases.

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​

Depth Gate​

PredMart's system for dynamically limiting how much USDC can be borrowed against each token based on the real liquidity depth of that token's Polymarket orderbook. The depth gate samples ask-side depth every 60 minutes, computes the 25th percentile over 7 days, and applies a graduated safety divisor based on how long the token has had depth data. See Depth Gate.

E​

EIP-712​

An Ethereum standard for typed structured data signing. PredMart uses EIP-712 for borrow and withdraw intents — the user signs a structured message (not a raw transaction), and PredMart's relayer submits the actual transaction. This enables gasless borrowing and withdrawal 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 type that must be filled immediately and completely, or it is cancelled entirely. PredMart's auto-sell system uses FOK orders for small seized collateral positions that are below the minimum limit order size.

G​

GTC (Good-'Til-Cancelled)​

An order type that remains active on the orderbook until it is filled or manually cancelled. PredMart's auto-sell system uses GTC limit orders for standard-sized seized collateral, placing them at the current best bid price for optimal execution.

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 (5% to 25% APR). Above the kink, rates increase steeply (25% to 300% APR). This design protects lender liquidity by making excessive borrowing very expensive. See Interest Rates.

L​

Liquidation​

The process of seizing a borrower's collateral to repay their debt when the position's health factor drops below 1.0. Liquidation is executed by PredMart's relayer and involves repaying some or all of the debt and taking the corresponding collateral (plus a 5% bonus). See Liquidation.

Liquidation Bonus​

The 5% bonus that the liquidator receives on seized collateral in above-water liquidations. For every $100 of debt repaid, the liquidator receives $105 worth of collateral. This compensates for the operational cost of running the liquidation infrastructure.

Liquidation Buffer​

The 10 percentage point 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. For example, if LTV is 60%, the liquidation threshold is 70%.

Liquidation Discount​

The 10% discount applied in underwater liquidations (where collateral value is less than debt). The liquidator pays 90% of the collateral's value and receives all the collateral. The unrecovered debt becomes bad debt.

Liquidation Threshold​

The effective LTV at which a position becomes liquidatable. Calculated as LTV(price) + Liquidation Buffer (10%). When a borrower's debt exceeds their collateral value times the liquidation threshold, their health factor drops below 1.0.

LTV (Loan-to-Value)​

The maximum percentage of collateral value that can be borrowed. PredMart uses a dynamic, price-dependent LTV curve defined by 7 anchor points, ranging from 2% (at $0.00) to 75% (at $1.00). See Risk Parameters.

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.

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 and collateral withdrawal to enable gasless operations and ensure oracle-signed prices are included.

Midpoint Price​

The average of the best bid and best ask on an orderbook: (best_bid + best_ask) / 2. PredMart uses the CLOB midpoint price as the oracle price for collateral valuation.

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.

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. Currently 5% — lenders receive 95% of interest generated. 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 (25%) is the gentle rate increase below the kink (80% utilization). Slope 2 (1375%) is the steep rate increase above the kink, designed to strongly discourage excessive borrowing and rapidly restore available liquidity.

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 anchor 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.