Glossary of Key Terminology

Lender - An individual or organization that provides funds to a borrower with the expectation of repayment, often with interest as compensation for risk.

Borrower - A person or entity that receives funds from a lender and commits to repaying the loan, usually with added interest.

Interest Rate - The percentage charged by a lender on the amount borrowed, expressed as an annual percentage rate (APR).

APY (Annual Percentage Yield) - A standardized measure that reflects the real rate of return on an investment or savings account over a year, accounting for the effect of compounding interest.

Loan - A specific amount of money lent to a borrower, expected to be repaid with interest.

Loan Agreement - A formal contract between a lender and a borrower outlining the loan terms, such as repayment schedule, interest rate, and other conditions.

Maturity - The time at which a loan or financial instrument must be repaid in full.

Maturity Date - The specific date when the principal amount of a loan or financial instrument is due.

Real-World Assets (RWAs) - Physical assets with tangible value, such as real estate or inventory, that can be bought, sold, or used as collateral for loans.

Collateral - An asset pledged by a borrower to secure a loan, which can be liquidated if the borrower defaults.

Liquidation - The process of converting assets into cash, often to pay off debt.

Collateral Liquidation - The act of selling pledged collateral to recover unpaid loan amounts.

Risk Assessment - A comprehensive evaluation of potential risks associated with a financial transaction or loan.

Non-custodial - A service where users maintain full control of their assets without entrusting them to a third-party custodian.

Token - A digital representation of value, managed and transferred using blockchain technology.

Contract - A legally binding document outlining terms and agreements between parties in a transaction or business arrangement.

Smart Contract - A self-executing digital contract that enforces and automates agreement terms via blockchain programming.

Liquidity - Pool A pool of funds or assets available for lending or trading on a decentralized finance (DeFi) platform.

Loan Origination - The comprehensive process of setting up a new loan, starting from application to disbursement.

Loan Originator - An individual or organization responsible for managing the loan origination process.

Collateral Administrator - A party tasked with managing and overseeing collateral assets used to secure a loan.

Loan Portfolio - A collection of loans or similar financial assets managed by a lender or financial institution.

Single Exposure - The total exposure or risk a lender has with a particular borrower or asset.

Corporate Bonds - Debt instruments issued by companies to raise capital, typically with a fixed interest rate and maturity date.

Delinquency - The state of missing a scheduled loan payment or failing to meet a financial obligation on time.

Non-performing Loan - A loan that has defaulted or has been overdue for a prolonged period and is unlikely to be fully repaid.

Bridge Financing - A short-term loan designed to provide immediate funding while waiting for longer-term financing to become available.

Revolving Loan - A flexible loan that allows the borrower to access funds up to a credit limit, repay, and then borrow again as needed.

Repayment Schedule - A detailed plan listing the amounts and dates of payments due over the life of a loan.