Appendix

Glossary

Automated Market Maker (AMM) -- a protocol used in the decentralized exchanges to determine the token’s price through a mathematical process instead of the traditional order book in centralized exchanges.

Binance USD (BUSD) -- a currency that is pegged with USD in a ratio of 1:1, issued by Binance (cooperated with Paxos), approved and regulated by New York State Department of Financial Services (NYDFS).

Blockchain -- a secure,reliable, decentralized distributed ledger that is fully auditable and difficult to counterfeit. It is utilized in the financial system requiring high credibility. It leads to a new form of a financial system called “Decentralized Finance” or “DeFi”.

Centralized Exchanges (CEXs) -- platforms using intermediaries to facilitate the transactions, namely buying, selling, trading either for fiat currencies and digital currencies.

Centralized Finance (CeFi) -- a financial system where a financial institution regulates transactions.

Decentralized Application (DApp) -- a financial application without an intermediary, running on a peer-to-peer (P2P) network on blockchain.

Decentralized Exchanges (DEXs) -- platforms for buying, selling, trading between digital currencies, running on a peer-to-peer (P2P) network, where users are allowed to trade their assets without any intermediaries.

Farm/Stake or Farming -- a means to farm in the cryptocurrency world where the users are liquidity providers by adding tokens into a liquidity pool. They can choose DeFi platforms which give rewards as agreed or contracted, similar to farming or sowing and the users can get reward and can harvest the tokens of the platform, which return as the ratio of token staked (Staking) in order to become a reward for providing liquidity.

Harvest -- a method to gain or attain the outcome from Farm/Staking/Farming without unstaking.

Impermanent Loss -- the loss of the capital temporarily. It can happen when the liquidity is provided to the liquidity pool and the contracted asset price fluctuates in a downturn compared to the contracted price. The more changes it happens, the more chances for impermanent loss or temporary loss can ensue. In this case, loss or losing means the value at the withdrawal time is less than the value at the deposit time.

Liquidity Mining -- a process to decode the liquidity in order to obtain rewards in the form of tokens on DeFi platforms as identified in an agreement or covenant.

Liquidity Pool -- a liquidity fund in which the users can place currency pairs to maintain their equal value (in a ratio of 50:50) in order to provide liquidity on Decentralized Exchanges (DEXs).

Liquidity Provider -- a user who provides liquidity into the market by depositing trading pairs into the pool and obtaining transaction fees from the exchanged pairs.

Market Capitalization (Market Cap) -- the highest total value of the asset, calculated by multiplying the current price and the total amount of asset. This means to place importance on the value of the asset rather than the security.

Proof of Stake (PoS) -- an acceptable algorithm to build consensus on blockchain instead of Proof of Work by staking tokens in the system in an exchange of the rights to validate and verify transactions.

Proof of Staked-Authority (PoSA) -- a procedure of consensus on blockchain by validators, with the combination of Proof of Work (PoW) and Proof of Authority (PoA). Therefore, the speed per block is higher and the fee is lower.

Smart Contract -- programmable coding embedded in blockchain that operates according to a set of instructions defined by itself, which is transparent and verifiable.

Stake or Staking -- a process in which investors pledge their assets and make a contract in order to obtain “Reward” in return.

Swap -- an action to exchange a token to another token. This leads to price fluctuations of assets, which depend on the exchange volume compared to the liquidity pool.

Total Value Locked (TVL) -- the total number of pledged assets which can indicate the capability to build enough supply for demand.

Unstake -- a practice to terminate a contract of staking on the system.