Glossary

Plain-English definitions plus the formal math where it matters. Cross-linked back to the product pages where each term is derived.

APR (Annual Percentage Rate)

The interest rate quoted on an annualized basis without compounding. 12% APR means 12% per year if held for a year, applied linearly. Used throughout the rate card.

APY (Annual Percentage Yield)

Like APR but assuming compounding over the period. Lender returns are quoted as APY because re-lent interest re-accrues. For most positions on Forge, APR ≈ APY because the protocol accrues interest per block but does not auto-compound principal.

Bootstrap Loan

A Forge loan type where the protocol mints a .qom domain on the borrower's behalf, stakes it into QNS Staking, and routes the staking emissions back to retire the debt. The deleveraging ODE is

$$\frac{\mathrm dD}{\mathrm dt} = r_b\,D - (1-\alpha)\,\bar e\,\bar p,$$

with closed-form payoff time

$$t^\* = \frac{1}{r_b}\,\ln\!\!\left(\frac{(1-\alpha)\,\bar e\,\bar p}{(1-\alpha)\,\bar e\,\bar p - r_b\,D_0}\right).$$

See Bootstrap Loan.

Cash-flow yield on debt ($\gamma$)

Bootstrap-specific: the dimensionless ratio of annualized lien-routed cash flow to the loan's principal,

$$\gamma = \frac{(1-\alpha)\,\bar e\,\bar p}{D_0}.$$

Loan deleverages in finite time iff $\gamma > r_b$.

Close factor

The maximum percentage of a borrower's debt that a single liquidation transaction can retire. Forge uses $\theta = 50\%$. Aave v3 uses 50% escalating to 100% when $\mathrm{HF} < 0.95$; Morpho Blue uses 100%. Our flat 50% is calibrated for thinner keeper depth on QOM.

Collateral

The asset a borrower deposits to secure a loan. ZAP for Direct Loans; the staked .qom itself (with ZAP-emission cash flow) for Bootstrap Loans and the Loaded NFT Pool.

Collateral PV (Loaded NFT Pool)

The on-chain present value of a staked .qom position, in ZAP:

$$V_Z(t) = Z_{\text{locked}} + r\, w\, (T_{\text{end}} - t).$$

Both terms are state on QNS Staking. See Loaded NFT Pool.

Direct Loan

The standard Forge loan type — deposit ZAP, borrow QOM at variable interest, liquidatable if collateral drops too far. See Direct Loan.

Discount factor ($\delta$)

Loaded NFT Pool: the safety-margin haircut applied to collateral PV when computing borrow capacity, $\mathrm{maxBorrow} = \delta\, V_Z\, \bar p$. Launch target $\delta \approx 0.40$.

EIP-712

An Ethereum standard for signing structured data off-chain. Pawn uses EIP-712 for off-chain loan-offer signatures so listings cost zero gas to publish; only the on-chain match (acceptOffer) consumes gas.

Grace period

The window between a position's health factor crossing below 1 and the position becoming liquidatable. Forge uses 24 hours. Smooths flash-crash false positives and gives borrowers time to top up.

Health Factor (HF)

The single number every Direct-Loan borrower needs to know:

$$\mathrm{HF}(p) = \frac{C \cdot p \cdot L_{\mathrm{LT}}}{D}, \qquad \mathrm{HF} \ge 1 \to \text{safe},\ \mathrm{HF} < 1 \to \text{liquidatable (after grace)}.$$

The relative ZAP drawdown to liquidation, starting from origination LTV $L_0$, is the closed form $\Delta p_{\text{liq}} = 1 - L_0 / L_{\mathrm{LT}}$.

Interest rate model (IRM)

The function $R_b(U)$ mapping pool utilization to borrow APR. Forge uses a two-piece-linear kinked curve, identical in shape to Aave v3 / Compound v3 — see Rate Card for the calibration tiers.

Kink ($U^\*$)

The utilization at which the borrow-rate slope changes from $s_1$ (gentle) to $s_2$ (steep). Forge base $U^\* = 80\%$. Aave v3 USDC $U^\* = 80\%$; Compound v3 USDC $U^\* \approx 93\%$.

Lender APY (closed form)

$$R_l(U) = R_b(U) \cdot U \cdot (1 - \phi).$$

The factor of $U$ is because lenders earn only on the lent fraction of the pool; the $(1-\phi)$ is the share net of the reserve factor.

Lien

A claim on a staked position that prevents the borrower from unstaking or transferring it until cleared. QNS Staking exposes setLien / clearLien hooks; Forge's Bootstrap Loan and the Loaded NFT Pool both use liens to keep their collateral working (earning ZAP) while the loan is outstanding. The .qom itself sits in the staking contract's escrow during stake — the lien is the lending pool's claim on that escrowed position.

Loaded .qom

A .qom domain that is actively staked in QNS Staking, with ZAP rewards accruing or already locked on the position. "Loaded" because the NFT carries real, on-chain economic value beyond its name — the future emission stream. Used as collateral by the Loaded NFT Pool.

Liquidation

The process of repaying an underwater borrower's debt and seizing their collateral at a discount. Forge's liquidation is permissionless — anyone can call liquidate() and earn the liquidation bonus. See Liquidations.

Liquidation bonus ($b$)

The discount a liquidator receives when buying out a defaulted borrower's collateral, $\text{seized} = \Delta D \cdot (1 + b)$. Forge: $b = 12\%$ total, split 8 pp to liquidator and 4 pp to protocol reserve. The Morpho LIF formula $\mathrm{LIF} = \min(1.15,\, 1/(0.3\,L_{\mathrm{LT}} + 0.7))$ would set the cap at ≈17.6% for our $L_{\mathrm{LT}} = 50\%$; we sit below that.

Liquidation threshold ($L_{\mathrm{LT}}$)

The collateral-coverage percentage at which liquidation becomes possible. Set above the LTV to give borrowers a safety buffer between "no longer borrowable at the max" and "liquidatable." Forge: 50% (10pp above the 40% LTV).

LP (Liquidity Provider) tokens

ERC-20 tokens issued by an AMM (like QomX) representing a share of a liquidity pool. Burning LP tokens sends them to a dead address — the underlying liquidity stays in the pool but can never be withdrawn by anyone. The ZAP/QOM LP on QomX is burned, which is what makes the Forge TWAP rug-proof at the venue level.

LTV (Loan-To-Value, $L_0$)

The maximum borrow as a percentage of collateral value. Forge: 40% — e.g. ZAP collateral worth 100 QOM (at the ZAP/QOM TWAP) can borrow up to 40 QOM. Pricing is QOM-relative throughout — there is no QOM/USD oracle.

Origination fee

A one-time fee deducted from the loan principal at funding. Forge: 1.5%. Most pure variable-rate pools (Aave, Compound, Morpho, Euler, Fluid) charge zero origination — we charge to seed the reserve and align borrower-side costs with the protocol's risk-management overhead.

Pawn

The peer-to-peer NFT lending product. Live. See Pawn.

Pool

The shared liquidity in Forge — QOM that lenders deposit and borrowers draw against. Both Direct and Bootstrap loans draw from the same pool.

QNS (QOM Name Service)

The .qom domain registry on QOM L1. Domains are ERC-721 NFTs minted via the QNS controller.

QNS Staking

The QNS-domain staking module. Stakers lock their .qom, earn ZAP emissions on a deterministic schedule based on their lock multiplier, and can have liens set on their position by an approved lien contract (the Forge lending pool, in our case).

Forge

The pool-based lending protocol. Documented as designed; in pre-launch. See Forge.

Pawn

The peer-to-peer NFT-collateralized lending protocol. Live. See Pawn.

Counter-offer (Pawn)

A response to a borrower's listing or a lender's offer that proposes alternate principal / APR / duration. Both signing and counter-signing are off-chain (gas-free); only the final accept costs gas.

Collection-wide offer (Pawn)

A lender offer not tied to a specific token. Any holder of any token in the same NFT collection can accept it. Useful for bidding on floor-grade pieces in a series without targeting a specific tokenId.

Origination fee (Pawn)

A small protocol fee deducted from a Pawn loan's principal at funding. Live value is admin-tunable; the contract bytecode caps it at 2% so admin cannot exceed that without a public on-chain upgrade. Per-loan snapshot: changing the parameter never retro-applies to in-flight loans.

Interest fee (Pawn)

A small slice of the lender's interest, taken at repay and routed to the protocol treasury. Live value is admin-tunable; the bytecode cap is 10%. Per-loan snapshot: changing the parameter never retro-applies to in-flight loans.

Grace period (Pawn)

The window after a Pawn loan's maturity during which the borrower can still repay before the lender can claim collateral. Default 48 hours, capped at 7 days in the contract. Computed as startTime + duration + gracePeriod.

Liquidate (Pawn)

In Pawn, "liquidate" means the lender (or anyone, on the lender's behalf) calls liquidate(loanId) after the grace window elapses, transferring the escrowed NFT to the lender. There is no auction step — Pawn defaults are clean transfers, not bid wars.

qUSDT, qUSDC, qDAI

Bridged stablecoins on QOM. Not used as Forge collateral at launch — pool depth on QOM-chain stable markets is too thin for safe oracle pricing in the launch phase.

Reserve / reserve factor ($\phi$)

The protocol reserve absorbs bad debt liquidators cannot recover, so lenders are not exposed to it. Funded by the reserve factor — the share of borrow interest routed to the protocol instead of to lenders. Forge: 25%. Compare: Aave v3 USDC reserve factor 10%, volatile-tier 25–35%.

Slope ($s_1$, $s_2$)

The rates of change of the borrow APR with utilization, below and above the kink respectively. Forge base: $s_1 = 8\%$, $s_2 = 60\%$. Aave v3 USDC: $s_1 = 4\%$, $s_2 = 75\%$.

Slippage

The difference between the expected swap output and the actual swap output, due to the swap itself moving the pool's price along its constant-product curve. Measured in basis points (bps).

Survival distance ($\Delta p_{\text{liq}}$)

The relative ZAP drawdown a Direct-Loan borrower can absorb before liquidation triggers, $\Delta p_{\text{liq}} = 1 - L_0 / L_{\mathrm{LT}}$. At max LTV (40%) and $L_{\mathrm{LT}} = 50\%$, $\Delta p_{\text{liq}} = 20\%$.

TWAP (Time-Weighted Average Price)

A price computed by averaging spot prices over a window. Resists single-block manipulation: pushing a 30-minute TWAP requires sustained dollar-volume on the underlying market over the full window. Forge uses a 30-minute TWAP over the QomX ZAP/QOM market. The fact that the underlying market's LP is burned eliminates the LP-removal class of oracle attacks entirely.

UUPS proxy

A smart-contract upgrade pattern (EIP-1822). The contract deploys at one address (the proxy), with logic stored in a separate implementation contract. The proxy delegates calls to the implementation; the implementation address can be updated by the contract's admin (subject to internal access control). Forge and Pawn both use UUPS.

Utilization ($U$)

The percentage of pool QOM currently lent out: $U = B / D$. The borrow APR rises with utilization along the kinked curve.

Variable rate curve

The function that maps utilization to borrow APR. Forge uses a two-piece-linear kinked curve: gentle slope from 0% to $U^\* = 80\%$, then a steep slope above. See Rate Card.

Velocity cap ($v$)

Per-block notional limit on aggregate liquidation activity, $\sum_k \Delta D_k \le v \cdot D_{\text{pool}}$. Forge: $v = 5\%$.

WQOM (Wrapped QOM)

ERC-20 wrapper of native QOM. Required for any contract that needs to handle QOM as a token (because native QOM, like ETH, cannot be transferFrom'd). 1 WQOM = 1 QOM, no slippage on wrap/unwrap.

ZAP

QOM's ecosystem token. Fixed supply ERC-20. The collateral asset for Forge at launch.