# Glossary
> Plain-language definitions of every term used across Ozmium - onchain basics, leverage, lending, liquidity provision, and the x402 machine payment protocol.
Source: https://docs.ozmium.org/company/glossary/
Keywords: defi glossary, onchain finance terms, liquidation price meaning, lltv health factor explained, x402 glossary, perpetual futures terms
Updated: 2026-07-27
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Short, practical definitions. Where a term has a precise meaning inside Ozmium, that is the meaning
given here.

## Onchain Basics

**Base** - An Ethereum layer-2 network, chain id 8453. The only network Ozmium operates on.

**ERC-20** - The token standard. OZ, USDC, and every other token in the app is an ERC-20.

**Approval** - Permission you grant a contract to spend a specific ERC-20 from your wallet. Required
once per token per spender. An unlimited approval is a standing permission until revoked.

**Calldata** - The encoded instruction inside a transaction: `{ to, data, value }`. Ozmium builds
calldata; your wallet signs and broadcasts it.

**Gas** - The fee paid in ETH to include a transaction. On Base this is small but never zero unless
someone else is sponsoring it.

**Non-custodial** - The operator cannot hold, move, or freeze your assets. Ozmium is non-custodial.

**[Basescan](https://basescan.org)** - The Base block explorer. The final authority on what a transaction actually did.

## Trading

**Spot swap** - Exchanging one token for another at the current price. No leverage, no liquidation.

**Slippage** - The difference between the quoted price and the filled price. Guarded by a maximum you
set; if the market moves past it, the transaction reverts instead of filling badly.

**Perpetual (perp)** - A leveraged long or short position with no expiry date. Ozmium routes
perpetuals to [Gains Network gTrade](https://gains.trade), using USDC as collateral.

**Margin / collateral** - The USDC you post to open a leveraged position. Position size equals margin
times leverage.

**Leverage** - The multiplier on your margin. 10x on $100 of margin controls $1,000 of exposure, and
a 10 percent adverse move wipes the margin.

**Liquidation** - The forced close of a position when its margin can no longer cover losses. Enforced
onchain by the protocol, not by Ozmium.

**Liquidation price** - The market price at which liquidation occurs. Shown before you sign.

**Mark price vs index price** - `mark` is what a position fills at on Gains. `index` is the oracle
spot price liquidations are measured against. The gap between them is real and tradeable.

**Funding / rollover fee** - The ongoing cost of holding a leveraged position. It accrues against
your margin over time.

**Take profit (TP) / stop loss (SL)** - Resting instructions to close a position at a target or a
maximum loss. Ozmium can modify these on an open position without closing it.

**Pending order** - A resting limit or stop order that has not filled. It holds collateral but is not
yet a position. Conflating the two is a common integration bug.

## Lending and Borrowing

**Vault** - A pooled lending market you supply assets to in exchange for yield. Ozmium lists Morpho
ERC-4626 vaults and [Aave v3](https://aave.com/docs) markets.

**APY / APR** - Annualised yield or rate. Both float with market conditions; a displayed rate is an
estimate at the moment you read it.

**LLTV** - Liquidation loan-to-value. The maximum ratio of debt to collateral before the position can
be liquidated.

**Health factor** - How far a borrow position is from liquidation. Above 1 is solvent; at or below 1
it can be liquidated.

**Floating rate** - A borrow rate that moves with utilization of the market.

**Fixed rate / fixed term** - A borrow rate locked at execution to a stated maturity. Ozmium surfaces
these through [Morpho Midnight](https://docs.morpho.org) books.

**Bad debt** - Debt left in a market after collateral proved insufficient to cover it. A real risk in
any lending protocol.

## Liquidity

**LP (liquidity provider)** - Someone who deposits both sides of a trading pair into a pool and
collects a share of swap fees.

**vAMM** - The [Aerodrome](https://aerodrome.finance) volatile-pair pool style used for OZ/USDC.

**Concentrated liquidity** - [Uniswap v3](https://app.uniswap.org)'s model, where liquidity is placed within a chosen price
range. Ozmium's Uniswap v3 OZ/WETH position is placed at **full range** by default.

**Full range** - Liquidity spanning all prices. It earns less per dollar than a tight range but never
goes out of range, which is the only safe default for a position nobody is watching.

**Impermanent loss** - The value difference between LPing a pair and simply holding both tokens. It
is real, and it grows with divergence between the two sides.

**Fee claim** - Collecting accrued swap fees. On Uniswap v3 removal with `liquidity: 0` claims fees
without closing the position.

## OZ and the Desk

**OZ** - The Ozmium token on Base, `0x148313dcdb7a7111ebefa4871f6a7fef34833b07`, 18 decimals, 100
billion maximum supply, burn-preferred.

**onz** - The unit name for OZ. One hundred Ozmium is written 100oz.

**Burn** - Sending OZ to the dead address, permanently removing it from supply. Burns are ranked
publicly onchain.

**Burn ladder** - The public onchain ranking of wallets by OZ burned.

**Prop desk** - A gated action surface for qualified OZ holders. Access is proven by a real onchain
OZ transfer or burn, not by a claim in a request body.

## Agent API

**x402** - An HTTP payment protocol. A server answers an unpaid request with HTTP 402 and a payment
challenge; the client signs a payment and retries. Ozmium uses x402 v2, `exact` scheme, on Base.

**EIP-3009** - `transferWithAuthorization`, the USDC signature standard x402 uses. It lets a client
authorize an exact transfer without a prior approval transaction.

**Payment is authentication** - There is no signup, no API key, and no key rotation. A valid payment
is the credential.

**MCP** - Model Context Protocol. Ozmium publishes an MCP-shaped tool manifest so agent frameworks
can discover its endpoints as tools.

**llms.txt** - A plain-Markdown index of a site written for language models rather than crawlers.
Ozmium publishes one for the app and one for these docs.