Glossary

Definitions of key terms used throughout the appeX documentation. Terms are listed alphabetically.

Accrual-Based Yield A method of recognizing yield incrementally over the life of an advance rather than as a lump sum when cash is received. For a $100 advance with a $10 fee over 30 days, approximately $0.33 accrues daily. This prevents late-entering LPs from capturing yield they did not earn.

Advance A capital draw by an approved borrower from the vault. Each advance carries a principal amount, an LP yield fee, a protocol fee, and an expected repayment date. The LP yield fee accrues incrementally to vault NAV over the advance's term.

Approved Borrower A company that has passed appeX onboarding (credit evaluation, financial review, compliance verification) and is authorized to draw capital from the vault. The borrower is responsible for repayment regardless of downstream outcomes.

$APPEX The native utility token of the appeX Protocol. ERC-20 standard. Fixed supply of 1,000,000,000 tokens with no minting function. Used for payment backing, staking rewards, fee discounts (25% discount for borrowers), platform utility, and governance.

Daily Redemption Cap A policy limit on total LP token redemptions processed per day. Set as a fixed number of shares or a percentage of circulating LP token supply. Prevents a rush of withdrawals from depleting vault liquidity.

DeFi (Decentralized Finance) Financial services built on blockchain networks using smart contracts. Operates without traditional intermediaries like banks. appeX deploys idle vault capital to DeFi lending protocols (Aave, Compound) for baseline yield.

DEX (Decentralized Exchange) A peer-to-peer marketplace for trading tokens directly onchain without a centralized intermediary. Used by appeX for $APPEX purchases during payout distribution and protocol fee conversion to stakers.

Duration Multiplier A reward multiplier applied to staking positions based on lock duration. No Lock = 1.0x, 3 months = 2.0x, 6 months = 3.0x. Longer commitments earn a proportionally larger share of protocol fee distributions.

ERC-20 The standard token interface on EVM-compatible chains. $APPEX and LP tokens follow this standard, making them transferable and compatible with wallets, DEXes, and DeFi protocols.

Fee Curve The formula that determines the LP yield fee based on payment term duration. Fee scales linearly from 5% (Net-30) to 15% (Net-180). Terms between these bounds are calculated proportionally.

FIFO (First-In, First-Out) The queuing method used for processing redemption requests. Earliest requests are processed first.

Grace Period A buffer period (5 days) after an advance's expected repayment date before it is marked as impaired. Yield accrual stops during the grace period. NAV holds flat. Previously accrued value is preserved but does not grow.

Governance The process by which $APPEX stakers vote on protocol decisions including vault parameters, borrower approvals, fee structures, new vault creation, and DeFi protocol selection for capital deployment. Each staked token carries one vote.

Impairment A reduction in vault NAV resulting from a borrower default. The impaired amount is written down and the loss is socialized across LP shares proportionally. The borrower loses vault access permanently.

Liquidity Provider (LP) An individual or entity that deposits USDC into the vault to earn yield from borrower fees. LPs receive LP tokens representing their proportional ownership of vault NAV. LPs can optionally stake $APPEX for additional protocol fee distributions.

LP Token A transferable ERC-20 token minted when USDC is deposited into a vault. Represents proportional ownership of vault NAV. Appreciates in value as borrower fees accrue. Can be held for base yield, locked into the staking contract for additional rewards, or traded on secondary markets.

NAV (Net Asset Value) The total value of assets held by a vault: DeFi-deployed USDC + lent USDC + accrued fees - bad debt reserves. NAV determines LP token price and is updated continuously (not through daily snapshots).

Off-Ramp A service that converts cryptocurrency (USDC) to fiat currency and deposits it into a traditional bank account. Used for recipients who prefer fiat payouts. Typically settles in 1-3 business days.

Payment Terms The duration (in days) between capital deployment and expected repayment. Typically Net-30 to Net-180. Longer terms carry higher LP yield fees. Also referred to as "Net-X" where X is the number of days.

Protocol Fee An additional fee charged to borrowers on top of the LP yield fee. Negotiated individually per borrower during onboarding. Split 50/50 between appeX Treasury and $APPEX stakers. Payable in USDC or $APPEX (at 25% discount).

Receivable An obligation owed to a borrower by their customer for delivered goods or services. Receivables serve as the economic basis for vault advances. The vault's exposure is to the borrower, not individual receivables.

Redemption The process of withdrawing USDC from a vault by burning LP tokens at the current share price. Processed through three gates: daily cap, available liquidity check, and per-request limit.

Share Price The current value of one LP token, calculated as NAV / Total Shares Outstanding. Increases as borrower fees accrue to vault NAV. Deposits and withdrawals do not affect share price.

Smart Contract Self-executing code deployed on a blockchain that automatically enforces the terms of an agreement. appeX vaults, staking, fee distribution, and token contracts are all smart contracts deployed onchain.

Staking The process of locking LP tokens and $APPEX into the staking contract to earn protocol fee distributions. Rewards are proportional to the amount staked and the lock duration multiplier chosen. Only LPs can stake.

Staking Cap The maximum amount of $APPEX eligible for staking rewards, determined by LP tokens locked multiplied by the vault multiplier. The total cap is the sum across all vaults. Prevents non-LPs from gaming the reward system.

TGE (Token Generation Event) The initial creation and distribution of $APPEX tokens. 275,000,000 tokens (27.5% of supply) are circulating at TGE.

USDC A stablecoin pegged 1:1 to the US dollar. The deposit, lending, and settlement currency used by appeX vaults.

Utilization The percentage of vault capital currently deployed to active borrower advances. All remaining capital is deployed to DeFi lending protocols (Aave, Compound) for continuous yield. When utilization reaches levels where remaining DeFi-deployed capital would not comfortably support redemptions, new advances pause.

Vault An isolated smart contract that holds USDC deposits, manages NAV, and facilitates borrower draws and LP redemptions. Each vault has its own fee structure, risk profile, borrower pool, and staking multiplier. Capital does not flow between vaults.

Vault Multiplier A parameter that determines how much $APPEX can be staked per LP token in a given vault. Vault 1 multiplier: 2x. Future vault multipliers are set by governance and calibrated to each vault's risk profile.

Vesting A schedule that controls when allocated tokens become accessible. All vesting in appeX is linear after the cliff period. Prevents immediate selling by insiders and aligns incentives with long-term protocol success.