# Glossary

## A

**APY (Annual Percentage Yield)**\
The annualized rate of return on an investment, including the effect of compounding. Stasis targets 5-6% APY.

**Arbitrage**\
The practice of taking advantage of price differences between markets or instruments to generate profit with minimal risk.

**Auto-Compounding**\
The automatic reinvestment of earned yield back into the principal, allowing returns to compound over time without manual intervention.

## B

**Basis**\
The price difference between a futures contract and the underlying spot asset. Basis trading involves profiting from this difference.

**Blockchain**\
A distributed ledger technology that maintains a continuously growing list of records, called blocks, which are linked and secured using cryptography.

## C

**Collateral**\
Assets pledged as security for a loan or to cover potential losses. In Stasis, USDC serves as collateral for perpetual futures positions.

**Correlation**\
A statistical measure of how two assets move in relation to each other. Delta-neutral strategies aim for low correlation with market movements.

## D

**Delta**\
A measure of how much an asset's price changes in response to a $1 change in the underlying asset's price. Delta-neutral means zero net exposure to price movements.

**Delta-Neutral**\
An investment strategy that aims to eliminate directional market risk by maintaining a portfolio delta of zero through offsetting long and short positions.

**DeFi (Decentralized Finance)**\
Financial services built on blockchain technology that operate without traditional intermediaries like banks.

## E

**ERC-20**\
A technical standard for tokens on the Ethereum blockchain. rSTS is an ERC-20 token, making it compatible with wallets and DeFi protocols.

**Exchange Rate**\
The rate at which rSTS tokens can be converted to USDC. This rate increases over time as the vault generates yield.

## F

**Funding Rate**\
Periodic payments between long and short positions in perpetual futures contracts, designed to keep futures prices close to spot prices.

**Funding Rate Arbitrage**\
A strategy that involves collecting funding rate payments while maintaining market neutrality, which is Stasis's primary yield generation method.

**Futures Contract**\
A financial derivative that obligates parties to buy or sell an asset at a predetermined future date and price.

## G

**Gas Fees**\
Transaction fees paid to blockchain miners or validators for processing transactions. On Avalanche, these are typically very low.

**Gamma**\
The rate of change of delta with respect to changes in the underlying asset's price. High gamma means delta changes rapidly.

## H

**Hedge**\
An investment position intended to offset potential losses or gains in another position. Stasis uses short perpetual futures to hedge spot exposure.

**Hyperliquid**\
A decentralized exchange specializing in perpetual futures trading, where Stasis executes its delta-neutral strategy.

## I

**Impermanent Loss**\
A temporary loss of funds experienced by liquidity providers due to volatility in a trading pair. Delta-neutral strategies aim to avoid this risk.

## L

**Leverage**\
The use of borrowed capital to increase the potential return of an investment. Perpetual futures allow leveraged exposure to price movements.

**Liquidity**\
The ease with which an asset can be bought or sold without affecting its price. Stasis maintains liquidity buffers for user withdrawals.

**Long Position**\
A position that profits when the underlying asset's price increases. In traditional investing, buying and holding an asset.

## M

**Margin**\
The collateral required to open a leveraged position. Stasis maintains margin on Hyperliquid for its perpetual futures positions.

**Mark Price**\
The fair value price of a perpetual futures contract, calculated by exchanges to prevent manipulation and determine funding rates.

**Market Neutral**\
An investment strategy that seeks to profit regardless of market direction by maintaining equal long and short exposures.

## P

**Perpetual Futures (Perps)**\
Derivative contracts that track the price of an underlying asset without an expiration date, unlike traditional futures contracts.

**Portfolio Delta**\
The aggregate delta of all positions in a portfolio, representing the portfolio's sensitivity to underlying asset price movements.

## R

**Rebalancing**\
The process of adjusting portfolio positions to maintain target allocations or risk parameters, such as delta neutrality.

**rSTS (Rebasing Stasis Token)**\
The yield-bearing token representing shares in the Stasis vault. Its value automatically increases as the vault generates yield.

## S

**Sharpe Ratio**\
A measure of risk-adjusted return, calculated as (return - risk-free rate) / volatility. Higher Sharpe ratios indicate better risk-adjusted performance.

**Short Position**\
A position that profits when the underlying asset's price decreases. Involves selling an asset you don't own with the intention to buy it back later at a lower price.

**Slippage**\
The difference between the expected price of a trade and the actual executed price, often due to market volatility or large order sizes.

**Smart Contract**\
Self-executing contracts with terms directly written into code, running on blockchain networks without intermediaries.

**Spot Price**\
The current market price of an asset for immediate delivery, as opposed to futures prices for future delivery.

## T

**TVL (Total Value Locked)**\
The total amount of assets deposited in a DeFi protocol. For Stasis, this represents the total USDC deposited in the vault.

**TWAP (Time-Weighted Average Price)**\
The average price of an asset over a specific time period, often used in funding rate calculations to prevent manipulation.

## U

**USDC (USD Coin)**\
A stablecoin pegged to the US Dollar, used as the base currency for deposits and withdrawals in Stasis.

## V

**Vault**\
A smart contract that pools user funds and executes investment strategies. The Stasis vault implements delta-neutral yield generation.

**Volatility**\
A measure of price fluctuation over time. Delta-neutral strategies aim to reduce portfolio volatility while maintaining yield generation.

## W

**Web3**\
The decentralized internet built on blockchain technology, enabling direct peer-to-peer interactions without intermediaries.

**Withdrawal**\
The process of redeeming rSTS tokens for USDC from the Stasis vault. Users can withdraw at any time based on the current exchange rate.

## Y

**Yield**\
The income generated by an investment, typically expressed as a percentage of the principal amount. Stasis generates yield through funding rate arbitrage.

**Yield Farming**\
The practice of earning rewards by providing liquidity or participating in DeFi protocols. Stasis offers a delta-neutral approach to yield farming.

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_This glossary covers the key terms used throughout the Stasis documentation. For additional clarification on any terms, please refer to the relevant sections or contact our support team._
