IQSM | Glossary |

GLOSSARY

IQSM

Website Specific Acronyms

AiON
Agentic Intelligence On

AiQX
Intelligent Quantitative Exchange

BMU
Base Money Unit

CAGR
Compound Annual Growth Rate

CBDC
Central Bank Digital Currency

CeBM

Central Bank Money

CFMM
Constant Function Market Maker

DeFi
Decentralized Finance

DvP
Delivery v Payment

DX
Decentralized Exchange

FTS
Fixed Total Supply

GCU
Global Currency Unit

GOMO
Global Open Market Operations

GSC
Global Stable Coin

HFTS
High Frequency Tokenization System

IO
Interest Only

IQSM
Intelligent Quantitative System Management

iTAS
Intelligent Trade Automation System

L1VM
Layer 1 Virtual Machine

LCR
Liquidity Coverage Ratio

LLM
Large Language Model

LPV
Loan to Property Value

LRV
Loan to Reserve Value

ML
Module Lattice Based

MoE
Medium of Exchange

NIST
National Institute of Standards and Technology

NSFR
Net Stable Funding Ratio

P&I
Principal and Interest Loan

PO
Principal Only Repayment Loan

POL
Proof-of-Liabilities

POR
Proof-of-Reserves

PQC
Post Quantum Cryptography

PVM
Price Validation Model

QX
Quantitative Exchange

RWA
Real World Assets

SoV
Store of Value

SSiD
Self-Sovereign ID

SWF
Sovereign Wealth Fund

TradFi
Traditional Finance

TRI
Total Return Index

TVL
Total Value Locked

UCIS
Underlying Collateral Investment System

UDiD
Universal Digital Identity

UoA
Unit of Account

UUiD
Unique Universal Identity

VM
Virtual Machine

iVM
Intelligent Virtual Mortgage

zkVM
Zero-Knowledge Virtual Machine

GENERAL TERMS

Agentic Accounts:

Unlike traditional AI models that simply respond to prompts, or execute predefined tasks, agentic AI can make decisions, plan actions, and learn from its experiences all in pursuit of goals & objectives that have been self-directed, and set by its account holders. Agentic AI represents a potent new AI paradigm - that goes beyond, traditional AI - by incorporating a new "chaining" capability. It breaks down complex tasks into simpler, software defined and regulated steps & autonomously generates a new series of goals & unrivalled new account services, on-demand.

Agentic Intelligence:

The application of agentic intelligence, in financial services - is game-changing - and industry transformative. Agentic account based systems, continuously, analyse local and global reserve line data and provide dynamic real-time forecasting - adopting client and ecosystem market changes and needs - in real-time.

By autonomously monitoring transactions and detecting errors dynamic agentic systems predict and prevent - both credit and payment fraud better than traditional methods by re-assessing & risk adjusting continuously - to make profiling more accurate.

In investment banking and asset management it autonomously manages reserve supply and account holdings - matching and executing trades - based on real-time analysis and pre-defined refinancing strategies. By continuously monitoring both - client and whole of ecosystem network operations in real-time, it can lock-down compliance, with financial regulations, automatically.

Anchor currency:

An important measure for an international currency is as a unit of account - and an important measure on this dimension, is its use as an “anchor currency” against which other countries attempt to limit their exchange rate movements. As an anchor currency the USD accounts for more than 50 per cent of world gross domestic product (GDP), while the share of world GDP that is anchored to the euro, is roughly 5 percent - (not counting the euro area itself).

Asset Tokenization:

Asset tokenization is transforming the rights to any asset - into a digital token on a blockchain. It represents a new paradigm shift in how assets can be unconditionally secured, managed, traded, & invested - far beyond the capabilities of traditional frameworks.

The development of this technology shines a light on a new era of intelligent finance - that will revolutionise, asset management.

This shift is made possible through blockchain technology, which provides a secure, transparent, and efficient platform - for digital tokens. Unlike traditional local asset management protocols that involve manual paperwork, slower transaction times, and limited access, tokenization streamlines these processes by leveraging the inherent immutability advantages of blockchain technology. It ensures security, immutability - and transparency of transactions.

Governments and financial institutions worldwide are embracing tokenization. They recognize it's potential to enhance liquidity, reduce costs of ownership, and to expand accessibility to assets that were once the domain of only a select few due to high costs - and industry sponsored barriers. This democratization of asset ownership is one of the most compelling aspects of tokenization.

Attestations:

Claims backed up by cryptographic digital signatures that vouch for the - authenticity, validity, and provenance of information. To gain trust attesters often put something at stake - such as funds.

Authentication:

Using non-interactive digital signatures, to math-proof trust chain authenticity, validity or identity of information and its sources. It is the foundational basis of trustless computation and cryptography.

Base Money Units:

IQSM SmartCore™ global multi-line reserve base money units are 1:1 foundation reserve bonded and aligned to 10/100 GCU funding service lines in perpetuity - and activate monthly - on a 1:1 BMU-GCU basis in each new - consecutive - funding cycle.

Fixed total supply BMUs release at a global - fixed total supply rate of 6,666,666 units at a £ par equivalence release value of £667mn pm - over a 60 month period from 1 Jan 2024 directly backed by PO loan - regulated and synchronised, repayments.

Blockchain networks:

Networks built on the technology of blockchains that combine the societal benefits of the earliest internet protocol networks (open access, democratic governance, user ownership rights) with the sustainable competitive use advantages - of corporate networks.

Clients:

Software defined applications, that enable people to access and participate in underlying account service protocols and networks.

Composability:

A property describing software in which library components can be reassembled into larger, more complex service compositions. Because components can be remixed and reused a component only ever has to be developed once. Composabile client service contracts underwrite - exponential - growth similar to compound interest, in general finance, and Moore’s law for semiconductors.

Constant Function Market Maker:

Constant function market makers (CFMM) are a paradigm in the design of traditional asset/liquidity pool intermediated exchange trading protocols (ETP). A trading function and a set of rulesets determine how liquidity takers (LTs) and liquidity providers (LPs)

interact and how markets are cleared. IQSM™ embedded ETP and UCIS service protocols render all traditional state-of-the-art exchange trading systems, and all distributed and decentralised swap-line, ETF, ETP, UCIS & CFMM systems, flawed by design.

Continuum:

An ecosystem continuum is - a math-proofed & regulated system of systems that keeps on changing and optimising steadily - over continuous fixed and certain, ongoing time cycles - on a whole of ecosystem basis. It is made up of common form factor parts that serve to autonomously - create and secure, a new math-proofed & regulated range of values in perpetuity, enabling the system to treat, systemically fluid properties and values - as point functions.

Cryptocurrency:

One use of blockchain-like networks. Many industry practitioners prefer the term “tokens” because it more aptly communicates the abstract, generalisable nature of the technology.

Cryptography:

The science of secure communication. Blockchain networks are termed - “crypto” - because they use cryptographic key pairs to enable authentication and attestations through digital signatures.

DAO:

An acronym for "decentralised autonomous organisation" a self-governing blockchain-based community that uses self-executing code, token voting, or some other programmatic mechanism, for coordination. Many DAOs control treasuries the financial core of any blockchain network which can be used to fund development and network growth.

Decentralization:

When a network is community-owned and operated as opposed to being controlled by - central - gatekeepers and intermediaries.

DeFi:

Short for “decentralised finance” a category of blockchain-based financial applications, and financial market infrastructure - that is designed to replace "trad" financial intermediaries, with software.

Disruptive vs sustaining technology:

A theory that distinguishes between the technology that creates entirely new markets or significantly reshapes existing ones - so much so that it eventually displaces incumbents (disruptive) and technology - that improves the performance of existing products along dimensions - people already know, and value (sustaining).

Encapsulation:

A computer programming technique that creates - client-defined interfaces for units of code and other systems, thereby reducing complexity. The client does not have to understand, the internal operations of the underlying virtual machine and/or it's software to interact with their agentic account. Encapsulation makes it so much simpler to use pre-coded components - as building blocks.

Equilibrium by Design:

The field of mechanism design goes back more than 60 years, and but its tools have been especially useful in auction theory, market design, social choice theory ,and now in - blockchains, crypto & web3. As opposed to game theory which establishes the dimensions of a strategic interaction and then explores the most behaviorally plausible outcomes - the field of mechanism design begins not with the game but a desired outcome and it aims to reverse-engineer, a game - of some form - so that this desired outcome is an equilibrium.

Equity REITs: (E-REIT)

IQSM SmartCore™ - E-REITs are equity-based and own, hold and manage - income-producing real estate assets. Revenues are generated primarily through rent, revaluation and refinance not by reselling properties. All ongoing - REIT operating costs, liquidity risks and credit risks are radically reduced using initial finance and ongoing refinance with fixed 40 yr term, fixed zero interest rate, fixed principal only loans and unrivalled new loan reset generated - reserve asset - lines and cash release rights.

Equity REITs. Most REITs are equity-based and own, hold and manage - income-producing real estate assets. Revenues are generated primarily through rent, revaluation and refinance not by reselling properties, and ongoing operational costs, liquidity and credit risks are dramatically reduced via initial finance and refinancing with fixed 40 yr term - fixed zero interest rate, fixed principal only mandates and - revolving warehouse credit lines.

ETPs v ETFs:

People commonly - albeit mistakenly - refer to the new - ETH and BTC market products as ETFs or exchange traded funds, a better known example of an ETP - that usually holds certain collections of securities such as stocks and bonds. But there’s a big difference between the two. While ETFs are designated for “investment companies” - as defined by the US Investment Company Act of 1940, the broader category of ETPs are used for issuers, that are NOT - considered “investment companies” and therefore are subject to fewer, burdensome regulations. It doesnt help that some approved issuers strategically apply the better-known “ETF” label, despite actually offering - only ETPs.

The distinction sounds pedantic, but it is crucial. By approving these new issues as ETPs, the U.S. Securities and Exchange Commission (SEC) reaffirms that they are not a security, and transactions in BTC & ETH alone do not amount to securities transactions. If they were a security then the SEC would have required shares to be issued using SEC Form N-1A indicating securities portfolios. Instead, the shares were issued using SEC Form S-1 indicating non-securities portfolios.) This then provides a distinct roadmap as prospective ETP issuers seek approval for new market making blockchain network products.

Global Currency Units:

IQSM SmartCore™ global currency units (GCUs) are a simple multi-line reserve referenced, funding control representation of a global base money system with the capability to function in a local (BMU) or stateless (GCU) self-sovereign mode - indexed to exchange service units empowering unrivalled social impact benefits and economic empowerment for all ecosystem clients.

The global fixed total supply of 399,999,960 tokenised - global currency units, was GS-1 base-line instantiated on 1 Jan 2024

and activate at a rate of 39,999,996 GS-1 units pa over a 10 yr period, from 1 Jan 2024. Local base money indexed exchange services and pass-through protocols activate, from 1 Jan 2025.

Hash:

A unique fixed-length cryptographic code - or digitalised identifier representing a piece of data. Hashes are essential to all modern cryptography and blockchain networks which use them to ensure digital security and data integrity.

Howey test (referenced to SEC Digital Assets Review Advice):

A three-pronged legal assessment for deciding what constitutes an “investment contract”, otherwise known as a security. Based on a 1946 U.S. Supreme Court case, the Howey test looks at whether an offer or sale of assets involves - (1) an investment of money (2) within a common enterprise and (3) with a reasonable expectation of profit to be derived from the efforts of others. All three characteristics must be met for the offer to be considered a security. In addition to Howey, "Reves" may be used to examine and test clarify whether a note is classified - as a security or not.

Interoperability:

By injecting interoperability into all our digital interactiions open protocols can help to unravel the advantages that big-tech and traditional financial service institutions have stablished over recent decades and force them to compete on an equal footing.

Internet protocol:

An open protocol that defines how to format, address, and route packets of data/information between machines on the internet. Internet protocol, or IP, comprises the networking layer of the internet tech stack, which sits above the physical device layer.

Key pairs:

Two strings of data - represented by a public key and private key that are central to all - modern day cryptographic applications. A mathematical relationship ties together each key pair such that it is easy to derive the public key from the private key - but it takes vast amounts of computing power to derive the private key from the public key. Key pairs are the basis for digital signatures - and authentication, and they are foundational to blockchain networks.

L1VM:

L1VM™ is an independent Layer 1 blockchain platform designed for purpose and focused on, real-time audit based asset security, generation, recording & continuum instantiation. Math-regulated high-frequency quantitative exchange performance secures end-to-end atomic service protocols and secured funding capabilities at hyper-scaled transaction execution levels for defined domains.

Layer Two or L2:

A second-layer network designed to improve the performance of legacy era designed - blockchain networks. The object is to shift all heavier computation - "off-chain" - to traditional computers to process and then send all results back to the originating network so that it can then verify - their correctness. Important for scaling.

Mining:

Performing energy-intensive computational work in exchange for token rewards to secure a blockchain network. Mining no longer applies to high performance L1 blockchain networks that employ more modern systems such as trustless non-interactive proofing.

Network:

At its most basic level, a list of connections - between people or things. The structure of a network determines outcomes on the internet, including how power and money flow. There are three basic types of internet networks: protocol networks, corporate networks, and blockchain networks.

Network effects:

An economic phenomenon where the value of a network grows with the addition of each new node. Where corporations accrue power through economies of scale, the internet accrues power through network effects. Metcalfe’s law and Reed’s law are two popular mathematical formulations of the idea.

Network governance:

Whereas corporate networks are strictly managed, from the top down by a central planner protocol and blockchain networks are designed to be democratic, and controlled - by underlying users.

Nodes:

Points of connection across a network. They can be telephones, transportation systems or connection-oriented technologies like computers or even people as in a social network. Generally, the more nodes, the more valuable the network.

“Off-chain” vs. “on-chain”:

A distinction denoting whether a given activity takes place on a blockchain network or not. Blockchain governance can run either “off-chain”, meaning a coalition of community members steers it in a manner similar to protocol networks, or “on-chain”, meaning through mechanisms such as token voting, self-executing code, or a combination.

Open source:

Software that can be freely accessed, modified, distributed, and remixed by anyone. Started out in the 1980s - in response to the development of proprietary software by companies like Microsoft. Most code running today is now open source.

Permissionless:

An open system iwher anyone can participate freely. Conversely, centralised gatekeepers, use permission - in business to extract rents, thwart competition, and consolidate market power.

Protocol:

Technical standards for software that enable computers to communicate with one another. Think of protocols as analogous to natural languages,which enable people to communicate.

Protocol coup:

When the strongest nodes in a protocol network overtake it and effectively transform it into a corporate network. The threat of protocol coups is a structural weakness of federated networks.

Read era:

The first phase - of the commercial internet - circa 1990–2005. During this period early protocol networks democratised access to information through tools such as the web browser, enabling anyone to read about almost any topic through websites. While people could send email, most information flowed one way: from website to user.

Real Estate Derivatives:

Real estate "derivatives" - are sometimes referred to as property derivatives and are financial instruments that - allow investors to gain an exposure to the real estate asset class without having to actually own buildings. They replace the real property asset with the performance of a real estate - total return - index. In this way investors invest in real estate equity or debt without ever buying an actual real estate asset or using real estate as loan collateral.

SEC Digital Assets Review Advice:

SEC framework provided for Investment Contract analaysis of Digital Assets

Sinks:

Conduits for token outflow and tools for keeping prices balanced in a virtual economy. When sinks are too strong they can lead to undersupply, intensified demand and upward price pressure and when they are too weak they can have the opposite effects. One of the best known and simplistic legacy era sink designs was the “access” sink - which charged fees for network access, or usage, aligning tokenized asset prices - with network demand and utility.

Stablecoins:

A legacy era of tokens, purported to maintain, a true stable price usually "pegged" to single currency reserve assets - like the U.S. dollar or regulated algorithmically by automated market-making processes.

State machine:

The concept traces back to a 1936 paper by the British computer scientist Alan Turing who defined such machines as consisting of two parts: a place to store information (memory) and a means to modify that information (a processor).

State transition:

The essence of computation. A state transition is what happens when a machine modifies its internal state or memory, according to the logic of a processor. Blockchains are virtual machines that undergo state transitions - according to a regulatory mechanism. (See L1VM.com)

Tokenomics:

Short for “token economics” - an emergent field concerning the design of incentive systems for virtual economies particularly as in blockchain networks. Efficient systems balance market supply and demand such as faucets and sinks - to maintain equilibrium.

Tokens:

Units of ownership within blockchain networks. Often thought of as digital assets or currencies, but more accurately defined as data structures that can track - quantities, permissions, and metadata for users. Tokens can be fungible or non-fungible.

Total Return Index:

A total return index is an index that measures - the overall return of a defined basket of investment bonded units by assuming that all forms of unit distributable returns are reinvested in addition to tracking the price movements of the underlying units and all new unit bonded asset lines created, within a single investment cycle.

Trustlessly Outsourced Computation:

The state of a system in which there’s no need for a higher authority, such as an intermediary or a central entity to oversee transactions. Instead trustless systems like blockchain networks, can securely verify the validity of transactions all by themselves using cryptography and consensus mechanisms. In a trustless system, no single network node has the power to alter the rules.

Validators:

Computers that maintain the security of a blockchain network by verifying the validity - of proposed transactions. Validators reach agreement on state transitions according to the rules prescribed by their consensus mechanisms. Legacy era blockchains employ tokenomic incentivization - to ensure validators behave honestly.

Verifiable Computation:

Verifiable computing is a zkVM based methodology for trustless outsourced computation a - non-interactive - proofing protocol to ensure that programs run correctly.

Wallets:

Software based cryptographic key pairs that enable blockchain network interactions, such as holding and controlling tokens. In blockchain networks, wallets play a similar role to the role that web browsers play for web users.

Web 2.0:

Another name for the second phase of the commercial internet, circa 2006–2020. Also known as the read write era.

Web3.0:

Another name for the third phase of the commercial internet, circa present day. Powered by blockchain networks and also known as the read write own era.

Zero Knowledge (ZK) proofs:

ZK cryptographic techniques that can prove a claim is true while revealing, no other information - other than that the claim is true.

zKVM:

zKVM360 protocols compress and control access to information which has useful applications for blockchain network - scalability, privacy and regulatory compliance.

LAST UPDATED 1 October 2024