IQSM | Glossary |

GLOSSARY

Website Specific Acronyms

Agentic RAG
Agent Thought Generation, Action and Response

AiON360
AI On-Demand

AiQX360
Ai Quantitative Exchange

ASX360
Asia Pacific Localised Exchange Service Rights

BMU
Base Money Unit (MoA & UoA)

CAGR
Compound Annual Growth Rate

CBDC
Central Bank Digital Currency

CeBM

Central Bank Money

CFDX
Computational Finance Decentralized Exchange

CFMM
Constant Function Market Maker

DeFi
Decentralized Finance

DvP
Delivery v Payment

DX
Decentralized Exchange

EON360
Exchange Services On-Demand

eTAS
Exchange Trading Automation System

ETP
Exchange Trading Protocol

EUX360
EMEA Localised Exchange Service Rights

FTS
Fixed Total Supply

GCU
Global Currency Unit (SoV)

GOMO
Global Open Market Operations

GSC
Global Stable Coin

HFTS
High Frequency Trading System

IFSC
Intelligent Financial Service Contract

iTAS
Intelligent Transaction Automation System

IO
Interest Only Repayment Loan

IQSM
Intelligent Quantitative System Management

L1VM
Layer 1 Virtual Machine

LCR
Liquidity Coverage Ratio

LLM
Large Language Model

LPV
Loan to Property Value

MoE
Medium of Exchange

NSFR
Net Stable Funding Ratio

P&I
Principal and Interest Repayment Loan

PO
Principal Only Repayment Loan

RAG
Retrieval Augmented Generation

RWA
Real World Assets

S1360
Sign Once Globally

SoV
Store of Value

SSiD
Self-Sovereign ID

TradFi
Traditional Finance

TVL
Total Value Locked

UCIS
Underlying Collateral Investment System

UDiD
Universal Digital Identity

UoA
Unit of Account

USX360
The Americas Localised Exchange Service Rights

VM
Virtual Machine

zkVM
Zero-Knowledge Virtual Machine

Agentic RAG:

Agentic RAG takes retrieval augmented retrieval (RAG) further by enabling LLMs to think and iterate on their responses. a-RAG follows a structured trust-on-chain VM pass-through framework, generates an initial response and determines the next best step by searching for additional information and refining and defining the response/s, on an actionable UUID and whole-of-ecosystem basis.

AiON Tokenization:

In the field of predictive Ai - a token is a fundamental unit of data that is processed by algorithms - especially in natural language processing and machine learning services. Traditional Ai tokens generally represent a component of a data set characterised as words or characters. On a personalised "AiON" - audience basis level they are community optimised to represent unconditionally secured continuum UUIDs serving personalised LLM use cases.

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.

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, UCIS and CFMM - intermediation and collateral asset value risk processes flawed by design and uncompetitive.

Continuum:

An intelligent continuum is a math-proofed and 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.

Corporate networks:

Networks that companies own and control - which tend to have advanced features and more sustainable funding compared to the early internet-era protocol networks - but they are effectively centralised, controlled from the top down and their management can change the rules of the network, at any time, for any reason.

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.

Design:

The field of mechanism design goes back more than 60 years, but its tools and lessons have been especially useful in auction theory, market design, social choice theory, and now, 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. Mechanism design aims to reverse-engineer a game of some form so that this desired outcome is an equilibrium.

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 reserve account. Encapsulation makes it so much simpler to use pre-coded components - as building blocks.

Equilibrium by Design:

Federated network:

A variety of protocol network that doesn’t use - centralised - data centres (read "Cloud") to host people’s private data but relies on peer nodes to run their own software instances, called “servers”, to host network data.

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:

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 modern 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 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.

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.

Mechanism Design:

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.

Read write era:

The second phase of the commercial internet, circa 2006–2020. During this period corporate networks democratized publishing through tools such as posts on social networks, enabling anyone to write and publish to mass audiences. Corporate networks like Facebook and Twitter famously outcompeted newer attempts at protocol networks, like RSS, during this era.

Read write own era:

The third phase of the commercial internet, circa present day. During this period blockchain networks are democratizing ownership through tools such as tokens, which grant economic, governance and other rights to holders and enable internet services to be community-owned and -operated. Unlike protocol networks, blockchain networks have features and funding that can compete with read write era corporate networks.

S-curve:

A growth-over-time chart that many new technologies follow as they go from minimal to mainstream adoption. Resembles the letter “S”.

SMTP:

Short for “simple mail transfer protocol”, the open protocol that enables transmission of email. Created by Jon Postel, in 1981, SMTP is one of the internet’s original protocol networks along with HTTP, commonly known as the web.

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 token prices with network demand and utility.

Stable-coins:

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 computers that undergo state transitions according to their consensus mechanisms.

Take rate:

The percentage of revenue passing through a network - that is claimed by the network owner rather than by the network users. Protocol and blockchain networks feature persistently low or no take rates while corporate networks tend to have high ones. For example the web has zero take rate - whereas the most popular social networks - Facebook, TikTok, Twitter (since rebranded X) - have take rates of 99% or higher. Most blockchain networks have low take rates in the single-digit or sub-one - percentage range.

Tech stack:

A set of technologies that build atop one another and work together as layers, like a computer, operating system, and software applications. A popular model of the internet, called the Open Systems Interconnection (OSI) model, identifies a seven-layer internet tech stack, including a device layer at bottom, a networking layer above that, and an application layer at the very top.

Thick vs. thin networks:

Thick networks claim more profits for the center of a network, such as a corporate intermediary, and less for complementary layers, like creators, developers, and other network participants. Conversely, thin networks generate less profit for the network core and more for complements.

“Tokenomics”:

Short for “token economics”, a field concerning the design of incentive systems for virtual economies, as in blockchain networks. Healthy systems should balance sources of market supply and demand - such as faucets and sinks - to maintain equilibrium.

Tokens:

Units of ownership in 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, like bitcoin, or non-fungible, like NFTs.

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:

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 proofs:

ZK cryptographic techniques that can prove a claim is true while revealing, no other information - other than that the claim is true. Zero knowledge protocols can compress, and control access to information which has useful applications for blockchain network scalability, privacy and regulatory compliance.

LAST UPDATED 6 JUNE 2024