IQSM | Glossary |

DOCUMENTATION TERMS

A2A
Account to Account

Ai
Artificial Intelligence

AiON (LCM)
Agentic Intelligence On

ALM
Asset Liability Management

ATM
At-the-Market

AVE
Available Value Enhancement

BM
Base Money

BMU
Base Money Unit

BTCX
Bitcoin Yield

CaaS
Currency as a Service

CAGR
Compound Annual Growth Rate

CD
Certificate of Deposit

CE
Credit Enhancement

CeBM

Central Bank Money

CFDX
Capital Flow Derived Indices

CFMM
Constant Function Market Maker

CN
Convertible Note

CP
Conversion Premium

CPC
Collateral Pool Constant

CR
Country Risk

CRN
Convertible Reserve Note

CUC
Collateral Uplift Constant

CUR
Collateral Uplift Rating

DeFi
Decentralized Finance

DSC
Domain Specific Concept

DSO
Diluted Shares Outstanding

DvP
Delivery v Payment

DW
Digital Wallet

DX
Decentralized Exchange

ECN
Enhanced Capital Note

EDM
Encoder Decoder Modelling

EL
Equity Line

EPC
Equity Pool Constant

ETF
Exchange Traded Fund

EPS
Earnings Per Share

ETN
Exchange Traded Note

ETX
Exchange Traded Index

FL
Funding Line

FTS
Fixed Total Supply

Foreign Exchange

FY
Funding Yield

GCU
Global Currency Unit

GDR
Global Drawing Right

Gen AI
Generative Artificial Intelligence

GL-1
Global Layer One Protocol

GOMO
Global Open Market Operations

GPM
Global Payment Method

GS
Global Series

GTM
Go to Market

GY
Global Yield

HQLA
High Quality Liquid Assets

HTM
Hold to Maturity

IFSC
Intelligent Financial Service Contract

IC
Intelligent Contract

ICR
Issuer Credit Rating

IM
Intelligent Mortgage

IQSM
Intelligent Quantitative System Model

IO
Interest Only

IRR
Internal Rate of Return

IY
Investment Yield

JRL
Jurisdictional Rating Level

LA
Language Agnostic

LCM (AiON)
Large Concept Model

LCM (Intangible Assets)
Lower of Cost or Market

LCR
Liquidity Coverage Ratio

LPC
Liquidity Pool Constant

LPM
Local Payment Method

LPV
Loan to Property Value

LRV
Loan to Reserve Value

LY
Local Yield

MA
Modality Agnostic

MB
Monetary Base

MM
Money Multiplier

MoE
Medium of Exchange

MVR
Market Value Risk

NDHI
Net Disposable Household Income

NDI
Net Disposable Income

NSFR
Net Stable Funding Ratio

OC
Over Collateralised

OOD
Object Oriented Design

P2P
Per to Peer

P&I
Principal and Interest Loan

PAiD
Personalised Ai Domain

PCN
Perpetual Convertible Note

PE
Price Earnings Ratio

PFM
Pre-Funded Mortgage

PO
Principal Only Repayment Loan

POC
Proof-of-Conversion

POL
Proof-of-Liabilities

POR
Proof-of-Reserves

PPC
Pre Paid Coupon

PPP
Pre Paid Principal

PQC
Post Quantum Cryptography

PR
Passthrough Ratio

PVM
Price Validation Model

QF
Quantitative Finance

QS
Quantitative Securities

QS
Quantitative Securities

QX
Quantitative Exchange

RA
Rating Action

ReFi
Regenerative Finance

ROA
Return on Assets

ROE
Return on Equity

ROTA
Return on Tangible Assets

ROTE
Return on Tangible Equity

RR
Reserve Ratio

RRL
Reference Rating Level

RW
Risk Weighting

RWA
Real World Assets

RX
Reserve Index

SDPs
Software Design Patterns

SI
Systemic Importance

SK
Sukuk

SKR
Sukuk Reserve

SoV
Store of Value

SPV
Special Purpose Vehicle

SS
Spread Shock

SSiD
Self-Sovereign ID

STX
Stablecoin Index

SU's
Semantic Units

SVF
Stored Value Facility

SVD
Stored Value Deposit

SWF
Sovereign Wealth Fund

T-1
Tier-1 Capital

TC
Trust Certificate

TD
Tokenized Deposit

TE
Targeted Enhancement

TR
Treasury Reserve

TRX
Total Return Index

TX
Treasury Index

TVL
Total Value Locked

UCIS
Underlying Collateral Index System

UDiD
Universal Digital Identity

UoA
Unit of Account

UUiD
Unique Universal Identity

VM
Virtual Mortgage

VX
Value Exchange

WALM
Weighted Average Loss Measure

XDR
Indexed Drawing Right

YC
Yield Curve

YE
Yield Equivalence

ZC
Zero Coupon

ZCC
Zero Coupon Convertible

Zeroes
Zero Coupon Instruments

ZP
Zero Principal

ZPN
Zero Principle Netting

General Terms

Agentic Accounts:

Unlike traditional AI models that simply respond to prompts, or execute pre-defined 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 reserve account holders. It 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 reserve services, on-demand.

Agentic Intelligence:

The application of agentic intelligence, in financial services - is game-changing - and industry transformative. Agentic reserve 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 client and ecosystem risk better than traditional methods by re-assessing and re-collateralising local risk levels continuously in real-time.

In asset management, they automate & manage collateralised reserve supply constants and reserve holdings - matching and executing exchanges based on real-time analysis and defined refinancing strategies. By continuously monitoring both - client and whole of ecosystem reserve operations in real-time, it can lock-down compliance with financial regulations, automatically.

Assetization:

Asset tokenization is a software defined process, that transforms ownership and title chaining rights to any asset into an intelligent and immutably trusted digital token on a value chain. It powers a paradigm shift, in how new - "bankable" - assets can be created, secured, invested and exchanged - far beyond the capabilities of all traditional local banking, money and financial service systems.

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

The democratization of asset ownership - on a truly open market basis for all - is the most compelling aspect of asset tokenization.

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).

At the Market:

An ATM offering is a follow-on offering of securities used to raise capitalover a period of time. Shares are issued into open trading markets through a designated selling agent, at prevailing market prices. The advantage is that there is minimal market impact and capital can be raised quickly - by selling newly issued shares into the trading flow of open markets without having to re-market the offering via costly "roadshows". Securities are thus able to trickle into open markets without significant impact on the market price.

Issuers can match and schedule issuance, to meet their ongoing needs, under intelligent token determined pricing and sales limit rulesets. This strategy can be particularly beneficial in relation to forward-sale options - allowing the issuer to sell securities, at the current open trading price, without actually issuing any securities to satisfy the forward commitment, until a future settlement date.

Base Money Units:

GCU open market linked local base money units, are - 10/100 foundation reserve line bonded & 1:1 synchronised, to funding service lines in perpetuity and activate - monthly - in each new funding cycle.

Global fixed total supply BMUs compound MoM - in unit value, by a fixed and certain minimum local funding service multiplier YoY - backed by loan regulated and synchronised repayments.

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 need only be developed - once. IFSC intelligent financial 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 equilibrium balanced and cleared.

Continuum:

An ecosystem continuum is - a math-proofed & regulated system of systems that is made up of common - form factored 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.

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.

Global Currency Units:

Global currency units are BMU:GCU 10/100 (10 line) - reserve line bonded and synchronised to single BMU funding lines and activate 1:1 as BMUs are released - in each new funding cycle.

Global currency units (GCUs) function as stable, interoperable local and global treasury fund tools and are a simple multi-line reserve referenced funding control representation - of a global base money system, with the capability to function in a - math-regulated - local (TradFi) or stateless (DeFi) mode on-demand.

Howey Test:

A three-pronged legal assessment for deciding what constitutes an “investment contract”, otherwise known as a security. Based on the 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 digital interactions, open market protocols can help to unravel the advantages that big-tech - and conventional financial service institutions have established, over recent decades - and force them to compete on an equal footing.

Internet protocol:

An established open market protocol, that defines how to format, address & 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 device layer.

Mechanism Design:

The field of mechanism design is not new and goes back more than 60 yrs. It's tools were especially useful - in auction theory, market design, and social choice theory. As opposed to game theory where mechanism design begins not with the game but a desired outcome - and aims to "reverse-engineer" a game of some form so that this desired outcome is an equilibrium.

Network effects:

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

Permissionless:

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

Protocol:

Technical standards for software, that enable computer systems to communicate with one another. They are analogous to natural language systems, which enable people to openly communicate.

Protocol coup:

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

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.

Regenerative Finance (ReFi);

Regenerative finance is a new approach to finance that seeks to regenerate natural and social systems - rather than extract finite value from them. Refi systems conform to sustainable practices and foster positive global impact, automating and supporting the regeneration of ecosystems, communities & the global economy.

Stablecoins:

Digital assets, purported to maintain, a true "stable" price usually "pegged" to single currency reserve assets - like the US dollar or regulated algorithmically - by automated market-making services.

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.

Sukuk:

A sukuk is an Islamic financial certificate that is similar to a bond in Western finance and which complies with Islamic religious law commonly known as Shariah. It represents a share or portion of ownership in a portfolio of eligible existing or future assets to be financed. Islamic law prohibits the use of "riba" or what we know as "interest" in the West.

Traditional Western debt instruments cannot be used - as viable investment vehicles or ways - to raise capital. To circumvent this sukuk were created in order to link the returns and cash flows of debt financing to a specific - identifiable - asset being purchased effectively distributing the benefits of that asset. Sukuk represent aggregate and undivided shares of ownership in a tangible asset as it relates to a specific project or investment activity. Hence an investor in a sukuk - does not own a debt obligation owed by the bond issuer but instead owns a piece of the asset that's linked to the investment. This means sukuk owners - unlike bond holders receive a portion of earnings, generated by the associated asset.

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.

Tier-1 Capital:

Tier-1 rated capital represents the core equity assets of a fund, a bank or financial institution and is largely composed of disclosed reserves also known as retained earnings, and common stock. A 100% Tier-1 fund is the - only - form of a true full reserve system.

Tokens:

Units of ownership - within blockchain networks. Digital assets or digital currencies, but more accurately defined in L1VM terms as intelligent data structures (IFSC's) that track and swap quantities, permissions and metadata for network users and 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.

Verifiable Computation:

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

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.

ZPN:

Zero principle netting is a term that describes the netting out - of two units of value - in the same form factor dimension, when one is positive and the other is negative such that they exactly cancel each other out in net carried value terms, on process completion.

LAST UPDATE 16 January 2025