> For the complete documentation index, see [llms.txt](https://docs.efficientdex.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.efficientdex.com/glossary.md).

# Glossary

Definitions of the terms the Everlong and Efficient docs use, from Everlong vaults and value per share to the leverage curve and the roles.

This page defines the terms used across the Everlong and Efficient docs, grouped by topic. Each entry gives the general meaning. Where it helps, the first Everlong vault's value follows in brackets.

The first Everlong vault is cbBTC against USDC on Base, financed through Morpho Blue.

## Efficient and Everlong

* **Efficient**: the DEX that Everlong vaults run on, built as a liquidity unification layer. Each pool values its shares in one pool asset. It can borrow or lend the other token in its pair just in time, inside each swap. A pool can also run with no lending market at all. Anyone can create a pool through the factory and choose its hooks and settings.
* **Liquidity unification layer**: Efficient's description of what it does. DEXs hold the inventory that makes markets, while lending markets hold the capital that could finance it. An Efficient pool connects the two. A pool with borrowing on borrows the other token in its pair inside the swap that needs it. A pool with lending on supplies any surplus of that token.
* **Pool**: Efficient's contract, called a FLAMM in the code. It's both the exchange traders swap against and the vault that issues depositors' shares. On Everlong pages, "vault" means the product a depositor holds, and "pool" means the contract behind it.
* **Everlong**: the yield engine for hard assets, starting with BTC, built on Efficient. It runs Everlong vaults as their pool operator. Depositors in these vaults earn yield, measured and paid in the asset they deposit.
* **Everlong vault**: a pool on Efficient that Everlong runs with the Everlong hook. It borrows the other side of its pair instead of selling half of each deposit for it. That way, depositors keep close to 1:1 exposure. The first vault's share is Everlong cbBTC (`ev.cbBTC`).
* **Everlong hook**: the hook every Everlong vault runs. It holds the Everlong strategy and serves as the vault's invariant hook, fee hook and recentring hook. It also holds the leverage curve, the vault's second quote on every swap.

[Everlong](https://docs.foreverlong.io/everlong), [Efficient](/efficient.md) and [The Everlong strategy](https://docs.foreverlong.io/everlong/everlong-strategy) cover these terms in full.

## Assets and shares

* **Pool asset**: the asset a pool values its shares in, `poolAsset` in the code (cbBTC). A pool has one pool asset and measures its depositors' result in it.
* **Deposit asset**: the asset depositors put into an Everlong vault and want to hold (cbBTC). It's the vault's pool asset. The Everlong pages use this name for it.
* **Loan asset**: the other token in a pool's pair, `loanAsset` in the code, usually a stablecoin (USDC). It's the token the pool can borrow, and it keeps this name whether or not the pool borrows it. A pool can have up to 16 loan assets. Only the first trades directly against the pool asset. The others trade only through `swapLoan`, which needs a loan-to-loan swap hook and the loan-swap feature switch on (the first vault has neither).
* **Depositor**: anyone who holds a pool's shares. The pool measures a depositor's result in the pool asset, through value per share.
* **Share**: a depositor's holding in a pool, and a proportional claim on the pool's whole **book**. The book counts the pool asset held, or posted as collateral where the pool borrows. It adds any loan asset held or supplied, and subtracts any debt.
* **Value per share**: the pool's net asset value (NAV), measured in the pool asset, divided by the shares outstanding. A depositor's return is the growth in value per share.
* **Exposure**: how much a depositor's shares move with the pool asset's price. It's the percentage change in their value per 1% change in that price, for small moves. An exposure of 1, or 1:1, means the shares move exactly as holding the asset would. Everlong vaults target 1.
* **Net debt**: a pool's debt less the loan asset it holds or has supplied. While net debt is above zero, exposure sits above 1. Each share then carries a slice of that debt. An exit settles that slice out of the share's claim.

[How Everlong works](https://docs.foreverlong.io/everlong/how-everlong-works), [Maintaining 1:1 exposure](https://docs.foreverlong.io/everlong/maintaining-btc-exposure), [The pool and its book](/how-pools-work/the-pool-and-its-book.md), [Just-in-time financing](/how-pools-work/just-in-time-financing.md) and [Understanding returns](/use-efficient/provide-liquidity/understanding-returns.md) cover these terms in full.

## Trading and pricing

* **Sell** and **buy**: a sell trades the pool asset to the pool for the first loan asset. A buy is the reverse. The pool pays for a sell from the loan asset it holds or has supplied. It borrows the rest only if borrowing is on. A buy repays any debt first.
* **Swap** and **fill**: a swap is one sell or buy through the pool's `swap`. It fills on the invariant hook's curve, or on the leverage curve in an Everlong vault. A fill is what a swap or a Delayed request actually settles. A sell fills in part when it reaches the credit room or the per-swap cap. With borrowing off, it also fills in part when it reaches the loan asset the pool holds and has supplied. In a pool that borrows, a sell reverts if its lending markets can't fund it.
* **Per-swap cap**: each loan asset's limit on how much of it one swap pays out or takes in (1,000,000 USDC). A sell stops at the cap. A buy over the cap fills at the cap, and the trader keeps the rest. Only a loan-to-loan swap whose input exceeds the cap reverts.
* **Feed price**: the pool asset's price in a loan asset. The pool derives it from two USD prices on its price feed (Chainlink). A pool with a price band values its book at the feed price and checks every swap fill against it. A pool with no band reads no price on its swaps, deposits or exits.
* **Smoothed feed price**: the Everlong hook's moving average of the feed price. Each new price observation updates it. Anyone can record an observation with the pool's `poke`, and each recentre records one first.
* **Price band**: a range around the feed price. In a pool that has one, every swap fill must land inside it, fee included, whatever hooks the pool runs. The pool operator sets a band for each loan asset (8%), under the pool's band ceiling. The code caps each band at 10%. The ceiling starts at the band the pool is created with. A pool can run with no band only with borrowing off, one loan asset and an invariant hook that prices without a feed price.
* **Anchor**: the curve's reference price, the price the invariant hook's curve is centred on. Curve fills move the pool's price along the curve. Neither curve fills nor leverage fills move the anchor.
* **Recentre**: a move of the curve's anchor by the recentring hook. The keeper, the pool operator or the controller hook triggers it through the pool's `recenter`. In an Everlong vault, it's one bounded step towards the smoothed feed price, at most once per price observation. Recentring changes where the curve quotes. It leaves the pool's assets and debt as they are, so it doesn't change exposure.
* **Dynamic fee**: the fee the Everlong hook sets on each curve fill. It depends on inventory, realised volatility, drift from the anchor and direction. The hook clips it to the pool's fee cap (10%). The fee accrues to every share.
* **Arbitrage**: trading against the pool when its quote and the market price are further apart than the pool's fee plus the trader's costs. A curve fill pays the pool its fee and moves the pool's price back towards the market. A leverage fill keeps a spread. The exception is a lever-down filled wholly at the down cap's price (see below).

[Hooks](/how-pools-work/hooks.md), [Price feeds and oracles](/how-pools-work/price-feeds-and-oracles.md), [Fees](/use-efficient/fees.md), [The Everlong strategy](https://docs.foreverlong.io/everlong/everlong-strategy) and [Trade](/use-efficient/trade.md) cover these terms in full.

## Leverage in Everlong vaults

* **Leverage curve**: the Everlong hook's second quote on every swap. It's a square-root law that prices borrowing against the vault's leverage frame. A swap fills on it only when it pays the trader strictly more than the curve. A tie stays on the curve.
* **Lever-up fill** and **lever-down fill**: a sell filled on the leverage curve is a lever-up fill. It raises net debt. A buy filled on the leverage curve is a lever-down fill. It repays debt and releases the pool asset. Together they're the vault's **corrective trades**, because the leverage curve pays more in whichever direction brings frame CR back towards 2. Each keeps a spread for the vault (1.75%, or 1.3% on a lever-down while frame CR is under 2). The exception is a lever-down filled wholly at the down cap's price.
* **Leverage frame** and **frame CR**: the leverage frame is the balance sheet the leverage curve measures the vault on, in the first loan asset. Frame CR is a ratio. Its numerator is the book's value at the curve's centre, with the pool asset at the anchor. Its denominator is net debt plus the curve's stable side. Frame CR's target is 2, or 200%. A vault seeded with the pool asset alone starts there when its curve's spans are symmetric. Recentres, fees, leverage fills and interest on the vault's debt and supply all move frame CR.

[The Everlong strategy](https://docs.foreverlong.io/everlong/everlong-strategy) and [Maintaining 1:1 exposure](https://docs.foreverlong.io/everlong/maintaining-btc-exposure) cover these terms in full.

## Financing

* **Lending market**: an external market where a pool can borrow a loan asset against its pool asset. The pool can also supply surplus loan asset there for interest. Every pool can connect to lending markets, but doesn't have to. A pool with none trades only the inventory it holds. Morpho Blue is the first type of lending market Efficient connects to, and today the only one.
* **Venue**: the contract term for one lending market a pool uses. A venue is identified by its venue type, its loan asset and the market itself. A pool can have up to 32 venues, under the financing router's limit of 64 per pool.
* **Venue type** and **lending-market account**: a venue type is one kind of lending market. Morpho Blue is the only one implemented today. The financing router deploys a lending-market account for each pool, loan asset and venue type. That account holds the positions in its own name.
* **Financing router**: the one contract through which any pool on Efficient with lending markets borrows, repays, supplies and withdraws. It's built to plug into any lending protocol, starting with Morpho Blue.
* **LTV pin**: the pool's own loan-to-value ceiling (0.55). It sits at least a safety gap below the liquidation LTV of every lending market the pool can borrow from. For the first vault, that liquidation LTV is 0.86. Before each borrow, the pool posts enough collateral to keep that market's debt within the pin.
* **Credit check** and **credit room**: the credit check caps the net debt a sell can leave. Valued at the feed price, that net debt must stay within the LTV pin times the pool asset held or posted. The credit room is the largest sell payout that stays within that limit, counting the sell's input.
* **Drawn set**: the loan assets carrying debt at one time. The pool operator sets how many loan assets may carry debt at once, one by default. When the drawn set is full, the pool refuses a borrow of any loan asset outside it.
* **Execution buffer**: what a pool keeps on hand of each asset. It lets a trade pay out without borrowing or withdrawing at a lending market. On the loan-asset side, each loan asset's reserve target sets it. On the pool-asset side, it's the pool asset the pool holds, which pays buys first. In a pool that borrows, that's the pool asset it hasn't posted as collateral. The pool operator can set a reserve for this side with `setPoolAssetReserve`, but only by naming a lending market whose collateral earns. A buy's collateral release refills the buffer to that reserve. Morpho Blue collateral earns nothing, so that reserve is off on every pool today.
* **Reserve target** and **supply batch**: the reserve target is a loan asset's execution buffer. It's the amount of that loan asset a pool keeps on hand once its debt is repaid. Later sells pay from it before withdrawing supply or borrowing. The minimum supply batch is the smallest surplus over that target that a buy lends. The pool operator sets both for each loan asset (both zero).
* **Collateral top-up**: `maintainCollateral`, which anyone can call in a pool that borrows. No pause or feature switch stops it. It acts once a lending market's LTV has used a fifth of the room from the LTV pin to its liquidation LTV (about 0.61). It then posts unposted pool asset at the least healthy such market, back to what the pin requires.

[Just-in-time financing](/how-pools-work/just-in-time-financing.md), [Credit and collateral](/how-pools-work/credit-and-collateral.md) and [The pool and its book](/how-pools-work/the-pool-and-its-book.md) cover these terms in full.

## Getting in and out

* **Proportional deposit and exit**: the pool's own entry and exit calls, `depositProRata` and `redeemProRata`. Each adds to or takes from every part of the book in proportion. So no price is used to count shares, and depositors who stay lose no value. `mintProRata` is the same entry, sized in shares. It's open only while the book owes nothing, and only under its own cap (zero, which keeps it closed). The asset router, the entry market and the tranches build on these calls.
* **Asset router**: the contract behind the app's **Instant** option, the default. It makes a single-token deposit or exit in one transaction. It converts through DEX routers the pool operator whitelists (1inch and Velora). Each leg must return at least the feed price less 1%. When the pool has net debt, an exit needs the shares' slice of the debt for that one transaction, in either asset. That amount comes straight back in the payout.
* **Entry market**: the contract behind the app's **Delayed** option. It's for depositors who'd rather avoid the asset router's slippage. Someone fills each request by matching an opposite request, paying from their own inventory or settling through the pool. So an exit request needs only the depositor's shares, but there's no guaranteed time to a fill.
* **Tranches**: an optional layer that splits a pool's shares into two claims. Both are entered and left in pool shares. The senior tranche earns a target rate (4% a year, settable from 0% to 6%). The junior tranche holds the value that remains and takes losses first.
* **Deposit allowlist**: a list of addresses the pool operator allows to receive shares from a deposit (switched on). With it switched off, anyone can deposit. It never applies to exits. A pool binds its list at creation, and a pool bound to none admits every depositor.
* **Performance fee** and **high-water mark**: the performance fee is a pool's charge on gains. It's minted as new shares when value per share rises above its high-water mark. The high-water mark is value per share as it stood after the last charge, and it never falls. The fee has two parts on the same gain: the pool operator's and the protocol's. Each is at most 50% (both zero). A pool with no price band charges neither part.

[Deposits and withdrawals](https://docs.foreverlong.io/everlong/deposits_and_withdrawals), [Provide liquidity](/use-efficient/provide-liquidity.md), [Tranches](/use-efficient/provide-liquidity/tranches.md) and [Fees](/use-efficient/fees.md) cover these terms in full. [How to deposit and withdraw](https://docs.foreverlong.io/everlong/how-to-deposit-and-withdraw) gives the steps in the app.

## Roles and contracts

* **Pool operator**: the owner of a pool's authority contract, and so of the pool. It configures the pool, schedules delayed changes, and pauses and unpauses the pool. It appoints the keeper, the guardian and the fee receiver. Pool errors such as `NotCurator` refer to this role. Everlong is the pool operator of every Everlong vault.
* **Keeper**: a role the pool operator appoints for routine work within set limits. Its calls include:
  * recentring the anchor
  * posting the Everlong hook's tuning row with `setTuning`
  * moving the LTV pin with `setDials`
  * ordering the pool's venues
* **Guardian**: a role the pool operator appoints to pause a pool and tighten its settings, but never loosen them. It can also cancel scheduled changes to the pool's hooks, loan assets, venues and ceilings. In a pool that borrows, the guardian and the pool operator can repay debt or top up collateral directly, through the emergency lane.
* **Protocol Safe**: the multisig through which protocol governance acts for every pool on Efficient. It schedules new pool code, new venue types and rises in the protocol's performance fee. All three wait for the factory's upgrade delay. It can also pause new borrowing and supply on the financing router.
* **Hooks**: the contracts named in the pool's `HookSet`. The pool calls them for its pricing. The exception is the optional controller hook, which calls the pool to order its lending markets. Every pool runs three required hooks and can add two optional ones.
* **Invariant hook**, **fee hook** and **recentring hook**: the three required hooks. The invariant hook sets the liquidity curve that prices each fill. The fee hook sets each fill's fee. The recentring hook moves the curve's anchor.
* **Controller hook**: an optional hook that orders a pool's lending markets for certain operations, when the pool has more than one. It can also make the pool's `maintain` and `recenter` calls. It prices nothing, and none has shipped.
* **Loan-to-loan swap hook**: an optional hook that prices `swapLoan` swaps between a pool's loan assets. The pool's swap path for it is built and in audit. A pool adds one at creation, or later through a scheduled hook change. None has shipped, and the first vault has none.
* **Factory**: the contract anyone can use to create a pool in one call. Its `PoolCreated` event records the creator, the invariant hook and its code hash, and hashes of the hook set and risk settings. That record shows where a pool came from. It doesn't endorse the pool's strategy.
* **Feature switches**: seven bits the pool operator sets with `setFeatures`. They turn deposits, sells, buys, lending, maintenance, lever-up fills and loan swaps on or off. The guardian can only clear them. None of them stops an exit.
* **Pause**: the pool operator or the guardian can pause a pool, but only the pool operator can unpause it. A pause stops sells, deposits, loan swaps, `poke`, `recenter` and lending on buys. It never stops buys, exits, the collateral top-up or the emergency lane.
* **Governance delay**: the notice before certain changes to a pool take effect (10 days). It covers new hooks, loan assets and venues, and rises in the pool operator's performance fee. Raises of the band and fee-cap ceilings wait for it too. A band-ceiling raise waits at least 10 days.

[Roles and governance](/run-a-pool/roles-and-governance.md), [Pool operators](/use-efficient/provide-liquidity/pool-operators.md), [Hooks](/how-pools-work/hooks.md), [Build a hook](/run-a-pool/build-a-hook.md) and [Configure a pool](/run-a-pool/configure-a-pool.md) cover these terms in full.