Glossary
Reference definitions for terms used throughout Bitpulse documentation.
Lending terminology
| Term | Definition |
|---|---|
| Vault | Standard term used across Bitpulse documentation for any lending position container. In Maple Finance, a vault (PoolV2) holds lender deposits and allocates capital to borrowers. In Morpho, a MetaMorpho vault allocates deposits across multiple Morpho markets according to a curator's strategy. For AAVE V3, the Ozone UI uses "Market" to match AAVE's terminology, but the underlying concept is the same. |
| Market | Context-dependent term. In Morpho, a market is a single collateral-asset/loan-asset pair with fixed parameters (LLTV, oracle, interest rate model). In AAVE V3, a market refers to a lending pool where multiple assets share a common collateral and borrowing environment — this is the label Ozone uses for AAVE in the UI. |
| Reserve | AAVE's term for a single asset within a market. Each reserve tracks the supply, borrow, and interest rate state for one token (e.g., USDC, WETH) inside the broader multi-asset lending pool. |
| Pool | Internal system term equivalent to "vault". You may encounter this in API responses and data schemas — it refers to the same construct. |
Risk metrics
| Term | Definition |
|---|---|
| Ozone Score | Composite risk score (0–10) combining market, oracle, and protocol risk. Lower = higher risk. |
| Extreme Event Resilience | Expected lender loss under a 10x volatility shock at the 99.99th percentile, simulated via Monte Carlo (GBM, 10,000 iterations, 365-day horizon). |
| Liquidation Buffer | Position-weighted average gap between borrowers' current LTV and their liquidation LTV. Measures headroom before forced liquidation. |
| Utilization Rate | Fraction of supplied liquidity that is currently borrowed. High utilization increases withdrawal risk. |
| Nakamoto Coefficient | Minimum number of entities (borrowers or LPs) that collectively control more than 50% of a resource. Lower = more concentrated = higher risk. |
| Max Power Ratio | Share of a resource (principal or liquidity) controlled by the single largest entity. |
| LTV (Loan-to-Value) | Ratio of loan value to collateral value. Higher LTV = less collateral backing each unit of debt. |
| Collateral Ratio | Inverse of LTV — collateral value divided by loan value. Higher = more collateral per unit of debt. |
| Expected Shortfall (ES) | Mean loss in the tail of a loss distribution beyond a given quantile (e.g., worst 0.01% of outcomes). Also known as Conditional Value at Risk (CVaR). |
| Volatility Shock | Multiplier applied to historical volatility in stress-test simulations. A shock of 9.0 means 10x current volatility. |
Protocol-specific terms
| Term | Definition |
|---|---|
| MetaMorpho Vault | Morpho's vault layer. A curator allocates deposited assets across multiple Morpho markets. |
| Morpho Market | A single collateral/loan pair on Morpho with fixed LLTV, oracle, and interest rate model. |
| Curator | Entity managing allocation strategy for a MetaMorpho vault. |
| LLTV (Liquidation LTV) | The LTV threshold at which a position becomes eligible for liquidation. Protocol-specific parameter. |
Simulation terms
| Term | Definition |
|---|---|
| GBM (Geometric Brownian Motion) | Stochastic process used to model asset price paths. Bitpulse's implementation uses time-varying volatility data and supports volatility shock multipliers to simulate extreme market regimes. Standard model for the Ozone stress test. |
| Monte Carlo Simulation | Method that runs thousands of randomized price path scenarios to estimate probability distributions of outcomes. |
| Model Lookback | Number of historical days used to calibrate simulation parameters (volatility, drift, correlation). |
| PrLiquidation | Probability that a position reaches the liquidation threshold during the simulation horizon. |
| PrMarginCall | Probability that a position triggers a margin call during the simulation horizon. |
| WorstCaseCCR | Worst-case collateral coverage ratio observed across simulation paths. |