Glossary

Index of terminology and technical information related to the deFarm application.

deFarm

Social Investing Platform: A platform where users can invest, share trading ideas, and participate in investment funds or NFT investments within a social community context.

Farms: Refers to decentralized finance vaults, secure smart contracts used for storing and managing cryptocurrencies and other digital assets.

Vaultification: The trend within the decentralized finance (DeFi) space that involves creating secure vaults for managing assets and investments.

Farm: Non-custodial DeFi Vaults created and managed by users on the deFarm platform. Farm Managers can't access the assets within the Farm but can perform specific investment actions using allowed decentralized applications (dApps) and smart contracts.

Farm Manager: A user on deFarm who manages investment funds and trading ideas, earning performance fees from investors.

Farm Investor: A user on deFarm who invest their funds into trading ideas or strategies proposed by a Farm Manager.

Non-custodial System: Refers to a system where users have full control and ownership of their assets, executed without the need for a central authority to hold funds.

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Single Farm

Single Farm: A unique one-time type of DeFi vault on deFarm's platform. In Single Farm, a Farm Manager manages a single trade per vault. Investors can participate in a specific trading idea proposed by a Farm Manager and fund the corresponding farm. Once the trade is closed, realized profits or losses are instantly returned to the investors. This approach reduces risks for investors as their capital is dedicated to one trade, and it allows them to access unique trading opportunities proposed by expert Farm Managers.

Asset: Any digital or financial resource that holds value. In the context of deFarm, assets typically refer to cryptocurrencies and tokens held or managed within the platform.

Entry: Entry refers to the price at which a Farm Manager initiates a buy (long) or sell (short) order for a particular asset. It's the point at which a trade is executed.

Target: A target represents a specific price level at which a Farm Manager plans to sell an asset to secure profits or minimize losses. Targets are predetermined points set by traders to achieve their desired outcome in a trade.

Liquidate: Liquidate in deFarm refers to the automatic process by which a Farm's existing positions are sold and the resulting assets are returned to the investors. This occurs when the value of assets within the Farm hits a predetermined threshold loss level, ensuring that losses are minimized for investors.

Fundraising: The fundraising period refers to the specific duration during which investors can contribute funds to a manager's Single Farm. It is a limited time frame set for investors to participate in the trading ideas proposed by Farm Managers. Once this period concludes, no additional deposits or investments can be made into that particular farm.

Position: A position refers to the specific amount of assets held within a particular Farm managed by a Farm Manager.

Order: An order is a set of instructions given by a Farm Manager to buy or sell an asset. Orders specify various details, including the type of asset, the quantity to be bought or sold, the price, and the duration for which the order remains active. These orders can be market orders (executed at the current market price) or limit orders (executed only at a specific price or better).

PnL (Profit and Loss): PNL is used to assess the financial performance of investments within a Single Farm. A positive PNL indicates a profit, while a negative PNL represents a loss.

Commission: A Commission is a fee charged by a Farm Manager for providing asset management services. In Single Farm, commission is decided by the Farm Manager before the creation of that farm, ranging from 0-70%.

Size: Trading size indicates how much of a particular cryptocurrency or token a Farm Manager is buying or selling in a specific trade. Size = Margin * Leverage.

Margin: Margin refers to the collateral that a trader uses to enter larger trades. In the context of Single Farm, margin equal to the total deposits of the Farm.

Leverage: Leverage represents the ability for users to control a larger position with a smaller amount of their own capital. It allows investors to amplify their potential profits (or losses) by borrowing funds to increase their exposure to certain assets.

Entry Price: The price at which a trade is initiated.

Mark Price: The current market price of an asset.

Liquiditation Price: The specific price level at which an asset is automatically sold or liquidated.

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Seasonal Farm

Seasonal Farm: A specific type of DeFi Vault that operates within pre-set durations. It is managed by verified Managers and can be considered a form of Decentralized Hedge Fund. Unlike traditional hedge funds, Seasonal Farm remains non-custodial and fully transparent, allowing investors to monitor the fund's performance throughout the specified duration.

Net Asset Value (NAV): The net value of a Seasonal Farm, calculated by subtracting liabilities from the total value of all equities in the Farm's portfolio and dividing it by the number of outstanding shares. NAV is used to determine the price of the Farm's token, allowing users to purchase or sell shares of the Farm.

Farm's Token: A digital token (ERC-4626) representing ownership in the Seasonal Farm. Users purchase or sell this token when depositing or withdrawing funds. The value of the token is determined by the NAV at the time of the transaction.

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