📚 GLOSSARY OF TERMS
This glossary provides comprehensive definitions for all technical, financial, legal, regulatory, and blockchain-specific terms used throughout this whitepaper. Terms are organized by category for quick reference.
🔧 Technical and Blockchain Terms
API (Application Programming Interface) 🔌 A set of protocols and tools that allows different software applications to communicate with each other. Used for integrating third-party services and enabling programmatic access to platform features.
Automated Market Maker (AMM) 🤖 A decentralized exchange protocol that uses mathematical formulas (bonding curves) to price assets automatically, eliminating the need for traditional order books. Provides continuous liquidity through algorithmic trading.
Bonding Curve 📈 A mathematical formula that determines the price of tokens based on supply. As more tokens are purchased, the price increases according to the curve's parameters. Used for continuous token sales and liquidity provision.
OTCM Formula:
P(n) = initialPrice + (priceGradient × tokensIssued)
CEDEX (Centralized-Decentralized Exchange) 🏦 OTCM's purpose-built securities trading infrastructure achieving simultaneous satisfaction of permissionless trading, securities compliance, and custodial risk elimination.
Circuit Breaker 🛑 Automated trading halt mechanism triggered by extreme price movements or unusual market conditions. Prevents market manipulation and allows time for information dissemination.
OTCM Implementation: 2% price impact limits and 30% volume halt thresholds.
Consensus Mechanism 🤝 Method by which blockchain networks achieve agreement on the current state of the ledger. Examples include Proof of Work (PoW), Proof of Stake (PoS), and Solana's Proof of History (PoH).
CPMM (Constant Product Market Maker) 🔢 AMM implementation using formula (x × y = k) for price discovery, where x and y are token reserves and k is a constant. Used in CEDEX post-graduation trading.
DAO (Decentralized Autonomous Organization) 🗳️ An organization represented by rules encoded as computer programs (smart contracts) that are transparent and controlled by organization members rather than centralized leadership. OTCM uses DAO governance for protocol upgrades.
DEX (Decentralized Exchange) 🔄 A cryptocurrency exchange operating without central authority, using smart contracts for peer-to-peer trading. Examples include Uniswap, Raydium, and Orca.
⚠️ Standard DEXs cannot support OTCM's compliance requirements.
Gas Fees ⛽ Transaction fees paid to process and validate transactions on blockchain networks. On Solana, these are minimal (~5,000 lamports) compared to Ethereum.
Hash/Hashing 🔐 Process of converting input data into fixed-size string of characters using cryptographic algorithm. Used for data integrity, blockchain security, and immutable audit trails.
Layer 2 🔲 Secondary framework built on top of Layer 1 blockchain to improve scalability and efficiency. Processes transactions off main chain while leveraging its security.
OTCM Protocol operates as Layer 2 on Solana.
MEV (Miner/Maximum Extractable Value) 💸 Profit miners or validators can extract by reordering, including, or excluding transactions within blocks they produce.
✅ OTCM's architecture prevents MEV extraction through transfer hooks.
Multi-Signature (Multi-sig) 🔑 Security feature requiring multiple cryptographic signatures to authorize transaction. Used for enhanced security of high-value accounts and emergency protocol overrides.
Oracle 🔮 Service providing external data to blockchain smart contracts, bridging on-chain and off-chain information. OTCM uses oracles for custody verification, OFAC screening, and price feeds.
PBFT (Practical Byzantine Fault Tolerance) 🛡️ Consensus algorithm for distributed systems enabling agreement even when some nodes fail or act maliciously. Used alongside Proof of History in Solana.
Proof of History (PoH) ⏱️ Solana's innovation creating historical record proving events occurred in specific sequence, enabling high throughput of 65,000 TPS.
RPC (Remote Procedure Call) 📡 Protocol for executing code on remote servers. Solana RPC nodes provide API access to blockchain data and transaction submission.
Smart Contract 📜 Self-executing program on blockchain automatically enforcing agreement terms when predetermined conditions are met. OTCM uses Rust/Anchor smart contracts on Solana.
SPL Token 🪙 Token standard on Solana blockchain, similar to ERC-20 on Ethereum. SPL Token-2022 extends this with transfer hooks enabling compliance enforcement.
ST22 (Security Token 2022) 🎫 OTCM's tokenized securities using SPL Token-2022 standard with integrated transfer hooks for compliance verification.
TPS (Transactions Per Second) ⚡ Measure of blockchain throughput capacity.
Solana: 65,000 TPS | Ethereum: ~15 TPS
Transfer Hook 🪝 SPL Token-2022 mechanism executing verification code during token transfers. OTCM implements six sequential hooks for compliance enforcement.
TWAP (Time-Weighted Average Price) 📊 Price average calculated over time period. Used by OTCM's circuit breaker to detect abnormal price movements.
💵 Financial Terms
Accredited Investor 🎖️ An individual or entity meeting specific SEC criteria under Rule 506(c) of Regulation D, including:
- 💰 Minimum income: $200,000 individual / $300,000 joint
- 🏠 Net worth exceeding $1 million (excluding primary residence)
APY (Annual Percentage Yield) 📈 Annualized return rate accounting for compounding.
OTCM Staking: 8-60% APY with 2.6-day epochs (140 compounding events annually).
Beneficial Ownership 👤 The natural person(s) who ultimately owns or controls an investment, even if title is held in another name. SEC requires disclosure of beneficial owners holding more than 5% of public company shares.
Blue Sky Laws 🌤️ State-level securities laws in the United States that regulate the offering and sale of securities to protect investors from fraud. Named after speculative schemes with no more basis than "blue sky."
Book-Entry 📖 Securities recorded electronically rather than issued as physical certificates. Ownership tracked through electronic records maintained by transfer agents or clearing houses.
CUSIP 🔢 Nine-character alphanumeric code identifying North American securities for clearing and settlement. Required for most publicly traded securities.
Holding Period ⏳ Minimum time securities must be held before they can be sold.
Rule 144: Requires six-month holding period for restricted securities.
Impermanent Loss 📉 Temporary loss experienced by liquidity providers in AMMs when deposited asset prices change compared to holding assets outside pool.
Liquidity 💧 Ease with which an asset can be bought or sold without affecting its price. High liquidity means minimal price impact from trades.
✅ OTCM's unified LP architecture maximizes liquidity.
Liquidity Pool (LP) 🏊 Smart contract containing paired assets enabling decentralized trading. Users provide liquidity in exchange for fees from trades.
LP (Liquidity Provider) 🤝 Entity supplying assets to liquidity pool, earning fees from trades executed against the pool.
Market Cap (Market Capitalization) 💎 Total value of all tokens or shares in circulation, calculated by multiplying current price by circulating supply.
Pari Passu ⚖️ Latin term meaning "equal footing" - securities or creditors having equal rights to payment or assets.
Slippage 📊 Difference between expected and actual trade price due to price movement between order placement and execution.
Total Value Locked (TVL) 🔒 Total value of assets deposited in DeFi protocol, indicating protocol size and user trust.
Transfer Agent 🔄 Entity maintaining shareholder records and processing transfers for publicly traded companies. Must be SEC-registered.
OTCM Partner: Empire Stock Transfer
Vesting ⏱️ Process by which tokens or shares become available to recipient over time rather than immediately.
OTCM Schedule: 30-month vesting: 20% immediate → 20% at graduation → 20% every 6 months
Yield Farming 🌾 Practice of lending or staking cryptocurrency in exchange for interest or new tokens as rewards.
⚖️ Legal and Regulatory Terms
AML (Anti-Money Laundering) 🛡️ Legal and regulatory procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. Includes KYC procedures, transaction monitoring, and suspicious activity reporting requirements.
BSA (Bank Secrecy Act) 📋 U.S. legislation (31 U.S.C. § 5311) requiring financial institutions to assist in detecting money laundering through record-keeping and reporting requirements.
CCPA (California Consumer Privacy Act) 🔐 California state law providing consumers rights over personal information collected by businesses, including right to know, delete, and opt-out of sale of personal information.
CFR (Code of Federal Regulations) 📚 Codification of U.S. federal agency regulations. Securities regulations appear in Title 17 CFR.
DTC (Depository Trust Company) 🏛️ Subsidiary of DTCC providing custody and book-entry transfer services for eligible securities. Most US publicly traded securities are DTC-eligible.
EDGAR (Electronic Data Gathering, Analysis, and Retrieval) 💻 SEC's electronic filing system where companies submit required disclosures. Public database accessible for researching company filings.
FATCA (Foreign Account Tax Compliance Act) 🌍 US legislation requiring foreign financial institutions to report information about accounts held by US taxpayers to the IRS.
FATF (Financial Action Task Force) 🌐 Intergovernmental AML/CFT policy body setting international standards for combating money laundering and terrorist financing.
FinCEN (Financial Crimes Enforcement Network) 🕵️ US Treasury bureau collecting and analyzing information about financial transactions to combat money laundering, terrorist financing, and other financial crimes.
FINRA (Financial Industry Regulatory Authority) 📋 Self-regulatory organization overseeing broker-dealers in the United States. Licenses securities professionals and enforces industry rules.
Form D 📄 SEC filing required for companies raising capital under Regulation D exemptions.
⏰ Must be filed within 15 days of first sale.
GDPR (General Data Protection Regulation) 🇪🇺 European Union regulation on data protection and privacy, granting individuals control over their personal data.
Howey Test ⚖️ Four-part test from 1946 Supreme Court case determining whether transaction qualifies as "investment contract" and therefore security:
- 💰 Investment of money
- 🤝 In common enterprise
- 📈 With expectation of profits
- 👥 From efforts of others
KYC (Know Your Customer) 🪪 Process of verifying client identity to prevent fraud, money laundering, and terrorist financing. Includes collecting identification documents and verifying information.
OFAC (Office of Foreign Assets Control) 🚫 US Treasury office administering and enforcing economic sanctions against targeted foreign countries, entities, and individuals.
PCAOB (Public Company Accounting Oversight Board) 📊 Organization overseeing audits of public companies to protect investors. Auditors of public companies must be PCAOB-registered.
Regulation A+ 📜 SEC regulations (17 CFR § 230.251-263) permitting offerings up to $75M to non-accredited investors with investment limits.
Regulation D 📋 SEC regulation providing exemptions from securities registration requirements for private offerings. Includes Rules 504, 505, and 506.
Regulation S 🌍 SEC regulations (17 CFR § 230.901-905) for offshore securities offerings to non-U.S. persons.
Rule 144 📑 SEC rule allowing public resale of restricted and control securities if certain conditions are met, including holding periods.
Rule 15c2-11 📋 SEC rule requiring broker-dealers to review issuer information before publishing quotations for OTC securities.
SAR (Suspicious Activity Report) 🚨 FinCEN filing for suspected financial crime, required when transactions appear suspicious or exceed reporting thresholds.
SDN (Specially Designated Nationals) 🚫 OFAC list of individuals and entities with whom US persons are prohibited from conducting business.
SEC (Securities and Exchange Commission) 🏛️ US federal agency regulating securities markets and protecting investors through disclosure requirements and enforcement.
TA-1 📝 Transfer Agent Registration Form filed with SEC for transfer agent compliance and registration.
U.S.C. (United States Code) 📚 Codification of U.S. federal statutory law. Securities laws appear in Title 15 U.S.C.
🔗 Blockchain and Cryptocurrency Terms
Cliff (Vesting) 🧗 A period before any vested shares or tokens become available. After the cliff period, vesting may continue on a schedule. Commonly used to ensure long-term commitment.
DeFi (Decentralized Finance) 🏦 Financial services using smart contracts on blockchains, eliminating intermediaries like banks or brokers. Includes lending, borrowing, trading, and yield farming.
Digital Asset 💎 Any asset that exists in digital form and comes with right to use. Includes cryptocurrencies, tokens, NFTs, and digital representations of traditional assets.
Fiat Currency 💵 Government-issued currency not backed by physical commodity like gold. Examples include USD, EUR, GBP. Term often used in crypto to distinguish from digital assets.
Fungible 🔄 Property of an asset where individual units are interchangeable and indistinguishable. Dollars and most cryptocurrencies are fungible; NFTs are non-fungible.
Governance Token 🗳️ Token granting holders voting rights in protocol decisions. Used in DAOs for decentralized decision-making.
OTCM utility token provides governance rights.
Graduation 🎓 Irreversible transition from bonding curve to CPMM trading in OTCM Protocol.
Triggers: 72 hours elapse OR 127,000 unique holders participate.
Howey Shield 🛡️ OTCM's comprehensive compliance framework ensuring regulatory adherence through automated transfer hook enforcement.
ICO (Initial Coin Offering) 🚀 Fundraising mechanism where new cryptocurrency tokens are sold to investors. Similar to IPO but for digital assets rather than traditional securities.
Meme Token 🐸 A cryptocurrency inspired by internet memes, jokes, or cultural phenomena. Often community-driven with value derived from social sentiment, viral marketing, and collective enthusiasm rather than traditional fundamentals. Examples include Dogecoin, Shiba Inu, and Pepe.
In OTCM Protocol: Refers to tokenized securities that leverage meme culture for community building and liquidity generation.
NFT (Non-Fungible Token) 🖼️ Unique digital asset representing ownership of specific item or content, not interchangeable with other tokens.
OTCM LP (OTCM Liquidity Pool) 💧 Unified capital reserve serving all ST22 tokens through four accumulation mechanisms:
- 🎓 Bonding curve graduations
- 💰 Trading fees
- 🥩 Staking reinvestment
- 🔒 Permanent locks
Private Key 🔑 Cryptographic key allowing control of blockchain wallet and authorization of transactions.
⚠️ Must be kept secret.
Public Key 📬 Cryptographic identifier serving as wallet address for receiving cryptocurrency. Can be shared publicly.
Rug Pull 🚨 Scam where developers abandon project and steal investor funds, typically by removing liquidity from pools.
✅ OTCM's permanent liquidity locks make rug pulls "mathematically impossible."
Sandwich Attack 🥪 MEV attack where attacker places orders before and after victim's transaction to profit from price movement they cause.
✅ OTCM's transfer hooks prevent this attack vector.
Seed Phrase 🌱 Series of words serving as master key for cryptocurrency wallet.
⚠️ Anyone with seed phrase can access wallet funds.
Slashing ⚡ Penalty mechanism in Proof of Stake networks where validators lose portion of staked tokens for malicious or negligent behavior.
SMT (Security Meme Token) 🎫 Alternative term for tokenized securities on OTCM Protocol combining meme culture community engagement with real equity backing.
SOL ☀️ Native cryptocurrency of Solana blockchain, used for transaction fees and staking.
Solana ⚡ High-performance blockchain supporting 65,000 TPS with 400ms block times using Proof of History consensus.
OTCM's infrastructure blockchain.
SOLST 🏷️ Solana-based Liquidated Securities Token - Legacy term for ST22 tokens, now deprecated.
Staking 🥩 Locking cryptocurrency to support network operations in exchange for rewards. Used in Proof of Stake consensus.
OTCM staking nodes: 8-60% APY
Wallet 👛 Software or hardware storing private keys for accessing and managing cryptocurrency. Types include hot (online) and cold (offline) wallets.
Wash Trading 🚫 Illegal practice of buying and selling same asset to create misleading appearance of market activity.
✅ OTCM's circuit breakers detect and prevent this.
Web3 🌐 Concept of decentralized internet built on blockchain technology, emphasizing user ownership and control of data.
Whale 🐋 Individual or entity holding large amounts of cryptocurrency capable of significantly impacting market prices.
✅ OTCM's 30% volume halt protects against whale manipulation.
📋 SEC Filing Terms
10-K 📊 Annual report required by SEC providing comprehensive overview of company's business, financial condition, and results.
10-Q 📈 Quarterly report required by SEC providing unaudited financial statements and updates on company's financial position.
8-K 📢 Current report filed with SEC announcing major events or corporate changes of importance to shareholders.
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