Glossary

APW

APW is the governance token of Spectra Finance. It is used for governing the protocol. More information will be announced shortly.

APWine

APWine is the previous name of the Spectra protocol. There may still be some references to the old name in the contracts and documentation.

AMM

AMM stands for Automated Market Maker. It is a type of decentralised exchange (DEX) where users can easily swap certain assets to other assets. Liquidity Providers (LPs) can also provide those assets as liquidity in the AMM, earning swap fees for their services. Examples include Curve Finance and Uniswap.

IBT

IBT stands for Interest Bearing Token. It is a token that represents a deposit in a yield generating protocol such as Aave, Compound, or Yearn finance. For example, a user deposits 100 USDC into Aave, receiving 100 aUSDC in return. The 100 aUSDC would be the IBT, since it is accruing yield generated from Aave.

The IBT can then be deposited into the Principal Token to split the principal and yield, creating interest rate derivatives. For more information, see Tokenizing Yield.

Principal Token

The Principal Token (PT) is the token that represents the original (principal) amount that was deposited into the Spectra protocol. For example, if a user deposits 100 aUSDC, they will receive the principal tokens that represent 100 USDC, since the interest earned is split into the Yield Token.

For more information, see Tokenizing Yield

Shares (in relation to PrincipalToken)

Shares represent the user's share of a vault. In the case of the PrincipalToken, it represents the original deposit amount, i.e. the principal amount. Therefore when a user deposits 100 aUSDC, they will receive principal tokens representing 100 USDC and the associated yield tokens. The principal tokens are their 'share' of the vault, in relation to all other user deposits in the same vault.

In the contracts it is used interchangeably with Principal Token.

Tokenisation

Tokenisation refers to the operation of converting something, usually an asset, into a token. This is innovative and powerful as it enables the resulting token to be used throughout DeFi, in many use cases that the original designers may not have even imagined. It also allows composability between protocols, giving more freedom and flexibility to end users.

Vault

A vault is a contract that stores multiple user assets and follows certain guidelines to ensure the safety of those user assets. All vaults are EIP-4626 compliant.

veAPW

veAPW stands for Vote Escrowed APW token. It is used in governance, as detailed in the voting section. They are APW tokens that have been 'locked' for a certain period to enable voting power in the governance system.

Yield

Yield is the interest generated from a productive asset. In the context of DeFi, the yield is generated from an underlying protocol which performs certain operations that produce interest income. For example, Aave protocol enables lenders and borrowers to form a money market, generating interest for the lenders by charging fees to the borrowers.

Yield Marketplace

The Yield Marketplace is an upcoming feature of the Spectra protocol. More details will come soon.

Yield Token

The Yield Token (YT) represents the yield that will accrue to a certain Interest Bearing Token. For example, if a user deposits 100 USDC into Aave, they will receive 100 aUSDC that represents their deposit in Aave. If they take the resulting 100 aUSDC and deposit it into Spectra, they will receive Principal Tokens representing the 100 USDC and Yield Tokens representing the interest that will accrue to that deposit.

This is powerful and innovative as it allows the principal amount and interest earned to be separated, enabling new use cases in DeFi such as interest rate hedging or other interest rate derivatives.

MetaVault

A MetaVault is a cross-chain managed yield vault. It primarily aggregates liquidity positions (LP positions consisting of PT + IBT) across multiple markets and chains, and can also hold PTs and other assets. Idle liquidity can be deposited in liquid DeFi protocols for additional yield. MetaVaults delegate allocation to permissioned curators while enforcing on-chain safety constraints via Zodiac. They follow the ERC-7540 asynchronous vault standard. See the MetaVaults Overview for more details.

MetaVaultWrapper

The MetaVaultWrapper is the user-facing contract for a MetaVault. It implements the ERC-7540 interface (requestDeposit, deposit, requestRedeem, redeem) and holds wrapper shares (ERC-20) representing the depositor's pro-rata claim on the underlying infrastructure vault. See MetaVaultWrapper.

Epoch

An epoch is a discrete time period between two settlements. During an epoch, new deposit and redeem requests are queued but not processed until the next settlement. At the boundary between epochs, the accountant calls settle() to process all pending requests, compute performance fees, and start a new epoch.

Curator

A Curator is the permissioned role responsible for allocating liquidity within a MetaVault. The curator can buy/sell Principal Tokens and add/remove Curve liquidity — but only within the boundaries enforced by the Zodiac RolesModifier and on-chain validation contracts. See Access Control and Roles.

Infrastructure Vault

The Infrastructure Vault (also referred to as "infra vault") is the underlying vault contract (based on Amphor's AsyncVault) that actually holds and deploys the MetaVault's assets. The MetaVaultWrapper delegates deposit/redeem operations to this vault while maintaining its own share accounting layer on top.

Settle

Settle is the process that occurs at the boundary between epochs. During settlement, the accountant reports the new vault underlying value, performance fees are calculated and sent to the treasury, pending deposit requests are converted to shares, and pending redeem requests are converted to assets. The settle() function increments the epoch ID and begins a new epoch.

Max Drawdown

Max Drawdown is a safety parameter (expressed in basis points) that limits how much the vault's reported balance can decrease between epochs. If the new balance reported during settle() falls below lastSavedBalance * (10000 - maxDrawdown) / 10000, the transaction reverts. This protects depositors from catastrophic losses. The default max drawdown is 30% (3000 bps).

Zodiac

Zodiac is a modular governance framework for Safe multisigs, developed by Gnosis Guild. MetaVaults use the Zodiac RolesModifier to enforce fine-grained permissions on what the curator Safe can do, and the Delay module for time-delayed execution of sensitive actions. Each permitted action is scoped to specific contract addresses, function selectors, and parameter constraints. See Access Control and Roles and the Zodiac Roles documentation.