Glossary

• APY (Annual Percentage Yield): The normalized amount a user stands to earn in a year, including compounding interest. This differs from APR which does not take compounding interest into account.

• Auto-Compounding: When your yield is automatically sold and re-added as more of the base asset, also contributes to a higher APY.

• Call Option: A contract that gives the right to buy an underlying asset at a specified price within a specific time period.

• CDP (Collateralized Debt Position): A CDP is similar to a loan. When users deposit assets as collateral, the Alto protocol issues an appropriate amount of USDO according to the user's LTV.

• Dust: Dust is a trace amount of cryptocurrency left over after a trade or transaction. It has small or negligible monetary value (from a fraction of pennies to a few dollars) and is usually not enough to cover the cost of a transaction, meaning that what remains is "trapped".

• ITM & OTM (In-the-Money & Out-of-the-Money): An ITM option is one with a strike price that is below the current market value. An OTM option is one that has a strike price that is above the current market value, meaning the option has no intrinsic value.

• Interest Rate: Additional debt owed in annualized terms to the principal, expressed in percentages..

• Omnichain: Communication via message passing between many otherwise non-interoperable blockchains.

• LTV (Loan-to-Value Ratio): The maximum borrowing power of a specific collateral asset. If a collateral asset has an LTV of 75%, for every one ETH the user will be able to borrow 0.75 ETH worth of USDO. LTVs are specified per collateral market and expressed as a percentage.

• Maximum Collateral Ratio (MCR): Parameter set per market. Once a CDP's collateral ratio exceeds the maximum collateral ratio, the position is flagged for liquidation.

• POL (Protocol Owned Liquidity): A model first employed by Olympus where a DAO owns its own liquidity.

• Strike Price: The fixed price that lenders with lock positions may purchase ALTO at OTC (Over-the-Counter) from the DAO, generally below the current spot price, or market value.

• Spot Price: The current price on the open market at which a given asset—such as a tokenized asset—can be bought or sold for immediate settlement.

• TVL (Total Value Locked): The total amount of value currently in the custody of smart contracts belonging to the designated protocol.

• Utilization Rate: Percentage of all of the funds supplied to a market that is actively being borrowed on the platform.