Exactly Protocol Vocabulary

title: Exactly Protocol Vocabulary
description: >
  Domain vocabulary and terminology for Exactly Protocol, a decentralized fixed and variable
  rate credit market protocol on Ethereum, Optimism, and Base. This vocabulary defines key
  concepts used across the protocol's smart contracts, documentation, and APIs.
url: https://docs.exact.ly
terms:

  - term: Market
    definition: >
      An ERC-4626-compliant vault contract for a specific underlying asset (e.g., USDC, WETH)
      that manages both floating (variable) and fixed-rate lending pools. Each market handles
      deposits, borrows, withdrawals, repayments, and liquidations for its asset.
    related:
      - ERC-4626
      - Maturity Pool
      - Floating Pool
    url: https://docs.exact.ly/guides/protocol/market.md

  - term: Auditor
    definition: >
      The central risk management smart contract that maintains the list of all active markets,
      manages collateral factors (adjust factors), computes account liquidity, and controls
      liquidation eligibility. All borrow operations must pass Auditor checks.
    related:
      - Collateral Factor
      - Account Liquidity
      - Liquidation
    url: https://docs.exact.ly/guides/protocol/auditor.md

  - term: Previewer
    definition: >
      A read-only peripheral smart contract that provides simulation methods for all core
      market operations. Allows off-chain queries of expected yields, costs, and account
      positions without sending any on-chain transaction.
    related:
      - Market
      - FixedPreview
      - MarketAccount
    url: https://docs.exact.ly/guides/periphery-contracts/previewer-read-only.md

  - term: Maturity Pool
    definition: >
      A fixed-term lending and borrowing pool identified by a Unix timestamp (maturity date).
      Users who deposit into a maturity pool earn a fixed rate determined at entry; users who
      borrow pay a fixed rate determined at entry. Funds are locked until maturity unless
      early exit is triggered with a discount.
    synonyms:
      - Fixed Pool
      - Term Pool
    related:
      - Market
      - Fixed Rate
      - Early Withdrawal

  - term: Floating Pool
    definition: >
      The variable-rate lending and borrowing pool within each Market, where rates adjust
      continuously based on current utilization according to the Interest Rate Model (IRM).
      ERC-4626 shares represent proportional ownership of the floating pool.
    synonyms:
      - Variable Pool
    related:
      - Market
      - Variable Rate
      - InterestRateModel

  - term: Adjust Factor
    definition: >
      A collateral efficiency parameter (0 to 1, scaled by 1e18) set per market by the Auditor.
      A user's effective collateral value equals their deposit value multiplied by the adjust
      factor. Also known as Loan-to-Value (LTV) ratio in traditional finance.
    synonyms:
      - Collateral Factor
      - LTV
    related:
      - Auditor
      - Account Liquidity

  - term: EXA
    definition: >
      The native governance token of Exactly Protocol (ERC-20). Distributed to depositors
      and borrowers through the RewardsController as incentives. EXA holders can participate
      in protocol governance through Snapshot voting.
    related:
      - esEXA
      - RewardsController
      - Governance
    url: https://docs.exact.ly/governance/protocol-governance

  - term: esEXA
    definition: >
      Escrowed EXA — a non-transferable reward token that vests into EXA over time through
      the stEXA staking program. Earned alongside EXA through the RewardsController and
      designed to align long-term incentives for protocol participants.
    synonyms:
      - Escrowed EXA
    related:
      - EXA
      - RewardsController
      - stEXA
    url: https://docs.exact.ly/governance/exa-token/esexa

  - term: RewardsController
    definition: >
      The smart contract that manages the distribution of EXA and esEXA tokens to depositors
      and borrowers. Implements a utilization-based reward split algorithm that dynamically
      adjusts the proportion of rewards going to each side based on market activity.
    related:
      - EXA
      - esEXA
      - Market
    url: https://docs.exact.ly/guides/protocol/rewardscontroller.md

  - term: InterestRateModel
    definition: >
      The smart contract implementing the Continuous Non-Linear Interest Rate Model (CNLIRM)
      used by Exactly Protocol to price both floating and fixed rate operations. The model
      uses separate sigmoid curves for floating and fixed rates with parameters including
      natural rate, natural utilization, spread factor, and maturity speed.
    synonyms:
      - IRM
      - CNLIRM
    related:
      - Floating Pool
      - Maturity Pool
      - Interest Rate
    url: https://docs.exact.ly/resources/white-paper

  - term: Dynamic Close Factor
    definition: >
      A liquidation mechanism that limits how much of a borrower's debt can be repaid in a
      single liquidation transaction, based on the borrower's health factor. As health
      deteriorates, the close factor increases, allowing larger liquidations of more
      distressed positions.
    related:
      - Liquidation
      - Health Factor
      - Auditor
    url: https://docs.exact.ly/features/dynamic-close-factor

  - term: Earnings Accumulator
    definition: >
      A mechanism that smooths the distribution of protocol earnings (from penalties, early
      withdrawal fees, and liquidations) over time to prevent sudden changes in exchange
      rates. The accumulator distributes earnings proportionally to the floating pool.
    related:
      - Market
      - Early Withdrawal
      - Bad Debt
    url: https://docs.exact.ly/features/earnings-accumulator

  - term: Bad Debt
    definition: >
      A borrower's outstanding debt that remains after all their collateral has been seized
      through liquidation. The Earnings Accumulator covers bad debt to protect depositors,
      distributing the loss proportionally across the floating pool.
    related:
      - Liquidation
      - Earnings Accumulator
      - clearBadDebt

  - term: Health Factor
    definition: >
      A metric representing an account's collateralization ratio. Computed as sumCollateral
      divided by sumDebt (both from the Auditor's accountLiquidity). A health factor below
      1.0 means the account is undercollateralized and eligible for liquidation.
    related:
      - Auditor
      - Account Liquidity
      - Liquidation

  - term: The Graph
    definition: >
      A decentralized indexing protocol used by Exactly Protocol to expose indexed on-chain
      data via GraphQL. Exactly maintains subgraphs on Ethereum mainnet and Optimism that
      index all market events, user positions, and protocol state.
    related:
      - Subgraph
      - GraphQL
    url: https://docs.exact.ly/guides/the-graph.md

  - term: ERC-4626
    definition: >
      The Ethereum token standard for tokenized vaults. Exactly Protocol's Market contracts
      implement ERC-4626, making each market a yield-bearing vault with standard methods
      for deposits, withdrawals, minting, and redemption, and a shares/assets accounting model.
    related:
      - Market
      - Shares
      - Assets

  - term: Subgraph
    definition: >
      An Exactly Protocol deployment on The Graph network that indexes all on-chain events
      and state changes. Provides a GraphQL API for querying historical and real-time data
      about markets, user positions, liquidations, and reward distributions.
    related:
      - The Graph
      - GraphQL
    url: https://docs.exact.ly/guides/the-graph.md

  - term: Liquidation Incentive
    definition: >
      A bonus paid to liquidators for repaying a borrower's debt and seizing their collateral.
      Consists of a liquidator bonus and a lenders' fee, both configured in the Auditor's
      liquidationIncentive parameter.
    related:
      - Liquidation
      - Auditor
      - Dynamic Close Factor