Reference
The Coalition Glossary
The language of Cardano DeFi, explained clearly. A living reference for every term the Coalition’s playbooks, reports, and updates use. Designed to help new participants get oriented, and to give experienced builders a shared vocabulary.
Terms marked with ★ are the ones that appear most often in Coalition content and are worth learning first.
A
- APY (Annual Percentage Yield)★
- The annual rate of return on a yield-bearing position, expressed as a percentage. APY assumes compounding over a year. On Fluid, APY is variable — it moves with supply and demand in each market. → Stablecoin Yield
- ADA
- The native token of the Cardano blockchain. Used for transaction fees, staking, and as collateral in Cardano DeFi.
- Audit
- An independent security review of a smart contract’s code. An audited protocol has had external experts look for vulnerabilities. Audits reduce — but do not eliminate — smart contract risk.
B
- Borrow APY
- The variable annual interest rate paid by borrowers on an open loan. Always higher than supply APY, because the protocol keeps a spread. → Borrow Without Selling
- Borrower incentives
- Rewards distributed to borrowers to encourage activity in a lending market. The Coalition allocated 10,000 USDM in borrower incentives over 90 days at launch to bootstrap Fluid’s markets.
C
- Cardano★
- A proof-of-stake blockchain, launched 2017, known for research-driven development and native asset support. Home to USDM, Fluid, NBX, and the entire Coalition stack.
- Cardano-native asset
- A token that exists natively on Cardano at the protocol level — not wrapped, not bridged. USDM and fGLD are both Cardano-native. This reduces cross-chain risk relative to wrapped assets.
- Collateral★
- An asset you deposit into a lending protocol to secure a loan. If you fail to repay (or if collateral drops in value), the protocol uses your collateral to cover the debt. → Borrow Without Selling
- Coalition (USDM DeFi Coalition)★
- A coordinated liquidity initiative deploying aligned USDM capital into Cardano DeFi. Founding partners: Plomin Legacy Fund, NBX, Fluid, Wave Financial, plus BlockSign. Public data and playbooks at usdmdefi.com. → About the Coalition
D
- DCA (Dollar-Cost Averaging)★
- A strategy of buying a fixed amount of an asset on a fixed schedule, regardless of price. Mitigates timing risk. Common approach for long-term accumulation of volatile assets. → DCA into Gold with USDM
- DeFi (Decentralized Finance)★
- Financial services (lending, trading, yield, derivatives) built on public blockchains using smart contracts, without traditional intermediaries.
- DEX (Decentralized Exchange)
- An on-chain trading venue where users swap tokens through smart contracts. Minswap, WingRiders, and SundaeSwap are the major Cardano DEXs.
F
- fGLD★
- Tokenized gold on Cardano. Each fGLD token represents one gram of physical gold held in reserve. Issued and traded by NBX, used as collateral on Fluid, priced via oracle feeds. → DCA into Gold
- Fluid (FluidTokens)★
- A lending and borrowing protocol on Cardano, and the Coalition’s primary DeFi partner. Supports markets including USDM, fGLD, ADA, WMTX, SNEK, NIGHT, FLDT, IAG, Strike. → Stablecoin Yield
- FLDT
- The native token of the Fluid protocol ecosystem, and one of the supported markets in Fluid’s lending platform.
- Flywheel
- The Coalition’s operational model: mint USDM → deploy into DeFi → earn yield → reinvest → compound. Visualized at the homepage flywheel section.
G
- The Garden
- The Coalition’s canonical brand metaphor. Cardano DeFi is a garden; USDM is water; partners are gardeners; borrowers are seeds; yield is harvest. The metaphor is the strategy — coordinated capital deployment that makes the whole ecosystem grow.
H
- Health factor
- A numeric indicator of how close a borrowing position is to liquidation. Above 1.0 is safe; below 1.0 triggers liquidation. Different protocols display this differently — always locate it on your position page.
K
- KYC (Know Your Customer)★
- Identity verification required by regulated financial institutions — including USDM’s issuer Moneta Digital and co-issuer NBX. Standard process: ID, proof of address, sanctions screening.
L
- Lending pool★
- A smart contract that pools deposited capital from many suppliers, from which borrowers can draw. Interest paid by borrowers is distributed to suppliers pro rata.
- Leverage★
- Borrowing to amplify position size. A 2× leveraged position moves twice as much as a spot position — up and down. Leverage cuts both ways and carries liquidation risk. → RWA Strategy
- Liquidation★
- The forced closure of a borrowing position when collateral value falls below a protocol-defined threshold. The protocol sells collateral to repay the loan. Some protocols liquidate fully; Fluid’s fGLD markets use a partial liquidation model (~10% loss) instead.
- Liquidity
- The ease with which an asset can be bought or sold without moving its price. More liquidity = tighter spreads, better execution. The Coalition exists to deepen USDM liquidity across Cardano DeFi.
- Looping★
- A strategy where a user repeatedly deposits an asset, borrows against it, and uses the borrowed funds to buy more of the original asset. Amplifies exposure; also amplifies liquidation risk. → RWA Strategy
- LTV (Loan-to-Value)★
- The ratio of borrowed value to collateral value, expressed as a percentage. 50% LTV means borrowing half of collateral’s value. Each Fluid market has its own LTV limits.
M
- Moneta Digital★
- The issuer of USDM. A regulated entity responsible for reserve management, minting, redemption, and compliance. NBX is co-issuer.
- Minting
- Creating new USDM by depositing accepted stablecoins (currently USDC, USDT, PYUSD) through Moneta’s issuance portal after KYC.
N
- NBX (Norwegian Block Exchange)★
- A publicly listed Norwegian exchange, co-issuer of USDM, Coalition founding partner. Serves the EU and 150+ additional countries. Provides fiat on-ramp and fGLD trading. → NBX partner profile
- Non-custodial★
- A model where you hold your own private keys and control your own assets. Fluid is non-custodial — your USDM sits in a smart contract, not with a third party.
O
- Oracle★
- A service that brings off-chain data (like the spot price of gold) onto the blockchain. Fluid uses oracles to price fGLD collateral. Oracle reliability is a foundational requirement for any collateralized lending market.
P
- PAX Gold
- A well-established tokenized gold product on Ethereum. fGLD’s oracle feeds draw on PAX Gold-equivalent pricing for on-chain valuation.
- Partial liquidation★
- A liquidation model where only a portion of collateral is seized to bring a position back to health, rather than the full amount. Fluid uses this for fGLD markets — a critical protection for users running RWA strategies.
- Peer-to-pool
- A Fluid lending model where individual lenders supply into shared pools (as opposed to peer-to-peer, which matches specific lenders with specific borrowers). The pool model offers better liquidity and simpler UX.
- Peg
- The fixed exchange rate a stablecoin targets. USDM is pegged 1:1 to the US dollar. “Peg risk” refers to the (low but non-zero) chance of a stablecoin briefly trading away from its target.
- Plomin Legacy Fund (PLF)
- The investment arm of the Coalition’s parent structure. Deployed 20,000 USDM in the pilot round. Acts as the Coalition’s capital anchor. → Plomin profile
R
- RWA (Real-World Asset)★
- An on-chain representation of a physical or off-chain asset. fGLD is an RWA. The RWA thesis: on-chain markets for traditional assets will be bigger than on-chain markets for crypto-native assets alone. → RWA Strategy
S
- Self-custody★
- Holding your own private keys, typically in a wallet you control. Opposite of leaving funds on an exchange. The Coalition’s playbooks assume self-custody as the starting point. → Your First USDM
- Smart contract★
- Code deployed on a blockchain that executes automatically when conditions are met. DeFi is smart contracts. Smart contracts can contain bugs — hence “smart contract risk.”
- Stablecoin★
- A cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency. USDM is pegged to USD and backed 1:1 by reserves held by Moneta Digital.
- Supply APY
- The variable annual yield earned by suppliers in a lending pool. Derived from borrower interest paid, minus the protocol’s spread.
T
- Taxable event
- A transaction that triggers a tax reporting obligation in most jurisdictions — typically, selling or swapping an asset. A collateralized loan is generally not a taxable event, which is part of what makes Borrow Without Selling useful. Not tax advice. → Borrow Without Selling
- TVL (Total Value Locked)
- The total USD value of assets held in a DeFi protocol. A common headline metric for protocol size.
U
- USDM★
- A regulated, fiat-backed stablecoin issued by Moneta Digital with NBX as co-issuer, implemented as a Cardano-native asset. 1:1 USD-backed. The asset the Coalition is built around. → Your First USDM
- USDCx
- USDC-backed stablecoin available on Cardano via Circle’s xReserve. The other major stablecoin on Cardano. USDM overtook USDCx in daily volume in early 2026.
- Utilization★
- The percentage of a lending pool’s supplied capital that is currently borrowed. 100% utilization means all supplied funds are lent out — at which point new borrowing pauses and withdrawals wait for repayments.
W
- Wallet★
- A piece of software (or hardware) that manages your private keys and signs transactions. Cardano wallets commonly used by USDM holders include Eternl, Lace, Flint, GeroWallet, Vespr, and Begin.
- Wave Financial
- A US-based institutional investment firm. Coalition founding partner. Deployed 40,000 USDM in the pilot — the largest initial partner allocation. → Wave profile
Y
- Yield
- The return on a productive asset, typically expressed as APY. In Coalition context, yield comes primarily from borrower interest in Fluid’s lending markets.
Also appearing in Coalition markets
Supported markets on Fluid
The Coalition deploys into a curated subset, reviewed and adjusted on 30-day cycles. Selection criteria: fully doxxed company, favorable jurisdiction, objective ecosystem traction, mandatory borrower incentive program, ecosystem benefit.
- WMTX
- Wrapped MantraX
- SNEK
- Cardano community memecoin, significant liquidity
- NIGHT
- Midnight ecosystem token
- IAG
- IAGON
- Strike
- Strike Finance
- FLDT
- Fluid protocol token
This glossary is maintained by the USDM DeFi Coalition. Corrections or additions? Contact james.meidinger@w3i.global.