Glossary

This glossary defines key terms used in GONDI's dApp.

Accrued Interest The loan interest amount accumulated over time but not yet paid.

Accrued Interest Profit The interest amount accrued by the lender currently holding the loan.

APR (Annual Percentage Rate) The annualized cost of borrowing, expressed as a percentage.

Buyout Period 48-hour window after loan default during which the lender with the largest principal can purchase other tranches in a multi-tranche loan.

Collection Offer A loan offer applicable to any NFT within a specified collection.

Due Date (Maturity Date) The date by which the borrower must repay the loan's principal and accrued interest to avoid default.

Effective APR (eAPR) The true loan cost including origination fees, calculated annually:

• Borrower eAPR: [Accrued Interest + Origination Fee / Principal] × [365/Duration]

• Lender eAPR: [Accrued Interest Profit + Origination Fee / Principal + Previous Interest] × [365/Duration]

Gross APR [Sum of 1 Year Accrued Interest] / [Principal Amount]

Interest The cost that accrues over time for borrowing, calculated based on APR, principal, and loan outstanding time.

Interest Cost The sum of outstanding interest and accrued interest from previous refinancings that new lenders must pay.

Junior Tranche Higher risk position in multi-tranche loans, repaid after senior tranches during liquidation.

Liquidation Process of selling defaulted loan collateral through buyout period or auction, with proceeds distributed by seniority.

Loan Default When a borrower fails to repay the loan plus accrued interest by the due date.

Loan Duration The period during which the borrower must repay the loan in full, including accrued interest—usually expressed in days.

Loan Offer A proposal extended by a lender outlining loan terms, including principal, APR, due date, Senior Tolerance, and optional origination fee.

Offer Capacity The total amount a lender is willing to allocate across all loans for a collection offer.

Origination Fee An optional one-time fee (WETH or USDC) paid by the borrower to the lender at loan origination or renegotiation. Deducted from the principal amount.

Previous Interest The interest amount accrued by previous lenders that new lenders must transfer during refinancing.

Principal The amount of WETH or USDC borrowed/lent.

Refinancing Transaction where a new lender provides better terms (minimum 10% APR improvement) to take over an existing loan. No borrower approval required.

Renegotiation Transaction where a lender proposes different loan terms that may not be strictly better. Requires borrower acceptance.

Repayment Amount The total amount to be repaid by the borrower, including principal and accrued interest.

Sell & Repay Feature allowing borrowers to list escrowed NFTs for sale with automatic loan repayment from proceeds.

Senior Tolerance (ST) The maximum debt amount (principal + interest) that can be senior to an offer when loans are combined.

Senior Tranche Lower risk position in multi-tranche loans, has repayment priority during liquidation.

Tranche Individual portion of a multi-lender loan with specific terms and seniority level.

Vault NFT that bundles multiple assets (ERC-721, ERC-1155, ERC-20) for use as collateral in a single loan.