Glossary

Arbitrage The simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the asset's listed price. FaaSFi uses arbitrage to keep prices aligned between Kalshi and Polymarket.

Binary Option A financial instrument that pays out a fixed amount (usually $1.00) if a specific event occurs, and nothing ($0.00) if it does not. Prediction market shares are technically binary options.

Bonding Curve A mathematical formula used by some Automated Market Makers (AMMs) to determine the price of an asset based on its supply.

Conditional Markets Markets used in Futarchy governance. They ask "What will the price of Token X be IF Event Y happens?" These markets isolate the impact of a specific decision on a project's value.

Futarchy A form of governance where decisions are made based on market predictions rather than voting. The slogan is "Vote on values, bet on beliefs."

Introducing Broker (IB) A regulatory status that allows FaaSFi to facilitate trades for US customers on a regulated exchange (Kalshi) without being the exchange itself.

Liquidity The ease with which an asset can be converted into ready cash without affecting its market price. High liquidity means you can trade large amounts without causing slippage.

OBCD (Oracle-Bonded Corporate Derivative) FaaSFi's flagship product. A synthetic insurance contract that uses prediction market probabilities as the "Oracle" to trigger payouts for corporate hedging.

Proxy Wallet A smart contract wallet deployed on behalf of a user. It allows the FaaSFi protocol to execute trades atomically without requiring the user to sign every individual transaction manually.

Slippage The difference between the expected price of a trade and the price at which the trade is executed. Slippage often occurs when market orders are too large for the available liquidity.

Smart Order Router (SOR) An algorithm that automatically splits a single large order across multiple exchanges to find the lowest average price and minimize slippage.