Key Terms
APY
APY stands for Annual Percentage Yield; it is the return you get compounded over a year on your assets. The APY available in DeFi varies a lot depending on several factors, and sometimes changes very suddenly.
It differs from APR, which stands for "Annual Percentage Rate", hence referring to the returns of an investment over one year without compounding.
Block
A blockchain consists of blocks, which securely processes and records transactions.
Epoch
In the Solana network, an epoch represents a time period equivalent to the period of validity of a given leader schedule. An epoch lasts approximately 2 days.
Exchange Rate
The exchange rate between $fragSOL and $SOL refers to the value of $fragSOL in terms of $SOL. Because $fragSOL automatically accrues Solana staking and MEV rewards over time through an auto-rebase system, this exchange rate shifts over time. This shift accounts for the only staking and MEV reward. Rewards from NCN and AVS need to be claimed individually and do not interfere with the $fragSOL to $SOL exchange rate.
F Point
F Points reflect those of a user's contribution to Fragmetric. A user can get F Points just by depositing his assets in Fragmetric. These points can be some reference for further airdrops from Fragmetric.
Fragmetric’s Pool
The pool is the accumulation of the deposited assets from all users in Fragmetric. The pool holds a mix of LSTs such as $jitoSOL and $mSOL. Users deposit $SOL, but it remains as $SOL only to the extent needed for users to withdraw; the remaining is then converted into LSTs. Most of the tokens in the pool will be restaked and delegated to NCN and AVS, therefore generating additional restaking rewards based on those delegations.
Liquidity
Liquidity refers to the total amount of an asset that is readily available and circulating within a given protocol.
LST - Liquid Staking Token
Liquid Staking Token provides for staked assets, not excluding them in liquidity supply. Users receive LSTs when they stake, thus enabling them to earn rewards while still having the capability to trade or use these tokens in DeFi applications.
MEV Reward
MEV rewards are additional rewards created through optimization of transaction ordering within a block. MEV searchers bid in Jito for access to the MEV opportunity and winning bids are distributed with validators and stakers. This is purely incremental and does not bear the same risk as MEV trading. MEV serves as a boost atop base staking rewards received by stakers.
NCN (Node Consensus Network) | AVS (Actively Validated Service)
A network of nodes that reach consensus to provide a specific service or validate transactions.
Node Operator
Any entity or person that runs and maintains a node on a blockchain platform, which in this perspective is the network of Solana. They usually perform the service of transaction validation, ensuring security of the network, and in most occasions, they are incentivized with fees.
Protocol
Protocols are sets of basic rules that enable different computers to share data with one another. In the case of cryptocurrencies, they define how the blockchain or Decentralized Applications-the distributed database or services that allows digital money to be securely exchanged over the internet-is set up.
Restaking
Restaking enable the reuse of staked assets for further staking, realizing additional yields, extending basic staking to further increase earning possibilities and contributions to network functions, and thus enhancing one Chain's liquidity and efficiency.
Restaking Reward
Restaking rewards are extra rewards for users when they restake assets for the NCNs and/or AVSs in various platforms, such as Jito Restaking or Solayer. By this means, it secures services on the network of Solana and generates rewards additional to simple staking. In this case, they even have the right to choose which NCN or AVS they want to validate, with the possibility of adjusting their risk depending on every application's security needs.
Slashing
A penalty mechanism in proof-of-stake systems where validators lose a portion of their stake for malicious or negligent behavior.
TVL (Total Value Locked)
TVL is a metric representing the total value of asset in a protocol.
Validator
A node in a proof-of-stake network responsible for validating transactions and maintaining network consensus.