Glossary

APR

Annual Percentage Rate, is the annualized interest rate without taking the effect of compounding into account.

APY

Annual Percentage Yield, is the normalized representation of an interest rate, based on a compounding period over one year.

BCV

Bond Control Variable, is the scaling factor at which bond prices change. A higher BCV means a lower discount for bonders and higher inflation by the protocol. A lower BCV means a higher discount for bonders and lower inflation by the protocol.

DAO

Decentralized Autonomous Organization, is a governance mechanism for making decisions in a more trust-less and collaborative way. Voting rights are often bound to a governance token. For Karma the governance token is sKARMA, the staked version of the KARMA token. Only sKARMA can be used to vote on Karma Finance proposals.

TBV

Total Bonded Value is the $ value of the pay-out assets sold to the bonders for the specific bond. It also represents the $ value accrued by the protocol for that particular bond.