Glossary

Definitions for all terms used in WaterX documentation.

Term	Definition
ADL (Auto-Deleveraging)	When the Insurance Fund is depleted, the system force-closes profitable positions to protect LP solvency
AI Trading Copilot	WaterX's conversational AI trading assistant (Phase 2)
Borrow Fee	Hourly fee paid by position holders, dynamically adjusted based on utilization
Delegate Key	A permission-controlled key assigned to a sub-account that restricts the operations it can perform
Funding Rate	Periodic payment between longs and shorts to keep perp prices aligned with spot
Impact Fee	Dynamic fee calculated based on how a trade affects LP net exposure
Insurance Fund	Reserve that absorbs bad debt from liquidations
Isolated Margin	Each position's margin is calculated independently and does not affect other positions — WaterX uses this mode
Keeper	Automated program responsible for executing liquidations, limit orders, and rate updates
Leverage	Multiplier of position size relative to collateral
Liquidation	Forced closure of an entire position by the Keeper when margin is insufficient
Long	Bullish position — profits when price rises
Short	Bearish position — profits when price falls
Maintenance Margin	Minimum collateral to keep a position open = 1.5% × Position Size
Margin	Collateral deposited to open a position (USDC or USDsui)
Margin Ratio	Maintenance Margin / Position Equity — the closer to 100%, the closer to liquidation
Mark Price	Fair price used for PnL and liquidation calculations — equals Index Price on WaterX
Notional Value	Position Size × Mark Price
Open Interest (OI)	Total value of all outstanding positions
PnL (Profit and Loss)	Profit or loss — either Unrealized (open) or Realized (closed)
ROE (Return on Equity)	PnL / Initial Margin × 100%
Reserve Factor	WLP risk parameter controlling exposure levels
Sub-account	Child account under a main account with independent balance and positions
USDsui	SUI Dollar — a USD-pegged stablecoin on Sui, supported as margin and WLP deposit token on WaterX
WLP	WaterX Liquidity Provider — the liquidity pool token
zkLogin	Sui's zero-knowledge login — sign in with Google without managing private keys