Glossary

Accelerated Leverage Engine (ALE) The Accelerated Leverage Engine allows advanced FiRM users to instantly multiply borrowing power up to 10x by looping borrowed DOLA into additional collateral at fixed rates, offering greater predictability than variable-rate leverage tools.

Bridge A mechanism for transferring assets like DOLA or DBR across blockchain networks (e.g., from Ethereum to Base), enabling multichain utility.

Collateral Assets such as wstETH or sUSDe that are deposited on FiRM to secure fixed-rate DOLA loans.

Collateral Factor The percentage of a collateral asset’s value that can be borrowed against, set by governance to manage risk and volatility.

Cover Decentralized insurance-like protection for sDOLA and FiRM assets, underwritten by Nexus Mutual and governed by OpenCover DAO for claims approval.

Daily Borrow Limits Daily borrow limits cap the amount of DOLA that can be borrowed per market each day on FiRM, managing protocol risk and enabling support for higher-risk collateral assets over time.

DBR (DOLA Borrowing Right) A tokenized interest mechanism used to pay fixed-rate loan costs on FiRM. One DBR allows users to borrow 1 DOLA per year.

DBR Streaming DBR tokens are continuously streamed to users who stake INV on FiRM, offering real yield with rates governed by the Fed Chair multisig.

DBR XY=K Auction A permissionless, automated Dutch auction where users buy DBR with DOLA at a dynamically adjusting price, helping repay protocol bad debt and deepen DBR liquidity for borrowers.

Delegate An address or individual authorized to vote on governance proposals on behalf of INV holders.

DOLA A decentralized, overcollateralized, debt-backed USD-pegged stablecoin minted via fixed-rate borrowing on FiRM.

DOLA Fed DOLA Feds are governance-controlled smart contracts that expand or contract DOLA supply in lending markets (like FiRM) or DEX liquidity pools to help manage DOLA's peg. By adjusting supply based on demand and earning LP rewards for the DAO, Feds enable precise, scalable peg stabilization while minimizing inflation and maximizing capital efficiency.

DOLA Savings Account (DSA) The DSA smart contract allows users to stake their DOLA stablecoin and earn DBR. While the main use of the DOLA Savings Account (DSA) is sDOLA, users and third party integrators who believe DBR is currently underpriced may utilize the DSA.

FiRM (Fixed-Rate Lending Market) Inverse Finance’s flagship lending protocol where users can borrow DOLA at fixed rates using approved collateral.

Fixed-Rate Loan A loan on FiRM with a stable borrowing cost over time, paid using DBR instead of variable rate interest.

Frontier Inverse Finance’s deprecated variable-rate lending market, previously known as Anchor.

Governor Mills The on-chain governance contract responsible for executing DAO proposals on Inverse Finance.

Governance Proposal An on-chain or forum-submitted proposal to modify protocol parameters, funding decisions, or governance structure.

INV Staking Rewards Protocol incentives distributed to users who stake INV, often supplemented by DBR emissions.

Inverse Finance A decentralized protocol offering fixed-rate borrowing, DOLA stablecoin issuance, and DAO-controlled monetary tools.

Isolated Market A FiRM structure where each collateral asset is siloed, preventing risk from spreading between markets.

Liquidation The process of selling off a borrower’s collateral if it becomes undercollateralized or fails to maintain a positive DBR balance.

Looping (Leveraged Borrowing) A technique where users borrow DOLA, swap it for more collateral, and redeposit it to increase leverage—enabled more efficiently through ALE.

LP Tokens (Liquidity Provider Tokens) Tokens received for providing liquidity on AMMs, which can be used as yield-bearing collateral on FiRM.

Personal Collateral Escrows (PCE’s) FiRM uses Personal Collateral Escrows to isolate each user’s collateral by token and wallet, improving security versus pooled collateral models and reducing systemic risk.

Pessimistic Price Oracle (PPO) FiRM’s security-enhancing oracle system that uses the lower of Chainlink’s current price or the 48-hour low (adjusted for collateral factor) to prevent borrowing against inflated collateral.

PT Tokens (Principal Tokens) Tokens representing the principal of a yield-bearing asset from protocols like Pendle, redeemable at maturity and usable as collateral on FiRM.

Replenishment A high-cost mechanism where a third party tops up a user’s DBR balance to prevent liquidation if it turns negative.

sDOLA (Yield-Bearing DOLA) A synthetic, auto-compounding stablecoin that earns DBR yield from FiRM and converts it into more DOLA over time.

sINV (Yield-Bearing INV) An ERC-4626 wrapper around staked INV where DBR rewards are auto-swapped for INV and reinvested, leading to a growing exchange rate.

Stablecoin A digital asset, such as DOLA, designed to maintain a stable value pegged to the U.S. dollar, typically overcollateralized and used in DeFi.

Variable-Rate Loan A loan where borrowing costs fluctuate based on market liquidity and supply-demand dynamics.

Yield-Bearing Collateral Collateral that generates passive income while being used to secure a fixed-rate DOLA loan on FiRM.