Terminology

A glossary of DIVA Protocol specific terminology

General terms

Term	Description
Contingent pool	A programmatic escrow that receives and securely holds funds from users participating in a derivative contract and releases them based on the outcome of a pre-agreed future event, reported by an oracle following expiration.
Reference asset	A metric or event whose outcome determines the payout for long and short position tokens.
Long position token	A conditional claim against the contingent pool's collateral that benefits when the value of the reference asset goes up.
Short position token	A conditional claim against the contingent pool's collateral that benefits when the value of the reference asset goes down.
Collateral token	ERC20 token that is deposited into a contingent pool and backing the corresponding long and short position tokens.
Expiry	Time when the position tokens expire and the outcome of the underlying event is assessed.

Payoff specific terms

Term
Floor	Value of the reference asset at or below which the long token pays out 0 and the short token 1 (max payout).
Cap	Value of the reference asset at or above which the long token pays out 1 (max payout) and the short token 0.
Inflection	Value of the reference asset at which the long token pays out Gradient and the short token 1-Gradient.
Gradient	Long token payout at inflection (value between 0 and 1). The short token payout at inflection is 1-Gradient.

Oracle specific terms

Term	Description
Data provider	An Ethereum address (individual account or smart contract) that is supposed to report the final reference value following pool expiration.