📒Glossary

• Silica Pools: A Silica Pool is the set of all long and short positions within the same period (e.g. April 1 - April 30). Users can enter, trade, or close their positions anytime during the Pool’s period. The Pool tracks the rolling average of the index since the start (e.g. April 1). Upon settlement (e.g. April 30), the final payout is based on the average of the median BTC/kB per block across all blocks during the Pool’s period.

• Index: The Index is a time-varying benchmark value that reflects market dynamics. It's essential for setting the contracts' parameters and outcomes. An index example is the average BTC Tx Fee cost across a set period.

• Start/End: These terms denote the beginning and end dates of an Alkimiya contract. They frame the period for measuring the index's performance, setting the initial benchmark at start and the outcome at fin, which influences the contract's settlement.

• Breakeven: This is the avg. index value at which the users trade breaks even.

• Cap: The cap is a predetermined upper bound on the Pool’s payout. The cap limits the downside of the short positions. The cap’s value is set before the Pool starts, based on recent historical data. The cap is designed to be sufficiently high, such that the probability of the final payout (average of index across the Pool’s period) exceeding the cap is ≤ 1%.

• Long Position: Betting that the average value of the Index will be higher than the break-even. A Long position is represented on-chain by an NFT called a Long share.

• Short Position: Betting that the average value of the Index will be lower than the break-even. A Short position is represented on-chain by an NFT called a Short share.

• Period: The duration of time for which a Silica contract is valid and enforceable, this is set by Start and Fin

• Size: represents the amount of units of the index being traded. For instance, if the pool is based on the average price of a Bitcoin transaction fee, the Size might be specified in terms of kB (1,000 virtual bytes), which are units used to measure the size of a Bitcoin transaction.

• Orders: Orders allow users to enter Long and Short Positions at specified prices. Users can place orders indicating their price preferences and trading intent. If another user finds an existing order favorable, they can 'fill' it, thus completing the transaction.