# Terminology We'll be using a variety of different acronyms and terms that you may or may not be familiar with throughout the whitepaper. Please familiarise yourself with the list below: **MRR:** Monthly Recurring Revenue. The revenue generated on a monthly basis from subscription fees, which by it's nature, recurs. **ARR:** Annual Recurring Revenue is the sum of all subscription revenue expressed as an annual value. For most companies, ARR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions) and cancelled subscriptions. **ACV:** Annual Contract Value. Used to measure the revenue of a single customer subscription contract over the course of a year. **TradFi:** Traditional Finance. The global economy is based on collective trust from users in centralised banking institutions. You trust the bank, or any financial service provider, with your capital to keep it safe, lend it out or generate a return. The majority of financial businesses today operate within the TradFi model. **CeFi:** Centralised Finance. Building off the back of TradFi, CeFi institutions centralise the operations of cryptocurrency. For example, Coinbase and Binance are both centralised exchanges where users assume trust that these exchanges will keep their holdings safe and allow them to participate in the crypto markets. CeFi institutions impose rules and regulations on users, such as withdrawal limits and KYC/AML checks to mitigate fraudulent and criminal activity. **DeFi:** Decentralised Finance. There is no third-party for users to place their trust in. Instead, users place their trust in the consensus model of the underlying blockchain that facilitates the financial transactions. Users retain custody of their assets and are free to trade however they please, without rules or regulations from a third-party. > Note: Revflow operates at the intersection between TradFi/CeFi and DeFi. Our interface with businesses (our customers) is centralised due to the sensitive data we process for credit-scoring. Our DeFi protocol is decentralised, with decentralised identity checks taken on Junior Tranche Investors. **DAO:** Decentralised Autonomous Organisations. DAOs are a community-led entity with no central authority. They are fully autonomous and transparent: smart contracts lay the foundational rules, execute the agreed upon decisions, and at any point, proposals, voting, and even the very code itself can be publicly audited. **Tokenization:** Tokenization in terms related to DeFi, is the process of converting an asset into a token that can be stored, moved and recorded on the blockchain. **NFT:** Non-Fungible Token. An NFT is a security token on a blockchain that is unique. For example, Bitcoin is fungible as you can trade it for another Bitcoin which is identical, but and NFT, such as a one-of-a-kind piece of art, is unique, and therefore non-fungible. **Asset-Backed Security:** An asset-backed security (ABS) is a type of financial investment that is collateralized by an underlying pool of assets. ABS's pay income at a fixed rate for a set amount of time, until maturity. For Revflow, the ABS is the future recurring revenue (future cash flow) of a business's subscription contracts. **Tranche:** Tranches are segments created from a pool of securities. For Revflow, this means bundling subscription contracts into an asset-backed security with two tranches (Junior and Senior) based on the underlying subscription contract's risk levels. **Trade:** The process of trading future recurring revenue (tokenised and securitised into an NFT asset-backed security) between a business and investors. **Junior Tranche Investors:** Junior Tranche Investors consist of Institutions, High-Net Worth Individuals, Corporations and DAO Treasuries who fund the Junior Tranche of trades. The Junior Tranche is riskier, but provider higher yields as an incentive. Junior Tranche Investors will be whitelisted to access the Junior Tranche, and will go through a decentralised KYC/B process. **Liquidity Pool:** Also known as an LP, a Liquidity Pool is a collection of funds locked inside a smart contract. The LP allocates these funds to generate a return for the investors. For Revflow, LP funds will be allocated to Vaults, where the funds will fill the Senior Tranches of trades. **Liquidity Pool Investors:** Consists of both retail investors and Junior Tranche Investors. Liquidity Pool Investors can only invest in the Liquidity Pool (unless they have Junior Tranche whitelisting), which acts as a continuous stream of capital to fund the Senior Tranche of trades and generates yield akin to index fund. Anybody is free and open to participate in as a Liquidity Pool Investor, but checks will be done against account addresses to ensure we are not onboarding addresses associated with fraudulent or criminal activities. **Junior Token:** The token Junior Tranche Investors receive when they stake USDC inside the Junior Tranche of a trade. This represents their stake in the trade and is used to withdraw repayments and yield from the associated vault. **Liquidity Pool Token:** The token Senior Tranche Investors receive when they stake USDC inside the Liquidity Pool. This represents their stake in the Liquidity Pool and grows in value as the LP generates yield. **Vault:** Pools of funds with an assigned strategy. For Revflow, there is a new vault for each trade that takes place. **TVL:** Total Value Locked in USD. The USD value that is in DeFi protocols. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://revflow.gitbook.io/revflow/terminology.md?ask= ``` The question should be specific, self-contained, and written in natural language. 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