Terms shared across the docs — Collateral, Oracle, Health ratio, and Psi — are defined once in the Glossary. This page covers the rest of the price-market vocabulary.

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Market setup

  • Market: A tradeable price market for one observable, volatile value, such as BTC-USD, gold, a stock, or an index.
  • Market ID: The market’s identifier. Apps and contracts use it to find the right pool and oracle.
  • Pool: The onchain contract that holds collateral, tracks positions, and settles trades for one market.

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Pool accounting

  • Pool shares: An internal accounting unit the pool uses to mint and redeem LP claims on the shared collateral. Pool shares are not how a trader position is valued.
  • Share price: The value of one pool share (total active collateral / total pool shares), used for LP mint and redeem.
  • Position value: The current value of a trader position, derived from collateral, direction, leverage, entry price, and the latest oracle price, then scaled by psi (see Adjusted position value below). It is not shares * share price.
A trader position can move because of the tracked oracle price and because of changes in the shared pool — psi, funding, fees, and other traders’ P&L.

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Positions and liquidity

  • Position: A trader’s long or short exposure in a price market.
  • LP lot: A liquidity provider’s deposit into a price market. Each lot has its own share balance and fee-sharing status.
  • Long: A position that benefits when the oracle price rises.
  • Short: A position that benefits when the oracle price falls.
  • Leverage: The multiplier that increases market exposure relative to collateral.

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Value and settlement

  • Position raw value: The position’s value before pool-level solvency adjustment. It reflects collateral, direction, leverage, entry price, and the latest oracle price.
  • Adjusted position value: The position value after pool state and psi are applied.
  • Payout: The collateral owed when a position closes or gets liquidated, after applicable caps and fees. For ordinary (non-cross-margin) positions it is held in settlement escrow until you claim it.
  • Settlement escrow: Collateral owed to you from a close or liquidation is held by the pool, not sent automatically.
  • Claim settlement: A separate claimSettlement action that transfers your escrowed collateral to your wallet. Cross-margin positions are the exception — their proceeds go straight to your margin account.
  • Liquidation price: An estimated oracle price where a position can become liquidatable.
  • Liquidation: The settlement path for an unhealthy position. A liquidator receives an incentive, and the remaining adjusted value is escrowed for the position owner to claim.

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Pool state

  • Active collateral: The pool’s effective collateral base used for position value and LP redemption.
  • Trader position collateral: Collateral assigned to active trader positions. This is separate from LP liquidity.
  • LP liquidity: Collateral supplied by liquidity providers. LPs back the pool and are exposed to aggregate pool performance.
  • Funding rate: A recurring payment between longs and shorts in some perpetual systems. TACO price markets do not use that long/short loop. Some markets can enable an optional trader-to-LP funding charge (off by default): traders pay funding into the LP pool, with the crowded side paying more.