Glossary

Nine terms that decide whether a quoted rate on a tokenized stock means anything.

Tokenized stock

A blockchain token that tracks the price of a listed share. You hold a claim on the issuer, not the share itself, which means no voting rights and, in most cases, no dividend paid in cash to your wallet.

Base APY

The interest borrowers actually pay to supply-side depositors. It is the only part of a quoted rate that survives when an incentive programme ends. On tokenized stock markets it is currently near zero because almost nobody borrows against tokenized shares.

Reward APY

Yield paid in a protocol's own token out of an incentive budget, rather than by borrowers. It is a marketing cost and it can be reduced or stopped without notice.

Points

A tally a protocol keeps of your deposits, usually hinting at a future airdrop with no stated value, rate or date. Points are not an APY and cannot honestly be converted into one.

Collateral-only venue

A lending market that accepts a tokenized stock as collateral but never lends it out. Your deposit earns nothing; it only unlocks borrowing power. Aave V4's Equities Hub and Morpho Blue markets both work this way.

Looped vault

A vault that deposits your stock, borrows a stablecoin against it, buys more of the stock and repeats. It multiplies whatever incentive is being paid, and it introduces a liquidation price that holding the share directly never had.

TVL

Total value locked: the dollar value sitting in a market. A thin market can show a high rate that disappears the moment any real size arrives.

Oracle gap risk

Tokenized stocks trade around the clock but the underlying exchange does not. A price oracle has to quote something over the weekend, and the gap when the real market reopens can trigger liquidations before anyone can react.

Impermanent loss

What a liquidity provider gives up when prices move, compared with simply holding. The pool keeps its two sides equal in value, so as a stock rises it sells the stock and you end with fewer shares. With NVDA up 30% in a 50/50 pool you hold about 12% fewer shares and roughly 0.85% less value than if you had held. Trading fees have to cover it.

Concentrated liquidity

A pool design (Uniswap v3/v4, Orca, Raydium CLMM, Aerodrome Slipstream) where you choose a price range. Inside it your capital earns far more fees; outside it you earn nothing and hold only the side that lost. Quoted APYs assume you stay in range.

Fee tier

The share of each swap a pool pays its liquidity providers, such as 0.05%, 0.3% or 1%. Higher tiers earn more per trade but attract fewer trades.

Volume / TVL

A day's trading volume divided by the value in the pool: how hard each dollar of liquidity is working. A high ratio on a small pool often means a rate that will not survive more liquidity arriving.

In-kind yield

Yield paid in the same asset you deposited — more tokenized shares rather than a stablecoin. Kraken's xStocks Vaults pay this way.