Casten Protocol
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Glossary of Terms

Explains important terms around the Casten Protocol.
  • Senior Liquidity Providers — Participants who supply Senior tranche capital to individual Borrower Pools, and are protected by Junior tranche buffer which is usally 20-30%.
  • Junior Liquidity Providers — Participants who supply junior tranche (first-loss) capital to individual Borrower Pools.
  • Asset Mangers/Underwriters — Underwriters work with Borrowers to establish terms and performs requiste due-diligence on the borrowers and facilitates seemless on-boarding.
  • Borrowers — Participants who raise capital from the protocol via Borrower Pools.
  • Borrower Pool — Smart contract that encodes a set of financing terms for a Borrower, including the interest rate and repayment schedule, and through which the Borrower can borrow capital and repay it with those terms.
  • Epoch — Investments on Casten protocol are executed in epochs, time periods when pools are locked and opened for deposits and withdrawals.
  • Governance — Smart contract that is managed by the community DAO and has the ability to update the protocol via decentralized governance votes.
  • Senior Pool — Smart contract that accepts capital from Liquidity Providers and automatically allocates capital to the senior tranche of Borrower Pools according to the Leverage Model.
  • Tranches — Portion of a particular borrwer pool. Tranching is common in traditional strcutrued finance which involves tired investment structure enabling investors to invest in the same asset through different classes of shares with different risk/return profiles.