> For the complete documentation index, see [llms.txt](https://docs.fractit.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.fractit.com/resources/glossary.md).

# Glossary

***

| Term                        | Definition                                                                                                                                        |
| --------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- |
| **AMM**                     | Automated Market Maker — prices assets algorithmically using a constant product formula. No order book required.                                  |
| **Canton Coin (CC)**        | Canton Network's native digital asset. One of Fractit's two settlement currencies.                                                                |
| **Canton Network**          | The privacy-preserving, enterprise-grade distributed ledger on which Fractit is built.                                                            |
| **Constant Product**        | The AMM pricing invariant: `x · y = k`. Maintained across every trade.                                                                            |
| **Custody Value**           | The marked-to-market value of all constituent shares held by the SPV, used in NAV calculation.                                                    |
| **DAML**                    | The smart contract language used on Canton Network. Purpose-built for financial agreements.                                                       |
| **DFMREI**                  | DFM Real Estate Sector Index — the reference index tracked by DFMREIT. Calculated by S\&P DJI on behalf of the Dubai Financial Market.            |
| **DFMREIT**                 | Fractit's first live index token — providing 1:1 on-chain exposure to the DFMREI.                                                                 |
| **Discount**                | When the AMM market price of an index token is below its indicative NAV.                                                                          |
| **Free Float Factor (FFF)** | The multiplier applied to a company's market capitalisation to reflect only freely tradeable shares in index weight calculations.                 |
| **Full Replication**        | The method of backing an index token by purchasing all actual constituent shares in their target index weights.                                   |
| **GICS**                    | Global Industry Classification Standard — the sector classification framework used by the DFM to categorise listed companies.                     |
| **Impermanent Loss**        | The difference in value between holding LP tokens versus holding the underlying assets separately, caused by price ratio changes in the AMM pool. |
| **Index Token**             | A Canton-native token representing 1:1 economic exposure to a basket of exchange-listed shares.                                                   |
| **Indicative NAV**          | Real-time estimated NAV per token, calculated using live market prices during trading hours.                                                      |
| **KYC**                     | Know Your Customer — identity verification and AML screening required before any activity on Fractit.                                             |
| **LP Token**                | A token issued to Liquidity Providers representing their proportional share of an AMM pool.                                                       |
| **Liquidity Provider (LP)** | A participant who deposits assets into the AMM pool to earn trading fees.                                                                         |
| **Management Fee**          | 0.25% per annum, accrued daily and reflected in the NAV.                                                                                          |
| **NAV**                     | Net Asset Value — the per-token value of DFMREIT, calculated from SPV holdings.                                                                   |
| **Official NAV**            | The NAV calculated daily after DFM market close using official closing prices.                                                                    |
| **Premium**                 | When the AMM market price of an index token is above its indicative NAV.                                                                          |
| **Price Impact**            | The effect of a trade on the AMM pool price, proportional to trade size relative to pool size.                                                    |
| **Redemption Fee**          | 0.50% deducted from the payout at the time of token redemption.                                                                                   |
| **Redemption Window**       | A pre-announced period during which token holders can burn DFMREIT for CC or USDC at NAV-based pricing.                                           |
| **Rebalancing**             | The quarterly process by which index constituent weights are reset and SPV holdings are adjusted to match.                                        |
| **S\&P DJI**                | S\&P Dow Jones Indices — the independent calculation agent for DFM Indices.                                                                       |
| **SPV**                     | Special Purpose Vehicle — the legal entity that holds constituent shares in custody on behalf of token holders.                                   |
| **Subscription**            | The primary market process of acquiring index tokens by depositing CC or USDC.                                                                    |
| **Subscription Fee**        | 0.50% applied at the time of primary market token issuance.                                                                                       |
| **USDC**                    | USD-pegged stablecoin accepted by Fractit for subscriptions, trades, and redemptions.                                                             |
| **VARA**                    | Virtual Asset Regulatory Authority — Dubai's regulator for virtual assets. Fractit is designed to operate within VARA's framework.                |
| **Whitelist**               | The on-chain list of KYC-verified wallets eligible to hold, transfer, and trade index tokens.                                                     |