# Appendix: Glossary To assist new institutional participants, developers, and asset managers, this appendix defines the core architecture concepts, specialized endpoints, and Bitcoin primitives engineered into the Nexus ecosystem. #### Network & Architecture Framework * Nexus Coordination Network The overarching decentralized financial layer. It does not exist as a single smart contract or centralized server, but rather as an interconnected mesh of self-hosted nodes calculating and routing liquidity cryptographically. * Nexus Composer The central parsing and routing entity. It receives market intents from Takers, matches them against the optimal liquidity curves generated by Maker nodes, and constructs the mathematical foundation of the draft PSBT. The Composer never holds funds. * Nexus Node (Dual-Mode) The core software binary hosted by participating institutions. It supports two concurrent operational models: * Maker Nexus: Configured specifically to run automated market-making algorithms (CPMM/CLMM/FPSSL) to strictly generate yield on idle assets. * Taker Nexus: Configured for high-frequency algorithmic traders and arbitrageurs to instantly pull market states and securely generate/sign optimal execution intents off-chain. #### Wallet & Settlement Structures * Trading Wallet The specialized hot/warm wallet environment operated internally by the Self-Hosted Nexus Node. Unlike traditional custodial wallets, it serves purely as an execution vault, holding the private keys necessary exclusively for the cryptographic signing of off-chain intents at millisecond latencies. * Fast Execution Account A Layer-2 state channel implementation built on Hash Time Locked Contracts (HTLCs). It acts as the backbone for high-frequency market-making, allowing participants to consolidate hundreds of separate trades and fee payments off-chain, deferring the expensive L1 network settlement to a single aggregated closure. #### Cryptographic Execution Primitives * Intent-Based Execution A structural pivot away from contract-driven DeFi. Rather than broadcasting specific execution commands (e.g., "Use Route A to swap X"), Takers only cryptographically sign their *desired outcome* (e.g., "I will output X only if I receive Y"). This closes the vulnerability to front-running and MEV since the strategy is never exposed. * PSBT (Partially Signed Bitcoin Transactions) A native Bitcoin standard (BIP 174) allowing multiple, entirely mutually distrusting parties to contribute inputs and outputs into a single transaction without exposing their private keys. Nexus utilizes this to ensure atomic swaps—the trade either executes perfectly as agreed, or mathematically fails to exist. * HTLC (Hash Time Locked Contract) A foundational Bitcoin script condition used extensively inside Fast Execution Accounts. It creates cryptographically secure escrows that mathematically guarantee funds will either be settled upon the revelation of a secret hash, or safely refunded after a predefined block height. #### Quantitative Liquidity Models Automated Market Maker (AMM) formulas utilized by the Nexus Maker nodes: * CPMM (Constant Product Market Maker) The foundational $x \times y = k$ invariant curve. It guarantees continuous liquidity from zero to infinity. In Nexus, arbitrage yield derived from this curve scales linearly with TVL, making the yield inherently non-dilutable. * CLMM (Concentrated Liquidity Market Maker) A highly capital-efficient evolution utilizing virtual reserves. Through the calculation $(x + \text{virtual}\_x) \times (y + \text{virtual}\_y) = k$, Maker Nodes constrain their liquidity deployment to a hyper-specific price band, dramatically compressing slippage at the cost of requiring active range management. * FPSSL (Fairly Paired Single-Sided Liquidity) A specialized mathematical curve engineered for liquidity providers wishing to expose only a single asset to the market, avoiding the complex dual-asset exposure traditionally required in CPMM pools. --- # 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://docs.on.nexus/resources-and-legal/glossary.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.