Glossary

Key terms used throughout Paragon documentation.

A

Ask

The lowest price at which a seller is willing to sell. Also called the "offer."

B

Basis

The difference between the perpetual futures price and the underlying index price.

Bid

The highest price at which a buyer is willing to buy.

Bounds

A price band around a market's reference price within which the mark price may move. It limits abrupt mark dislocations. See Bounds.

BTC.D

Bitcoin Dominance-Bitcoin's market capitalization as a percentage of total crypto market cap.

C

Circulating Supply

The number of tokens currently available and circulating in the market, excluding locked or reserved tokens.

Convexity

The tendency of a bond's price sensitivity to change as yields move. A perpetual settled on a yield index has no convexity, because its payoff is linear in the rate.

Cross Margin

A margin mode where your entire account balance serves as collateral for all positions.

D

Dominance Index

An index measuring one asset's market cap as a percentage of a broader market cap index.

DV01

The change in a position's value for a one-basis-point move in the underlying rate. On rates markets it is fixed by position size and does not vary with the level of rates.

E

Equity Perpetual

A cash-settled perpetual that tracks the price of one share of a stock, conferring no ownership, voting, or dividend rights.

External Price

The price derived from external market sources while a market's underlying is trading; it serves as the oracle price during covered sessions.

F

Funding Multiplier

A per-market scaling factor applied to the funding rate. Values below 1 dampen funding relative to the raw basis.

Funding Rate

Periodic payments exchanged between long and short position holders to keep perpetual prices aligned with the underlying index.

H

HIP-3

Hyperliquid Improvement Proposal 3-the framework enabling third-party perpetual futures deployment on Hyperliquid.

Hyperliquid

A high-performance blockchain and decentralized exchange for perpetual futures trading.

I

Impact Price Difference (IPD)

A measure of where order-book liquidity sits relative to the oracle price, used to advance the oracle when external pricing is unavailable.

Index Price

The calculated value of an underlying index, used as a reference for perpetual pricing and funding.

Initial Margin

The minimum collateral required to open a new position.

Isolated Margin

A margin mode where each position has dedicated collateral, isolating risk between positions.

L

Leverage

Using borrowed capital to increase position size. 20x leverage means $100 of margin controls $5,000 of exposure.

Liquidation

Forced closure of a position when margin falls below maintenance requirements.

Long

A position that profits when the price increases.

M

Maintenance Margin

The minimum margin required to keep a position open. Falling below triggers liquidation.

Maker

A trader who adds liquidity by placing limit orders that rest in the orderbook.

Mark Price

The price used for unrealized PnL, margin, and liquidations — a manipulation-resistant median of oracle and order-book inputs.

Market Cap

The total value of an asset, calculated as price × circulating supply.

Market Cap Index

An index tracking the aggregate market capitalization of multiple assets.

O

Open Interest Cap (OI Cap)

The maximum open interest allowed in a market. Once reached, new positions cannot open until open interest falls back below the cap.

Oracle

A system that delivers external data (like prices) to blockchain applications.

OTHERS

A market cap index tracking total crypto market cap excluding the top 10 assets.

Orderbook

A list of buy and sell orders for a market, organized by price.

P

Perpetual Futures

Derivative contracts that track an underlying asset with no expiration date.

Portfolio Margin

A margin mode where positions across multiple markets are margined together, allowing unrealized gains on one position to offset margin requirements on another. See Hyperliquid Portfolio Margin.

Position

An open trade. A long position profits from price increases; a short position profits from price decreases.

S

Short

A position that profits when the price decreases.

Slippage

The difference between expected trade price and actual execution price.

Spread

The difference between the best bid and best ask prices.

T

Taker

A trader who removes liquidity by placing orders that execute immediately against resting orders.

Tick Size

The minimum price increment for orders in a market.

TOTAL2

A market cap index tracking total crypto market cap excluding BTC.

U

Unrealized PnL

Profit or loss on open positions that hasn't been locked in by closing the position.