Glossary¶
A comprehensive list of terms used on the Energy Substantiation platform.
A¶
Account¶
An entity registered on the EnSub platform. Accounts can be suppliers, buyers, or traders, each with different permissions and capabilities.
Account Location¶
A location configured for a supplier account. Required for creating offers.
Accrual¶
The process by which spread revenue is earned over time using the original issue discount (OID) method. Accrued spread moves from the spread account to the fee account over the duration of the obligation.
Auction¶
The daily matching event where offers and orders are paired to create fills. EnSub uses a Dutch auction mechanism.
Available Balance¶
The total funds available for trading: Internal Balance + External Balance + Credit Line.
B¶
Balance¶
The amount of a particular asset (USD or tokens) in an account. See Internal Balance, External Balance, Reserve Balance.
Bailee¶
The supplier that retains physical possession of commodity owned by the receipt holder. The bailee must safeguard the commodity, keep it free of liens and competing claims, and deliver it as instructed.
Bailor¶
The custodian acting for the benefit of tokenholders. The bailor holds the receipt and has the right to require delivery of the commodity from the bailee.
Burn¶
The process of exiting a token position. Burns destroy tokens and the holder receives cash settlement at the reference price.
Burn Fee¶
A 0.25% fee charged when burning tokens. Calculated on the redemption value.
Buy-Back¶
A supplier action to retire token obligations. Can be voluntary (token or USD) or forced by the system.
Backwardation¶
A market condition where futures prices are lower than spot prices. Opposite of contango. Generally favorable for futures-based products but less common than contango.
Benchmark¶
A recognized commodity market used as a point of comparison for a token's Reference Price.
Blacklist¶
An on-chain function that blocks specified addresses from interacting with the token contract. Used for sanctions compliance and court orders.
BTU (British Thermal Unit)¶
A measure of potential energy. One BTU is the energy required to raise the temperature of one pound of water by one degree Fahrenheit at sea level. See MMBTU.
C¶
Capacity¶
The maximum number of tokens a supplier can have outstanding. Calculated as Max Token Limit minus absolute Reserve Balance.
Clearing Discount¶
The discount determined by the Dutch auction where supply meets demand. All matched supplier trades execute at this discount. For suppliers, this determines their cost of capital.
Clearing Price¶
The uniform Reference Price at which buyers mint tokens, before the applicable mint fee. The supplier clearing discount affects supplier proceeds, not the buyer's base token price.
Contango¶
A market condition where futures prices are higher than spot prices. Common in oil markets (~82% of trading days historically). Causes tracking error for futures-based ETFs due to "sell low, buy high" roll costs.
Credit Line¶
A line of credit available for trading, added to internal and external balances for available balance calculation.
Custodian¶
A third-party qualified custodian that holds receipts for the benefit of tokenholders. Suppliers retain physical possession of the underlying commodities as bailees.
D¶
Discount¶
The percentage below reference price at which trades occur. Suppliers specify maximum acceptable discounts in offers.
Differential¶
An alternative to discount pricing where the price difference is specified in dollars rather than percentage (e.g., -$5.00).
Dutch Auction¶
An auction mechanism that evaluates the highest discount first and moves down until sufficient eligible supply can meet demand. For example, a 5% discount means offering at 95% of the Reference Price. An optimizer allocates supply among eligible suppliers to preserve diversification, so eligibility does not guarantee selection. All selected suppliers receive the same clearing discount.
E¶
ERC-20¶
The Ethereum token standard used by WTIC tokens. Provides standardized functions for transfer, approval, and balance queries. WTIC also supports EIP-2612 for gasless approvals.
External Balance¶
Funds held in physical custody outside the platform. Updated by settlement processes, not by auctions.
F¶
Fill¶
A record of an executed trade. Contains all details including quantity, price, discount, and associated terms.
Duration¶
The period over which spread revenue accrues (12, 24, or 36 months for regular offers). Sometimes referred to as the duration of the obligation.
Forced Buy-Back¶
A system-initiated buy-back when a supplier cannot fulfill token obligations. Ensures token holders can always redeem.
G¶
GTC (Good Till Canceled)¶
A time-in-force option where orders remain active until filled or manually canceled.
I¶
Internal Balance¶
Funds available for trading within the platform. Updated by auction operations.
K¶
Killed¶
An order state indicating the order failed validation and did not participate in the auction.
KYC/AML¶
Know Your Customer / Anti-Money Laundering. Regulatory requirements for identity verification and transaction monitoring. Required for all Energy Substantiation platform participants.
L¶
Location¶
See Account Location.
M¶
Mint¶
The process of creating new tokens. Occurs when a buyer's order matches a supplier's offer.
Mint Fee¶
A 0.1% fee charged when minting tokens. Paid by the buyer in addition to the purchase price.
MMBTU (Million British Thermal Units)¶
The unit of measurement for Volumetric Energy Receipts (VERs) held in custody. One million BTUs of energy content. WTIC tokens are denominated in barrels, but backed by MMBTU in custody: 1 barrel WTI = 5.8 MMBTU; 1 barrel Dubai = 5.65 MMBTU.
O¶
Offer¶
A supplier's commitment to supply at specified terms (quantity, discount, location, duration).
OID (Original Issue Discount)¶
The method used to calculate how spread accrues over the duration of a receipt obligation.
Order¶
A request to participate in an auction. Can be mint, burn, or buy-back orders.
P¶
Pre-Auction¶
The validation phase before an auction runs. Checks balances, capacity, and order validity.
Post-Auction¶
The finalization phase after an auction. Expires day orders and updates state.
R¶
Redeemable¶
A fill state indicating the position can be exited via burning.
Reference ID¶
A unique identifier linking related fills together (e.g., mint fill and supply fill).
Reference Price¶
The formula-defined token price used for minting, burning, and supplier discount calculations. It does not directly depend on Reference Exchange data and may differ from the reference-market close in the short term.
Refund¶
Return of applicable unaccrued spread to the supplier when tokens are burned early. The accrued and unaccrued amounts are determined using the OID method.
Reserve Balance¶
A supplier's net token obligation. Negative means they have outstanding obligations; positive is rare (over-settled).
RWA (Real World Asset)¶
Physical assets represented as blockchain tokens. Energy Substantiation tokens are RWA tokens backed 1:1 by physical commodities. Unlike synthetic tokens, RWAs have direct legal claims on underlying assets.
S¶
Settlement¶
The process of resolving a token obligation through cash payment.
Spread¶
The difference between reference price and the discounted price. It is held and accrued over the duration of the obligation using the OID method.
Supply¶
The offering side of the market; supplier capacity and tokens available.
Supply Fill¶
The fill record from the supplier's perspective, tracking token obligations.
Supply Quantity Remaining¶
The amount of tokens from a fill that can still be burned.
T¶
Time in Force¶
How long an order remains active. Options are Day (expires after next auction) or GTC (good till canceled).
Term Duration¶
The duration of an offer's obligation. Energy Substantiation offers standard durations of 12, 24, or 36 months.
Token¶
A digital representation of commodity exposure. Tokens are designed to track the underlying commodity benchmark over time and can be held indefinitely with zero carry cost.
Transaction¶
A ledger entry recording a balance change. All balance changes occur through transactions.
U¶
Undivided Interest in Commingled Goods¶
The legal structure underlying Volumetric Energy Receipts (VERs). Represents an ownership interest in a pool of commingled commodities without requiring segregated storage. Recognized under UCC Article 7.
V¶
VER (Volumetric Energy Receipt)¶
The legal instrument backing each WTIC token. The qualified custodian holds the receipt, which represents an undivided interest in physical commodities held by a supplier as bailee.
Voluntary Buy-Back¶
A supplier-initiated buy-back using tokens or USD to retire obligations.
W¶
WTIC (WTI Crude Token)¶
The primary Energy Substantiation token providing exposure to WTI crude oil. Denominated in barrels (1 WTIC = 1 barrel). Each token is backed by 5.8 MMBTU held in custody via Volumetric Energy Receipts.