Glossary
Terms used across private markets.
Accredited Investor
An individual with $200K+ annual income, $1M+ net worth (excluding home), or a Series 7/65/82 license. Required by SEC rules to trade private securities.
Under SEC Regulation D, an accredited investor is someone with a net worth exceeding $1M (excluding primary residence) or annual income above $200K ($300K joint) for the past two years. Many private company shares can only be sold to accredited investors due to securities law restrictions. Mithril facilitates access through tokenized wrappers and prediction markets that may broaden participation depending on jurisdiction.
AML
Anti-Money Laundering. Regulations that require platforms to verify user identities and monitor for suspicious activity.
AML regulations are enforced by FinCEN in the United States and equivalent agencies globally. Financial platforms must implement transaction monitoring, suspicious activity reporting (SARs), and customer due diligence (CDD) programs. Mithril integrates AML checks into its onboarding and transaction flows to ensure compliance with applicable regulations.
Cap Table
A ledger of who owns shares in a private company, including employees, founders, and investors. Your ownership percentage is determined by your cap table entry.
A capitalization table (cap table) records every equity holder in a company — founders, employees with stock options, angel investors, venture capital firms, and any other shareholders. It tracks share classes (common, preferred), vesting schedules, and dilution across funding rounds. When shares are sold on the secondary market, the cap table must be updated by the company's transfer agent. Mithril's tokenized equity wrapping process involves coordination with cap table records.
CLOB (Central Limit Order Book)
A matching engine that pairs buy and sell orders by price and time priority.
A CLOB maintains two sorted lists: bids (buy orders, highest first) and asks (sell orders, lowest first). When a new order arrives, the engine checks if it can match against existing orders on the opposite side. If the bid price meets or exceeds the ask price, a trade executes. Mithril uses in-memory CLOBs for both tokenized equity trading and prediction market order matching, with plans to move to on-chain settlement.
IOI (Indication of Interest)
A non-binding expression of willingness to buy or sell shares at a given price range.
In secondary markets, IOIs let buyers and sellers signal intent without committing to a trade. A seller might post an IOI saying they want to sell 10,000 shares of SpaceX at $180-$200 per share. Mithril's matching engine pairs compatible IOIs and facilitates introductions, moving parties toward binding deals. IOIs are common in OTC markets where liquidity is fragmented.
IRR
Internal Rate of Return. The annualized return on an investment, accounting for the timing of cash flows. The standard metric for PE fund performance.
IRR calculates the discount rate that makes the net present value (NPV) of all cash flows equal to zero. Unlike simple return percentages, IRR accounts for when capital is deployed and returned — a 2x return in 3 years has a much higher IRR than a 2x return in 10 years. PE funds typically target 15-25% net IRR. Mithril displays IRR estimates on LP interest listings to help investors compare fund performance.
Jupiter (DEX Aggregator)
A Solana-based decentralized exchange aggregator that routes swaps across liquidity sources.
Jupiter aggregates liquidity from dozens of Solana DEXs (Raydium, Orca, Meteora, etc.) to find the lowest-cost route for any token swap. It splits orders across multiple pools to minimize slippage. Mithril references Jupiter as part of its on-chain settlement infrastructure for tokenized equity trading on Solana.
KYC
Know Your Customer. Identity verification required by financial regulations. Mithril uses instant verification for 20+ countries.
KYC is a regulatory requirement for financial institutions to verify the identity of their customers before providing services. This typically involves collecting government-issued ID, proof of address, and in some cases source-of-funds documentation. Mithril partners with identity verification providers to streamline the KYC process, supporting instant verification across 20+ countries while maintaining compliance with applicable regulations.
Limit Order
An order to buy or sell at a specific price or better. May not fill immediately, but you control the price you pay.
A limit order specifies the maximum price you're willing to pay (for buys) or the minimum price you're willing to accept (for sells). The order sits in the order book until a matching counterparty appears or you cancel it. Limit orders give you price certainty but not execution certainty — if the market moves away from your price, the order may never fill. On Mithril, limit orders are the default order type for tokenized equity trading.
Liquidity
How readily you can buy or sell an asset. Public stocks are highly liquid. Private company shares are traditionally illiquid.
Liquidity measures how quickly an asset can be converted to cash without significantly affecting its price. Public stocks on NYSE or NASDAQ are highly liquid — you can sell millions of dollars in seconds. Private company shares are traditionally illiquid, requiring weeks or months to find a buyer, negotiate terms, and complete transfer agent paperwork. Mithril increases private market liquidity by aggregating multiple venues (tokenized trading, OTC matching, prediction markets) into a single interface.
Market Order
An order to buy or sell immediately at the current market price. Executes fast but you may not get the exact price shown.
A market order tells the matching engine to execute your trade immediately at the best available price. For buys, it takes the lowest ask; for sells, it takes the highest bid. In thin markets (common with private company shares), a large market order may experience slippage as it fills through multiple price levels. Mithril shows estimated slippage before you confirm a market order.
NAV
Net Asset Value. The total value of a fund's investments divided by the number of shares. Used to price LP interests.
NAV represents the per-share value of a fund's portfolio. For PE funds, NAV is typically reported quarterly based on the fund manager's valuation of each portfolio company. NAV can differ significantly from the price at which LP interests actually trade on the secondary market — LP interests often trade at a discount to NAV due to illiquidity and blind pool risk. Mithril displays both NAV and secondary market pricing for LP interests.
Order Book
A list of all buy and sell orders for a security, organized by price. Shows how many shares people want to buy (bids) and sell (asks) at each price level.
An order book is the core data structure of any exchange. It displays all outstanding limit orders, with bids (buy orders) sorted from highest to lowest and asks (sell orders) sorted from lowest to highest. The spread — the gap between the highest bid and lowest ask — indicates market liquidity. Mithril displays real-time order book depth for each tokenized equity, helping traders understand available liquidity before placing orders.
OTC (Over-the-Counter)
A decentralized market where assets trade directly between parties, not on a formal exchange.
OTC markets handle trades that don't occur on centralized exchanges. In private markets, OTC is the primary way shares change hands — a seller finds a buyer (often through a broker), they negotiate price and terms, and the company's transfer agent processes the share transfer. OTC trades are typically slow (weeks to months), opaque, and carry counterparty risk. Mithril aims to compress this timeline through tokenization and on-chain escrow.
PreStocks
Tokenized representations of pre-IPO company equity that trade on decentralized markets.
PreStocks are synthetic or wrapped tokens pegged to the estimated value of private company shares. They allow price discovery and liquidity for companies that haven't gone public yet. Unlike direct secondary sales, PreStocks can trade 24/7 with instant settlement. Mithril aggregates PreStocks pricing data alongside OTC and prediction market data to give users a complete view of private company valuations.
Proof of Reserves
An on-chain mechanism that proves every tokenized share is backed by a real share in custody. Mithril publishes these verifications publicly.
Proof of Reserves (PoR) is a transparency mechanism where a platform cryptographically proves that its on-chain token supply is fully backed by real assets held in custody. Mithril publishes regular PoR attestations showing that every wrapped equity token corresponds to a verified share held by the custodian and transfer agent. Users can independently verify these proofs on-chain at any time.
ROFR (Right of First Refusal)
Right of First Refusal. The company's right to buy back shares before you sell them to someone else. Common in private company shareholder agreements.
Most private companies include ROFR clauses in their shareholder agreements. When an employee or early investor wants to sell shares, they must first offer them to the company at the proposed price. The company typically has 30 days to decide. If they pass, the sale can proceed to the outside buyer. ROFR adds time and uncertainty to secondary transactions — Mithril's deal management tracks ROFR status throughout the process.
SAFE
Simple Agreement for Future Equity. A contract that converts into shares at the next funding round. Common for early-stage investments.
A SAFE is a financing instrument created by Y Combinator that gives investors the right to receive equity in a future priced round. Unlike convertible notes, SAFEs have no interest rate or maturity date. They typically include a valuation cap (maximum price per share at conversion) and/or a discount (percentage reduction from the next round's price). SAFEs are the most common instrument for pre-seed and seed investments, and SAFE positions can be traded on secondary markets.
Secondary Market
A market where existing shares of private companies are bought and sold between investors.
The secondary market lets shareholders in private companies — typically employees, early investors, or funds — sell their holdings before an IPO or acquisition. Unlike public stock exchanges, secondary markets are fragmented, illiquid, and often require manual negotiation. Mithril aggregates secondary market liquidity across OTC desks, tokenized platforms, and prediction markets into a single interface.
Settlement
The process of finalizing a trade. When you buy tokenized shares, on-chain settlement happens in seconds. Off-chain share transfer may take additional business days.
Settlement is the final step of a trade where ownership is officially transferred from seller to buyer. In traditional private markets, settlement can take weeks due to transfer agent processing, ROFR periods, and legal paperwork. With tokenized equity on Mithril, on-chain settlement (token transfer) happens in seconds on Base L2. However, if a user unwraps tokens to claim the underlying shares, off-chain settlement through the transfer agent may take additional business days.
Slippage
The difference between the expected price of a trade and the actual execution price.
Slippage occurs when there isn't enough liquidity at the desired price level, causing the order to fill at progressively worse prices. In a thin order book, a large market buy will push through multiple ask levels, resulting in a higher average price than the lowest ask. Mithril displays estimated slippage before order confirmation and allows users to set maximum slippage tolerance on tokenized equity trades.
SPV (Special Purpose Vehicle)
A legal entity created specifically to pool investor capital for a single investment in a private company.
SPVs are commonly used to aggregate smaller checks into a single line on a company's cap table. A fund manager creates an LLC, collects capital from multiple investors, and the LLC purchases shares. This simplifies the company's shareholder registry and lets smaller investors access deals with high minimums. Mithril may facilitate SPV formation for OTC deals where minimum ticket sizes exceed individual investor capacity.
Tokenized Equity
Private company shares represented as blockchain tokens for faster, programmable trading.
Tokenization wraps real equity into on-chain tokens (e.g., ERC-20 on Base). Each token represents a claim on underlying shares held in custody. This enables 24/7 trading, fractional ownership, instant settlement, and composability with DeFi protocols. Mithril charges a 1.5% wrap fee when shares are tokenized and a 1.0% unwrap fee when tokens are redeemed for actual shares.
Transfer Agent
A company (like Securitize or Carta) that maintains the official record of who owns shares. Required for tokenized securities.
A transfer agent is a regulated entity responsible for maintaining the official shareholder registry of a company. When shares change hands, the transfer agent updates the cap table to reflect the new owner. For tokenized securities, the transfer agent must coordinate with the token issuer to ensure that on-chain token balances match the official share registry. Major transfer agents in the private market include Carta, Securitize, and AST Financial.
Wrap / Unwrap
The process of converting private shares into tradeable tokens (wrap) or redeeming tokens for real shares (unwrap).
Wrapping takes verified private company shares and mints equivalent blockchain tokens, making them instantly tradeable on Mithril's order book. Unwrapping burns the tokens and initiates a transfer of the underlying shares to the token holder. Wrapping incurs a 1.5% fee (covering custody and verification), while unwrapping costs 1.0%. The process bridges the gap between slow traditional transfer agents and instant on-chain settlement.
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