> ## Documentation Index
> Fetch the complete documentation index at: https://docs.beliefsystems.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Key terms and definitions used throughout the Belief Index documentation.

Key terms used throughout the Belief Index documentation, explained for a finance-literate audience. Terms are grouped by category for easy reference.

***

## Index & NAV Terms

<AccordionGroup>
  <Accordion title="Belief Index">
    A family of rules-based indices, published by Belief Systems, that measure how prediction markets price themed categories of real-world event risk. Each index is organized as a "series" tracking a specific theme, valued at periodic NAV windows from observable market data and published as a chain-linked index level.
  </Accordion>

  <Accordion title="Series">
    A named, themed basket of prediction markets with assigned weights – the fundamental unit of a Belief Index. Each series tracks a specific theme such as monetary policy expectations, election outcomes, or economic indicators. Examples: "Belief U.S. Monetary Policy Dovish Stance Expectations Index," "Belief U.S. Presidential Election Republican Expectations 2028 Index." Analogous to a single named index within a provider's index family.
  </Accordion>

  <Accordion title="Maturity Type">
    The lifecycle classification of a series, set at publication and immutable thereafter. Every series is either **Fixed** (composition locked at publication; lifecycle bounded by market resolutions) or **Perpetual** (composition may evolve through formal reconstitution events; lifecycle open-ended). Displayed on each series detail page. See [Perpetual Series](/indices/perpetual-series).
  </Accordion>

  <Accordion title="Fixed Series">
    A series whose market composition is locked at publication and never changes. Its lifecycle is bounded – the series runs until all constituent markets resolve, at which point it reaches its terminal NAV. The default classification for event-bounded themes (e.g., a specific election or calendar year of macro data).
  </Accordion>

  <Accordion title="Perpetual Series">
    A series whose market composition may evolve over time through formal reconstitution events. Its lifecycle is open-ended – the series runs until manually archived. Suitable for thematic exposure to a domain that evolves (e.g., geopolitical conflict risk). Reconstitution adds new markets at a published review cadence; markets are never removed. See [Perpetual Series](/indices/perpetual-series).
  </Accordion>

  <Accordion title="Composition">
    The specific set of prediction markets, tracked outcomes, and weights that define a series. The composition specifies exactly which markets are included, which side (YES or NO) is tracked, and how much weight each market carries. Compositions are versioned – each change creates a new version for auditability.
  </Accordion>

  <Accordion title="Net Asset Value (NAV)">
    The valuation of a series' underlying basket, computed at each NAV window. In this documentation the published index computation uses the **Raw NAV** – a pure probability-weighted aggregate of constituent prices. Within the private Alpha Program, **NAV per Share** additionally accounts for custody cash and accrued fees. The two are defined separately below.
  </Accordion>

  <Accordion title="Raw NAV">
    The probability-weighted aggregate of all market prices in a series, bounded between 0 and 1. Computed as the weighted average of each market's midprice (or settlement price, if resolved). A Raw NAV of 0.65 means the weighted-average implied probability across all markets in the basket is 65%. See [NAV Methodology](/indices/nav-methodology).
  </Accordion>

  <Accordion title="Index Level">
    A rebased representation of Raw NAV, starting at 100 at inception. Computed as: `100 x (raw_nav / inception_raw_nav)`. Makes it easy to track percentage performance over time – an Index Level of 95 means a 5% decline from inception; 110 means a 10% gain. Analogous to the level of a price index like the S\&P 500 or FTSE 100.
  </Accordion>

  <Accordion title="NAV Per Share">
    An Alpha Program metric: the actual per-unit value of participants' shares in a series, `(Position Value + Custody Cash - Accrued Fees) / Shares Outstanding`. This is the price at which program shares are minted and redeemed. Unlike the Index Level (which is purely theoretical and gross of fees), NAV per Share accounts for actual on-chain holdings, uninvested cash, and accrued fees. See [NAV Per Share](/investing/nav-per-share).
  </Accordion>

  <Accordion title="Inception">
    The first successful NAV computation for a series. The Raw NAV at inception becomes the denominator for the Index Level calculation, setting the base at 100. All subsequent performance is measured relative to inception.
  </Accordion>

  <Accordion title="NAV Window">
    A periodic checkpoint at which every series is revalued and its index level published – currently every 30 minutes (subject to change). Within the private Alpha Program, pending mint and redemption orders also execute at the NAV per Share determined at the window. See [How It Works](/how-it-works).
  </Accordion>

  <Accordion title="Stale">
    A NAV computation that relies on outdated price data because one or more underlying market price fetches failed. When a fetch fails, the system uses the last known good price as a fallback and flags the computation as stale. Stale computations are always transparently marked so data users know the data quality.
  </Accordion>

  <Accordion title="Terminal NAV">
    The final, definitive NAV of a series after all underlying markets have resolved. Terminal NAV is not subject to further change and is never marked as stale, since all component prices are settlement prices (\$1 or \$0). No further computations occur after a series reaches terminal NAV.
  </Accordion>

  <Accordion title="Reconstitution">
    A formal event, initiated by Belief Systems, that modifies a Perpetual series' composition by adding one or more new constituent markets. Analogous to an index provider adding a company to the S\&P 500. Reconstitution is methodology-driven, forward-looking, and explicitly authorized. Markets are only added; never removed. See [Perpetual Series](/indices/perpetual-series).
  </Accordion>

  <Accordion title="Reconstitution Gate">
    A planned, bounded pause on mint, redeem, and NAV computation for a series while its reconstitution rebalance executes. The most recent pre-gate NAV remains authoritative during the pause; live updates resume once rebalancing completes and reconciliation passes. The gate typically lifts within roughly 48 hours of activation. Other series are unaffected.
  </Accordion>

  <Accordion title="Reconstitution Drag">
    The execution cost of a reconstitution – spreads, slippage, and placement costs incurred when custody holdings are traded to align with the new target composition. Absorbed in NAV, matching standard ETF convention. There is no separate reconstitution fee.
  </Accordion>

  <Accordion title="Chain-Linking">
    The mechanism that preserves index-level continuity across a reconstitution. The index level immediately before the composition change is recorded as the chain-link anchor, and a new `inception_raw_nav` is computed so the first post-reconstitution index level equals the anchor. The reported index history is continuous – the chart shows no jump. See [NAV Methodology – Chain-Linking](/indices/nav-methodology#step-5-chain-linking-perpetual-series).
  </Accordion>
</AccordionGroup>

***

## Market Terms

<AccordionGroup>
  <Accordion title="Prediction Market">
    A market where participants trade contracts that pay \$1 if a specified event occurs and \$0 otherwise. The trading price reflects the crowd's implied probability of the event. For example, a contract trading at \$0.70 implies the market believes there is a 70% chance the event will occur. Belief Index sources its data from a single prediction market venue.
  </Accordion>

  <Accordion title="Outcome Token">
    A digital token representing one side of a binary prediction market. A YES token pays \$1 if the event occurs; a NO token pays \$1 if it does not. These are ERC-1155 tokens on the Polygon blockchain. Outcome tokens are the underlying assets held in custody to back each series.
  </Accordion>

  <Accordion title="Tracked Outcome">
    The specific side (YES or NO) of a prediction market that a series composition follows. For example, a series might track the YES outcome for "Will the Fed cut rates?" – meaning the series holds YES tokens for that market. The tracked outcome determines which order book is used for pricing.
  </Accordion>

  <Accordion title="Midprice">
    The arithmetic mean of the best bid and best ask prices: `(best_bid + best_ask) / 2`. Used as the fair value estimate for each market in the NAV computation. The midprice is a theoretical value – it represents what a trade might execute at, but does not guarantee execution at that price. See [NAV Methodology](/indices/nav-methodology).
  </Accordion>

  <Accordion title="Order Book (CLOB)">
    A Central Limit Order Book – a list of buy orders (bids) and sell orders (asks) for a given market, sorted by price. The best bid is the highest price a buyer will pay; the best ask is the lowest price a seller will accept. Belief Index reads the top of book (best bid and best ask) from the venue's CLOB to compute midprices.
  </Accordion>

  <Accordion title="Resolution">
    The settlement of a prediction market when its underlying event occurs (or definitively does not occur). At resolution, the winning outcome token pays \$1 and the losing token pays \$0. Resolution is final and binary – there are no partial outcomes.
  </Accordion>

  <Accordion title="Settlement Price">
    The final price of an outcome token after market resolution: \$1.00 for the winning outcome, \$0.00 for the losing outcome. Settlement prices replace midprices in the NAV computation once a market resolves.
  </Accordion>

  <Accordion title="Spread">
    The difference between the best ask and the best bid in an order book. A narrow spread (e.g., \$0.01) indicates a liquid market with strong price discovery. A wide spread (e.g., \$0.05) indicates a less liquid market where the midprice is a less reliable estimate of fair value.
  </Accordion>

  <Accordion title="Slippage">
    The difference between the expected execution price and the actual execution price when trading. Slippage increases with order size relative to market depth. In thin markets, even moderate orders can experience significant slippage.
  </Accordion>
</AccordionGroup>

***

## Alpha Program Terms

<Info>
  The terms below describe functionality available only to approved participants in the **private,
  invitation-only Alpha Program**. Nothing in this documentation is an offer to sell or a
  solicitation of an offer to buy any security.
</Info>

<AccordionGroup>
  <Accordion title="Mint">
    The process of investing in a Belief Index series by creating new shares. Analogous to subscribing to a mutual fund or creating ETF shares through an authorized participant. The investor commits dollars from their cash balance, and new shares are issued at the NAV per Share computed at the next NAV window. Minting increases total shares outstanding. See [Minting Shares](/investing/minting-shares).
  </Accordion>

  <Accordion title="Redeem">
    The process of exiting a Belief Index position by surrendering shares for cash proceeds. Analogous to redeeming mutual fund shares. Shares are burned at the NAV per Share at the next NAV window, and the corresponding value (minus any redemption fee) is credited to the investor's cash balance. Redemption decreases total shares outstanding. See [Redeeming Shares](/investing/redeeming-shares).
  </Accordion>

  <Accordion title="Forward Pricing">
    The practice of executing orders at the **next** NAV window's price rather than the current price. When you submit a mint or redemption order, you do not know the exact price at which it will execute – it will be the NAV per Share computed at the next window. This prevents arbitrage against existing shareholders and is standard practice in mutual funds.
  </Accordion>

  <Accordion title="Shares Outstanding">
    The total number of shares currently issued for a series. Increases when new shares are minted, decreases when shares are redeemed. Share supply is elastic, not fixed – there is no cap on the number of shares that can exist. The sum of all investor balances always equals total shares outstanding.
  </Accordion>

  <Accordion title="Pro-Rata Scaling">
    When total order volume exceeds the available capacity in a NAV window, all orders are scaled down by the same percentage. No investor receives priority – everyone gets the same proportional fill. Unfilled portions are returned. Similar to how over-subscribed IPO allocations are handled.
  </Accordion>

  <Accordion title="Partial Fill">
    When an order is only partially executed due to capacity constraints. For example, if pro-rata scaling reduces all orders to 80%, a \$10,000 mint order would be filled for \$8,000 and the remaining \$2,000 would be returned to the investor's cash balance.
  </Accordion>

  <Accordion title="Cash Balance">
    Dollars held in your Belief Systems account that are not currently allocated to any series – the platform-wide account every investment draws on, much like the settlement cash in a brokerage account. Deposits land here, redemption proceeds return here, and the balance can be used to mint shares in any series or withdrawn. (Sometimes called your *uninvested balance*.) See [Deposits & Withdrawals](/investing/deposits-withdrawals).
  </Accordion>
</AccordionGroup>

***

## Custody & Blockchain Terms

<AccordionGroup>
  <Accordion title="pUSD">
    Polymarket USD – the dollar-pegged stablecoin used internally as the cash leg of prediction market positions. pUSD is backed 1:1 by USDC and is held in custody on the Polygon network. Alpha Program participants do **not** interact with pUSD directly: deposits arrive as USDC and are converted inside custody, and withdrawals are returned as native USDC on Ethereum mainnet. pUSD is mentioned only where it matters for custody verification.
  </Accordion>

  <Accordion title="USDC">
    USD Coin – a dollar-pegged stablecoin issued by Circle, redeemable 1:1 for U.S. dollars. USDC is the funding currency for Alpha Program deposits; the system handles all subsequent conversions internally.
  </Accordion>

  <Accordion title="Polygon">
    The public blockchain network where Belief Systems custody is held. Anyone can query custody balances on Polygon directly. Polygon is operated by Polygon Labs and provides the low-cost, high-throughput settlement layer underneath the constituent positions.
  </Accordion>

  <Accordion title="ERC-1155">
    A token standard on Ethereum-compatible blockchains that supports multiple token types within a single smart contract. Prediction market outcome tokens use the ERC-1155 standard, allowing both YES and NO tokens for a given market to exist within one contract.
  </Accordion>

  <Accordion title="ERC-20">
    A token standard on Ethereum-compatible blockchains for fungible tokens. pUSD and USDC are both ERC-20 tokens – each unit is identical and interchangeable, similar to how each dollar bill is identical.
  </Accordion>

  <Accordion title="Custody Wallet">
    A dedicated wallet on the Polygon blockchain that holds the assets backing each series (pUSD and outcome tokens). All custody wallet holdings are publicly verifiable on-chain. Withdrawals from the custody wallet require human approval and automated solvency verification before execution.
  </Accordion>

  <Accordion title="On-Chain">
    Recorded on a public blockchain. On-chain data is transparent (anyone can read it), immutable (cannot be altered after recording), and independently verifiable. When we say positions are held "on-chain," it means their existence can be confirmed by querying the Polygon blockchain directly.
  </Accordion>

  <Accordion title="Smart Contract">
    A program that runs on a blockchain and executes automatically when predefined conditions are met. Multi-signature wallets, outcome tokens, pUSD, and USDC are all implemented as smart contracts. Smart contracts are transparent (their code is publicly readable) but may contain undiscovered bugs.
  </Accordion>
</AccordionGroup>

***

## Fee Terms (Alpha Program)

<AccordionGroup>
  <Accordion title="Management Fee (Expense Ratio)">
    An annual percentage fee charged against a series' assets under management, accrued continuously at each NAV window. Reduces NAV per Share gradually over time. Analogous to an ETF's expense ratio or a mutual fund's management fee. Rates are configured per series and subject to change. See [Fees](/investing/fees).
  </Accordion>

  <Accordion title="Mint Fee (Front-End Load)">
    A one-time percentage fee charged on new investments at the time of minting. Deducted from the investment amount before shares are issued – the investor receives fewer shares per dollar invested. Analogous to a mutual fund front-end load. Rates are configured per series and subject to change.
  </Accordion>

  <Accordion title="Redemption Fee (Back-End Load)">
    A one-time percentage fee charged on redemption proceeds. Deducted from gross proceeds before cash is credited to the investor – the investor receives less cash per share redeemed. Analogous to a mutual fund back-end load or contingent deferred sales charge. Rates are configured per series and subject to change.
  </Accordion>

  <Accordion title="Accrued Fees">
    Management fees that have accumulated since the last fee collection. Accrued fees are subtracted in the NAV per Share calculation, reducing the per-share value. Fees accrue at each NAV window (a small fraction of the annual rate per window).
  </Accordion>

  <Accordion title="Basis Points (bps)">
    A unit of measurement equal to 1/100th of a percentage point. 100 basis points = 1%. Used in finance to express fee rates and small percentage changes with precision. For example, a management fee of 150 bps equals 1.50% annually.
  </Accordion>
</AccordionGroup>

***

## Accounting Terms

<AccordionGroup>
  <Accordion title="Double-Entry Accounting">
    An accounting system where every transaction is recorded as a balanced pair of debit and credit entries. No value is created or destroyed – every debit has a corresponding credit. This is the same system used by every professional fund administrator and is the global standard for financial record-keeping. The Belief Index ledger uses double-entry accounting for all transactions.
  </Accordion>

  <Accordion title="Ledger">
    The authoritative record of all financial transactions in the system. Every mint, redemption, fee accrual, deposit, and withdrawal is recorded as a balanced double-entry in the ledger. Finalized ledger entries are immutable – they cannot be edited or deleted. Corrections are made by adding new compensating entries.
  </Accordion>

  <Accordion title="Reconciliation">
    The process of comparing the internal ledger state (what the system believes it holds) with the on-chain state (what the custody wallet actually holds on the blockchain). If the two agree, the accounting is verified. If they disagree, there is a discrepancy that triggers investigation. See [On-Chain Verification](/trust/on-chain-verification).
  </Accordion>

  <Accordion title="Trade-Date Accounting">
    Recording transactions on the date they occur, not the date they settle. All economic truth in Belief Index is recorded at NAV window finalization, when orders are filled and shares are created or destroyed.
  </Accordion>
</AccordionGroup>