Core Concepts
GUILD
The protocol's native stable currency. GUILD is designed to be a sovereign, self-sustaining digital money backed by real assets that the protocol owns and controls.
3.Finance
A decentralized finance protocol designed to create a sovereign, stable, and self-sustaining currency called GUILD. It operates as a closed-loop economic engine.
Protocol Sovereignty
The principle that critical economic decisions are handled by hard-coded, autonomous logic rather than subjective governance votes. The system runs itself through code.
Closed-Loop Economic Engine
The self-reinforcing economic model where the protocol's revenue is continuously reinvested into its own growth and stability, creating a flywheel effect.
Unencumbered Sovereignty
The end-state goal for GUILD where all external obligations have been retired through the Exchange Window. As Aged PACT holders exchange their positions, GUILD supply remains intact but obligation density decreases. When all obligations are retired, GUILD becomes a fully unencumbered sovereign currency — backed by protocol-owned assets with no external claims.
Architecture
DeFi Trident
The core architectural framework consisting of three pillars: Composability (modular structure), Convertibility (trust and value), and Sustainability (self-perpetuating cycle).
Composability
One of the three DeFi Trident pillars. Refers to the protocol's modular and upgradeable architecture, built from specialized, interoperable components.
Convertibility
One of the three DeFi Trident pillars. Provides the foundation of trust and value for GUILD through the Settlement Pledge and Protocol-Controlled Reserve.
Sustainability
One of the three DeFi Trident pillars. Achieved through a programmed economic cycle where generated assets are automatically recycled back into the system.
Sub-Protocols
The Guild
The issuance layer of 3.Finance. Responsible for minting GUILD and managing the Arbitrage Master Node. GUILD is backed by the Vault (ETH) — not by the Treasury. The Guild's domain governance allows Creditors and PACT holders to propose changes, with VW3-weighted pause power and Legend resume authorization.
The Reserve
The policy layer of 3.Finance. Manages the Vault (Pristine ETH + AutoETH) that backs GUILD, the Distribution Engine with its five named PODs, the Settlement Pledge, and the RRC module. In the Reserve governance domain, 3Fi stakers and VW3 participants propose changes, and Legends hold veto power (not resume) — providing the strongest constitutional safeguard for monetary policy.
The Grove
The Programmable Asset Management layer of 3.Finance. A dual-purpose engine: protocol-held Treasury assets AND user deposits operate within identical mechanical frameworks. The Treasury (Grove Holding Contract) holds Protocol-Held Assets (PHA) that back 3Fi — NOT GUILD. Uses the Signal System (SELF_COMPOUND / BOOST), 3Receipts (ERC-20 claims on Parent Balances), and 3.NFTs (ERC-721 composed from multiple 3Receipts with fractal levels). Critical: Treasury PHA volatility cannot affect GUILD stability — no cross-contamination.
Stability
Settlement Pledge
A hard-coded guarantee that 1 GUILD can always be exchanged for 1 crvUSD. This is the first layer of defense and provides a firm liquidity floor.
Redirect Variable (RV)
A dynamic, automated risk-management rule that adjusts revenue allocation based on withdrawal pressure. If many people try to exit, more revenue flows to the Settlement Pledge.
Protocol-Controlled Vault
The dual-chamber reserve holding Pristine ETH and AutoETH (auto-compounding) that backs GUILD as earned, non-redeemable equity. No holder of circulating GUILD has a claim on the Vault — it is a sovereign backstop, not redeemable collateral. Distinct from the Treasury (Grove Holding Contract) which holds PHA and backs 3Fi. This separation ensures no cross-contamination between currency stability and governance equity.
Sunset Scenario
A pre-coded, hierarchical process for graceful shutdown in a worst-case scenario. Ensures creditors are protected and the system unwinds predictably.
Layered Stability Defenses
The multi-layered defense system: Settlement Pledge (constitutional floor), Redirect Variable (automated rebalancing mechanism), and Protocol-Controlled Vault (sovereign backstop). Two independent safety nets — resilience through redundancy.
Treasury (Grove Holding Contract)
The asset store within The Grove that holds Protocol-Held Assets (PHA). The Treasury backs 3Fi (governance equity) — NOT GUILD. This is the critical architectural separation: Vault (ETH) backs GUILD, Treasury (PHA) backs 3Fi. No cross-contamination — Treasury PHA volatility cannot affect GUILD stability. Two pools, two purposes, one architecture.
Legend Network
A sophisticated defense mechanism introduced in Stage 4. Legends are the most committed participants who complete a two-step activation: (1) lock PACT to secure a seat, then (2) deposit 3.NFTs to activate benefits. They become internal stability guardians, earning yield while performing defensive actions.
Legend Node
A specialized node operated by a Legend. Activation requires two steps: Step 1 is PACT Lock (securing the seat), Step 2 is 3.NFT Deposit (activating benefits). Collects yield and uses it to curtail exit demand and fortify the vault.
Fortify Mode
The Distribution Engine's priority mode when the Reserve Requirement Curve (RRC) is not met. In Fortify Mode, ETH revenue flows to the Protocol-Controlled Vault to strengthen backing before any other distributions occur.
Thrive Mode
The Distribution Engine's growth mode when the Reserve Requirement Curve (RRC) is satisfied. In Thrive Mode, ETH revenue can flow to other PODs (Developers, Creatives, Creditors, Liquidity) for ecosystem growth.
Dual-Backing Model
The mature stability model where GUILD has TWO parallel backing mechanisms: the Settlement Pledge (1:1 crvUSD floor) AND the Protocol-Controlled Vault (sovereign ETH backing). They work together, not sequentially.
Reserve Requirement Curve
A mechanism that dictates how much reserve must back GUILD at each phase. Governs automatic stage transitions based on on-chain metrics rather than subjective decisions.
Settler of Last Resort
The function of Legend-locked 3NFT yields to automatically cover any bad debt in the system over time. Because these yields are non-liquidatable, they provide a safety net against cascading failures.
Tokens
3Fi
The governance equity token of 3.Finance, backed by Treasury PHA (not Vault ETH). Staked 3Fi generates VW3 (non-transferable voting weight, 4:1 mint ratio). Unclaimed VW3 boosts Creditor POD distributions. 3Fi holders have a sunset claim on Treasury assets — but only after ALL GUILD obligations are satisfied first. Currency holders are always protected before governance equity holders.
3Pact
A non-fungible token (NFT) representing a bond-like capital commitment. Transitions from 'Adolescent' to 'Aged' state, with Aged 3Pacts representing claims on 10,000 GUILD.
Adolescent 3Pact
The initial state of a 3Pact, acquired through a single transaction of 10,000 crvUSD. 1% immediately goes to the Settlement Pledge from day one. A variable rebate (0–33%) drips back to the purchaser over 12 months. The remainder flows to the Arbitrage Master Node for PHA acquisition. Must complete a 12-month maturity period before becoming an Aged PACT.
Aged 3Pact
The matured state of a 3Pact after the 12-month maturity period. Conversion to Creditor status (minting 10,000 GUILD into the SSLP) is at the holder's discretion — not automatic. Aged PACT holders can also exchange via the Reserve Window at the prevailing internal ratio (Vault ETH / Outstanding GUILD). Startup Tokens (PRIME/ALPHA) convert 1:1 to Aged PACTs, bypassing the maturity period.
PRIME3
A finite-supply genesis instrument (1,000 total) that can be converted 1:1 into an Aged 3Pact. Used for bootstrapping the protocol.
ALPHA
A finite-supply genesis instrument (800 total) that can be converted 1:1 into an Aged 3Pact. Offered at a discount during the foundational build phase.
3Receipts
ERC-20 receipt tokens representing claims on Parent Balances within The Grove's deposit pools. Each 3Receipt tracks a user's proportional share of a specific pool. 3Receipt holders can participate in Grove domain governance (proposing strategy adjustments). Multiple 3Receipts can be composed into 3.NFTs for fractal-level asset management.
3.NFTs
ERC-721 non-fungible tokens composed from multiple 3Receipts, creating fractal-level asset positions within The Grove. 3.NFTs enable complex, multi-pool positions to be managed as a single composable unit. They can be locked into Legend Nodes (Step 2 of Legend activation) where their yields serve as Settler of Last Resort.
crvUSD
Curve's USD stablecoin, used as the trust anchor for GUILD during the bootstrap phase. The Settlement Pledge guarantees 1:1 exchange with crvUSD.
ETH (Ether)
The native cryptocurrency of Ethereum. In 3.Finance, ETH is the primary reserve asset held in the Protocol-Controlled Vault.
Startup Tokens (PRIME / ALPHA)
ERC-20 tokens that provide a special bypass path: they convert 1:1 to Aged PACTs, skipping the 12-month maturity period entirely. 100% of Startup Token proceeds flow to a multi-sig wallet, then to the GuildSwap FARM for PHA Acquisition. PRIME3 has 1,000 total supply; ALPHA has 800 total supply.
Governance
VW3 (Voting Weight)
A non-transferable voting weight token minted at a 4:1 ratio vs staked 3Fi. VW3 powers governance across all three domains: Grove (pause power on strategy proposals), Guild (pause power on spending proposals), and Reserve (no pause — Legends hold veto instead). Unclaimed VW3 does not decay — it boosts Creditor POD distributions, creating an incentive to either participate in governance or accept that your weight benefits the protocol.
Grove Interaction Governance
A governance layer allowing 3Receipts holders to participate in decisions about Deposit Pool parameters.
Guild Interaction Governance
A governance layer allowing 3Pact holders to participate in decisions about The Guild's spending parameters and budgets.
Reserve Governance
A governance layer allowing staked 3Fi holders to participate in high-level protocol decisions like asset whitelists and strategic direction.
Protocol Creditors
Holders of Aged 3Pacts who have specific entitlements within the protocol, including ETH distributions from the Creditors POD.
User-Sentiment Governance
The governance philosophy of 3.Finance where core monetary logic is immutable and governance produces recommendations only — KPI targets that nudge RRC parameters incrementally. No single entity controls the system, no majority can override constitutional mechanics. Three domains (Grove, Guild, Reserve) each have different participants, proposal rights, and constitutional safeguards. The system is designed to become progressively less necessary as the protocol matures.
Constitutional Boundaries
The immutable core rules of 3.Finance that no governance vote can override: Redirect Variable calculations, RRC mechanics, Fortify/Thrive mode transitions, Vault access restrictions, and deterministic fund allocation. These boundaries ensure the protocol's monetary policy remains autonomous and predictable.
Distribution
Distribution Engine
An autonomous module that collects protocol revenue and allocates it to Purpose-Oriented Distributors (PODs) according to programmed rules.
PODs (Purpose-Oriented Distributors)
Designated channels that receive assets from the Distribution Engine to fulfill specific functions like development, rewards, and liquidity.
Developers POD
A POD that funds ongoing development and security of the 3.Finance protocol.
Creatives POD
A POD that supports community and outreach initiatives for the 3.Finance ecosystem.
Creditors POD
A POD that rewards Protocol Creditors (Aged 3Pact holders) with ETH distributions.
Reserve Booster POD
A POD that strengthens the protocol's reserves by adding to the Protocol-Controlled Vault.
Liquidity Booster POD
A POD that supports external market liquidity for GUILD trading.
Epoch
A fixed time period during which the Distribution Engine collects and allocates revenue to the five PODs. At the end of each epoch, accumulated ETH is distributed according to the current Fortify/Thrive mode and POD allocation weights. Epochs provide predictable, regular distribution cycles.
Operations
Arbitrage Master Node (AMN)
An automated system within The Guild that identifies and acquires mispriced assets from the open market, generating revenue for the protocol.
Signals System
The programmable routing mechanism within The Grove that directs yield from deposit pools. Three signal types: SELF_COMPOUND (yield reinvested into the same pool, growing the position), BOOST (yield redirected to a different pool or strategy), and LIQUIDATION_PATH (orderly exit routing). Signals are set per-pool and execute deterministically — no governance vote required for signal execution.
Genesis Activation
The process of transitioning the protocol from a schematic to an operational state, converting external capital into the initial energy for the sustainability flywheel.
Protocol-Held Assets (PHA)
The foundational reserve that generates the system's revenue stream. The capital formation target is to fund PHA to a near-sustainable revenue state.
Single-Sided Lending Pool (SSLP)
A Stage 4 lending pool where Aged PACT holders deposit their GUILD claims. Borrowers can take loans in GUILD by posting acceptable assets, and interest flows to the Creditors (lenders).
Exchange Window
A Stage 5 feature that allows Aged 3Pact holders to trade their positions directly for ETH from the Protocol-Controlled Vault. Provides an alternative exit path for long-term stakeholders.
Harvest Cycle
The programmatic process by which The Grove collects yield from Protocol-Held Assets (PHA) and routes it to the Distribution Engine. A core component of the Programmable Asset Management system.
GuildSwap FARM
The RePeg mechanism that bootstraps the Treasury without external capital raises. Users deposit discounted derivatives (e.g., sdCRV trading below peg) at full USD face value. GUILD mints 1:1 vs USD value. 3Fi mints on a decaying distribution curve — early participants receive proportionally greater governance weight. The deposited derivatives become Protocol-Held Assets (PHA) in the Treasury, generating yield through Grove strategies.
Maturity Period
Adolescent PACTs undergo a 12-month maturity period during which the Arbitrage Master Node deploys capital for PHA acquisition. Upon maturity, the PACT becomes an Aged PACT. Conversion to Creditor status (minting 10,000 GUILD into the SSLP) is at the holder's discretion — it is not automatic. Startup Tokens (PRIME/ALPHA) bypass this maturity period with a 1:1 conversion to Aged PACTs.
Parent Balance
The primary deposit position within a Grove pool. Each depositor's Parent Balance represents their principal plus accumulated yield. 3Receipts are ERC-20 claims on Parent Balances. Parent Balances can spawn Child Balances when yield is redirected via BOOST signals.
Child Balance
A secondary balance created when yield from a Parent Balance is redirected to a different pool via a BOOST signal. Child Balances track redirected yield separately from the original deposit, enabling fractal-level asset management within The Grove.
Arbitrage Engines
Automated trading systems within the Arbitrage Master Node that deploy capital for PHA Acquisition during the PACT maturity period. They identify and execute arbitrage opportunities across DeFi markets, growing the Treasury with the proceeds.
Phases
Capital Formation Layer
Stage 3 of the 3.Finance roadmap. The deliberate bootstrap of Protocol-Held Assets (PHA) through mechanisms like GuildSwap FARM. The goal is to fund PHA to a near-sustainable revenue state.
Bootstrap Phase
The initial phase where GUILD uses crvUSD as scaffolding. The Settlement Pledge ensures 1:1 exchangeability during this period.
Self-Sovereignty Phase
The end goal where GUILD's value becomes backed by the protocol's own asset vault (ETH), reducing reliance on external stablecoins.
Stage 4: Credit Market Layer
The stage introducing a native credit market for GUILD. The SSLP and Legend Network launch together, creating a defended credit market.
Stage 5: Sovereign Ecosystem
The final stage where 3.Finance becomes a fully decentralized, self-sustaining economy. Features include open governance, the Exchange Window, and GUILD as a reserve asset for other protocols.
68 terms defined across 9 categories