> For the complete documentation index, see [llms.txt](https://lsteak-protocol.gitbook.io/lsteak-protocol-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lsteak-protocol.gitbook.io/lsteak-protocol-docs/technical-appendix/section-a-definitions-and-accounting-glossary.md).

# Section A — Definitions & Accounting Glossary

**Version:** v1.1

This section defines all terms, accounting constructs, and system concepts used throughout the LSteak and LSaaS documentation.

All definitions in this section are normative.

If a term is defined here, this definition prevails over any other usage.

If a term is not defined here, it has no special protocol meaning beyond ordinary-language interpretation.

Next: [Section B — Immutable Protocol Invariants](/lsteak-protocol-docs/technical-appendix/section-b-immutable-protocol-invariants.md)

### Contents

* [A.1 Core assets & tokens](#a1-core-assets--tokens)
* [A.2 Supply & accounting concepts](#a2-supply--accounting-concepts)
* [A.3 Backing & valuation](#a3-backing--valuation)
* [A.4 LSaaS structures](#a4-lsaas-structures)
* [A.5 Yield & engines](#a5-yield--engines)
* [A.6 Redemption & ratios](#a6-redemption--ratios)
* [A.7 Transactions & flows](#a7-transactions--flows)
* [A.8 Governance & activation](#a8-governance--activation)
* [A.9 Scope terms](#a9-scope-terms)
* [A.10 Interpretive rule](#a10-interpretive-rule)

### A.1 Core assets & tokens

#### LSTEAK

The primary protocol token representing a claim on backing held by the LSteak system, subject to protocol rules.

LSTEAK is:

* non-rebasing
* emissionless
* minted only via defined protocol mechanisms

#### xl-LSTEAK

A derivative token representing a proportional redemption claim against LSTEAK under the xl-LSTEAK redemption model.

xl-LSTEAK:

* does not rebase
* redeems directly via dApp
* does not directly alter LSteak backing

#### Partner token

A third-party token onboarded into LSaaS as an underlying asset for yield generation and deterministic redemption via an `xl-*` token.

Examples include eSHARE, Plazm, or other approved assets.

#### xl-Partner token

A derivative token representing a redemption claim against partner-token holdings managed by LSaaS.

Redemption behavior is governed by the Redemption Ratio (RR).

### A.2 Supply & accounting concepts

#### Circulating supply

The quantity of a token that is transferable and held outside protocol-restricted contracts.

Circulating supply excludes:

* LSaaS accounting balances
* protocol-owned liquidity placeholders
* non-redeemable accounting representations

#### Effective supply

The supply quantity used in economic calculations such as Backing Per Token (BPT).

Effective supply equals:

* total minted supply
* minus non-circulating, non-redeemable accounting balances
* minus protocol placeholders not representing redemption claims
* minus pre-launch minted tokens explicitly designated for burn and removed via protocol burn mechanisms

**Clarifications**

* Pre-launch minted tokens (e.g. bootstrap bonuses):
  * are included in total minted supply at creation
  * are explicitly designated for burn
  * are removed from effective supply calculations as they are burned
* These tokens:
  * do not represent persistent redemption claims
  * do not permanently inflate effective supply
* Any LSTEAK minted via LSaaS flows is standard LSTEAK supply.
  * It counts toward effective supply.
  * It counts toward BPT.

Effective supply reflects only active redemption claims.

#### Accounting LSTEAK

A non-circulating, non-redeemable accounting representation of LSTEAK used only for internal balancing (if present).

LSaaS does not rely on accounting LSTEAK in the Queue-based architecture.

Accounting LSTEAK:

* is always valued at BPT
* is excluded from circulating and effective supply
* has no market presence
* may be burned without economic effect

#### Burn

The permanent removal of a token from existence.

Burns may be:

* economic (affecting circulating or effective supply), or
* accounting (affecting accounting-only balances)

Unless explicitly stated otherwise, burns of accounting LSTEAK are accounting-only.

### A.3 Backing & valuation

#### Backing

The aggregate value of assets designated as backing for LSteak, held within protocol-controlled systems.

Backing consists only of:

* bond allocations
* hedge allocations (LSteak Core only)

Treasury balances are not backing.

#### Backing Per Token (BPT)

The value of backing allocated per unit of effective LSTEAK supply.

Formally:

`BPT = Total Backing ÷ Effective Supply`

BPT is the reference value for:

* minting
* accounting LSTEAK valuation
* guardrail enforcement

#### Treasury skim

A fixed percentage of value extracted from defined protocol flows and routed to the treasury.

Unless otherwise stated, the treasury skim is `5%` fixed.

### A.4 LSaaS structures

#### xl backing

Partner tokens held inside the `xl-*` token contract as backing for deterministic redemption.

#### VTL Queue

Partner tokens held in the **VTL Queue**.

Queued tokens are fully included in Redemption Ratio (RR) accounting.

#### Value Transfer Loop (VTL)

A fixed, contract-contained sequence that:

* sells partner token → ETH
* mints LSTEAK at core BPT (no treasury skim)
* allocates capital into the Partner Yield Engine (PYE) at the core bond/hedge ratio
* sells LSTEAK → partner token
* deposits partner tokens into xl backing

VTL execution is pre-simulated and atomic.

#### Queue drip

An internal process that periodically attempts a VTL using tokens from the Queue.

Queue drip reduces `Q` and increases `B` without minting any `xl-*`.

`Q + B` is unchanged, so RR is unchanged.

### A.5 Yield & engines

#### Partner Yield Engine (PYE)

A deterministic yield-generation system associated with an LSaaS partner.

PYE:

* receives value routed from LSaaS mechanisms
* is allocated at the same bond/hedge ratio as the LSteak core
* increases backing but does not mint tokens directly

#### Yield

Value generated by protocol-managed assets through yield-producing mechanisms.

Yield may be allocated to:

* backing growth
* VTL Queue reduction
* burns
* treasury

### A.6 Redemption & ratios

#### Redemption Ratio (RR)

The ratio defining the redemption value of an xl-token relative to its underlying asset.

For xl-partner tokens:

`RR = (Partner tokens in Queue + partner tokens in xl-contract) ÷ xl-token supply`

RR:

* increases only via explicit RR mechanisms
* is unaffected by movement between Queue and xl backing
* is unaffected by accounting burns

#### Best-execution redemption

A routing process that selects the most favorable outcome between:

* contract-based redemption, or
* market-based execution

xl-LSTEAK redemption is contract-only, because there is no xl market route in v1.

### A.7 Transactions & flows

#### External entry

A transaction initiated by a user depositing value into the protocol.

#### Internal transaction

A protocol-initiated action that does not originate from a user deposit.

Internal transactions:

* do not apply treasury skim
* may use normalized allocations

#### Value-transfer loop

A controlled sequence of operations used to move value between protocol components.

Value-transfer loops are subject to:

* global BPT guardrails
* execution limits

#### Guardrail

A hard, non-discretionary constraint that prevents protocol actions from exceeding defined economic or accounting limits.

### A.8 Governance & activation

#### Dormant parameter

A parameter that is defined but inactive until a specific system component is deployed and activated.

Dormant parameters:

* are immutable while dormant
* cannot be partially enabled

#### Activation

The explicit governance action that enables dormant parameters by deploying and enabling the associated system component.

### A.9 Scope terms

#### LSteak Core

The base protocol deployed at initial launch, excluding LSaaS functionality.

#### LSaaS (Liquid Staking as a Service)

A post-launch extension framework that enables partner-token onboarding, deterministic `xl-*` issuance, and partner-specific yield engines.

### A.10 Interpretive rule

If ambiguity exists between:

* ordinary-language meaning, and
* a definition in this section,

the definition in this section prevails.

***

Next: [Section B — Immutable Protocol Invariants](/lsteak-protocol-docs/technical-appendix/section-b-immutable-protocol-invariants.md)