Glossary
The vocabulary of this trade, in plain terms
Physical commodity trading runs on abbreviations that are used inconsistently and defined almost nowhere. These are the ones that matter — what each actually means, and what it means on Nelum where that differs.
The instruments
The documents this trade opens with. Both are pre-contractual, and confusing either for a binding agreement is a common and expensive mistake.
- Letter of IntentLOI
A buyer's written statement of what they want to buy and on what terms — quantity, purity, delivery, price basis. It is an invitation to treat, not an offer capable of acceptance, and it binds nobody.
Posting demand creates an LOI on the board. It carries an expiry and leaves the marketplace automatically when it lapses. You can attach a signed PDF and the platform reads the terms out of it to fill the form.
For buyers →- Soft Corporate OfferSCO
A seller's written statement of what they hold and the terms they would sell it on. 'Soft' is the operative word: it is indicative, and it does not commit the seller to perform.
Posting supply creates an SCO. It is the same object as an LOI pointed the other way, and either side can answer the other's.
For sellers →- Full Corporate OfferFCO
A firm offer capable of acceptance, as distinct from an SCO. In practice the term is used loosely across this market, and a document titled FCO frequently is not one.
- Sale and Purchase AgreementSPA
The binding contract between buyer and seller covering quantity, quality, price mechanism, delivery, assay tolerance, title and payment.
Nelum does not draft your SPA and captures no signature — it is not a party to your trade. What it does is freeze the terms you accepted, unedited, for you to carry into your own agreement.
How it works →- Proof of fundsPOF
Evidence that a buyer can pay — typically a bank comfort letter or statement. Routinely requested, routinely forged, and rarely verifiable by the party receiving it.
Requested and filed on the order like any other document, with the request, the reason and the answer all on the record.
The audit trail →
The material
What is actually being traded, and the words that decide what it is worth.
- Doré
A semi-pure alloy of gold and silver, cast into bars at or near the mine site. It is unrefined by definition — typically 60–95% precious metal — and its exact content is the entire commercial question.
One of the commodity types on the board, and the market the platform was built for first. It is not the only one.
- Assay
The analytical determination of precious-metal content in a sample. Pre-shipment assays establish what is being sent; outturn assays at the refinery establish what arrived, and the difference between them is where trades break down.
An independent laboratory can be engaged on the order. Mutual engagements need both parties to accept the provider, and the laboratory sees the physical facts and never the commercial terms.
For service providers →- Fineness / purity
The proportion of precious metal in the material, expressed in parts per thousand (999.9) or as a percentage. For doré it is an estimate until assayed.
Stated as a minimum on an intent, and treated as a floor. An offer above the stated minimum is a better offer, and the platform shows the difference rather than scoring it.
- ASMArtisanal and small-scale mining
Mining by individuals, groups or cooperatives using low mechanisation. It accounts for a substantial share of global gold production and the great majority of the people employed in mining.
A first-class participant. Verification is the same check for a two-person cooperative as for a refining group, which is the point.
For miners & cooperatives →- 3T minerals
Tin, tantalum and tungsten — the minerals most associated with conflict financing in the Great Lakes region, and covered alongside gold by most responsible-sourcing frameworks.
All three trade on the board alongside precious metals and petroleum.
Price and terms
How value is expressed in a market where almost nothing trades at a published screen price.
- Benchmark discount
A price expressed as a percentage below a named reference — 'LBMA PM less 3.5%' — rather than as an absolute figure. This is how most doré and much petroleum actually prices, because the reference moves and the deal terms should not have to.
Recorded as a term of the deal. Nelum carries no price feed and quotes nothing: the cash figure is agreed between the parties on the SPA.
Pricing →- LBMA AM / PM
The London Bullion Market Association gold price, set twice daily. The most common reference for precious-metal contracts.
- Platts / Argus
Price reporting agencies whose published assessments are widely used as references in petroleum contracts, in the same way LBMA is used for bullion.
- Incoterms
Standard trade terms — CIF, FOB, EXW and others — allocating cost, risk and responsibility for delivery between buyer and seller. They decide who bears a loss in transit.
- Letter of creditL/C, documentary credit
A bank undertaking to pay the seller against presentation of specified documents. Widely used because it substitutes a bank's credit for a counterparty's.
Arranged with your own banks, as it always was. The advice can be filed against the order so both parties can see it, but Nelum is not a party to the instrument.
Authority and identity
Who is allowed to speak for whom — the question behind most failed trades in this market.
- Mandate
Authority granted by a company to a person or agency to act on its behalf. The word is used so loosely in this trade that producing one now counts against you.
A live record rather than a PDF: granted by the principal, scoped to introduce only, negotiate, or negotiate and sign, with a territory and an expiry, and revocable at any time.
For agents →- KYBKnow Your Business
Verification of a company: incorporation, registered address, ownership and control including beneficial owners, and the licences it holds.
Mandatory before a company can post an intent, offer, or accept one. Enforced in the database rather than by a warning on a screen.
Our compliance approach →- KYCKnow Your Customer
Verification of an individual's identity — here, the person authorised to act for a verified company.
Each representative is identity-checked with a verified mobile number, and receives a credential tied to their company that a counterparty can check on a phone.
- Beneficial ownerUBO
The natural person who ultimately owns or controls a company, regardless of how many entities sit between them and it. Identifying them is the core of anti-money-laundering diligence.
- PEPPolitically Exposed Person
Someone entrusted with a prominent public function, and their close associates and family. Not a prohibition — a trigger for enhanced diligence.
Compliance and provenance
The frameworks that decide whether a refinery can accept your material, and on what evidence.
- OECD Due Diligence Guidance
The five-step risk-based framework for responsible mineral supply chains from conflict-affected and high-risk areas. The reference standard behind most downstream sourcing policies.
Records stay per order, never pooled across sources — merged lot records defeat the traceability the framework requires.
OECD due diligence →- CAHRAConflict-Affected and High-Risk Area
A region identified by armed conflict, widespread violence or other risks of harm to people. Sourcing from one is not prohibited; it triggers enhanced due diligence.
- CRAFT
The Code of Risk-mitigation for ASM engaging in Formal Trade. A progressive standard that allows buyers to engage with artisanal producers while improvement is under way, rather than requiring compliance as a precondition.
Directly relevant to the free tier: a producer improving over time needs a record of what was documented and when, and that record is not a paid feature.
For miners & cooperatives →- Chain of custody
The documented sequence of parties who held material from origin to refinery. It is what allows a refiner to state where an intake came from, and its value collapses if any link is undocumented.
Each order keeps its own record. Where one requirement is filled from several producers, each fill is its own order with its own separate chain.
The audit trail →- Sanctions screening
Checking a company, its owners and its representatives against sanctions and enforcement lists. A match blocks trading rather than merely flagging it.
Run at verification and maintained afterwards. A company under review or blocked cannot trade — enforced by the database.
On the platform
Words that mean something specific here, and should not be assumed.
- Intent
The umbrella term for a demand (LOI) or a supply (SCO) posted to the board. One object, two directions.
- Order
What exists after an offer is accepted: a contracted relationship between two companies, with its own document space, message thread and delivery schedule.
Not a stepped workflow. There is no imposed sequence after the order opens, and it completes only when both parties confirm fulfilment.
How it works →- Release order
One scheduled delivery inside a recurring contract. A twelve-month agreement is twelve of them.
Materialised in full when the order opens, so the whole commitment is visible from day one and a period nobody acted on shows as overdue.
- Private opportunity
An intent sent to named connections instead of published to the board.
Visible only to the companies named on it. That restriction is enforced in the database, so a direct link cannot bypass it.
- Connection degree
How far a counterparty is from you through the network — connected, second degree, or not connected.
Filterable on the board. Second degree matters: it is the difference between a cold approach and an introduction.
- Non-custodial settlement
Settlement where the funds never leave the control of the parties. Distinct from escrow, which in law implies a stakeholder holding them.
Where parties settle on-chain, the wallet is the buyer's own and Nelum's role is read-only verification. We hold nothing and can move nothing.
Security & data →
Trade with people who use these words the same way
Register your company, complete verification, and deal with counterparties who have done the same.