Distinguish between Horizontal and Vertical Commonality.
Horizontal commonality requires a pooling of investors' assets and a pro-rata sharing of profits and losses among all investors. It focuses on the relationship among the investors.
Vertical commonality, however, focuses on the relationship between the investor and the promoter. Strict vertical commonality means the investor's profit is directly dependent on the promoter's success.
Broad vertical commonality means the investor's profit is dependent on the promoter's efforts.
Glossar
Broad Vertical Commonality
Convergence ⎊ Broad Vertical Commonality, within cryptocurrency derivatives, signifies the increasing correlation of price movements across disparate asset classes ⎊ equities, fixed income, commodities ⎊ driven by macroeconomic factors and systemic risk transmission.
Strict Vertical Commonality
Application ⎊ Strict Vertical Commonality, within cryptocurrency derivatives, denotes a specific pricing relationship observed across different strike prices for options with a common expiration date, reflecting a consistent implied volatility skew.
Token Price Appreciation
Valuation ⎊ Token price appreciation, within cryptocurrency markets, represents an increase in the perceived economic value of a digital asset, often driven by shifts in supply and demand dynamics or evolving market sentiment.