📕Glossary

Automated Market Makers (AMMs) - Smart contracts that allow users to trade assets in a non-custodial and peer to peer manner, using liquidity pools and liquidity providers!

Liquidity Providing - Liquidity providing means being a Market Maker on Decentralized Exchanges, earning trading fees by providing capital to the liquidity pool!

Decentralized Exchanges (DEXs) - A particular type of non-custodial Cryptocurrency Exchange where users trade assets thanks to different smart contracts and pools. Examples could be Uniswap, Sushiswap, Spookyswap etc etc.

Impermanent Loss (IL) - The Opportunity cost that Liquidity Providers might encounter if one of two assets they are LPing changes in price a lot compared to the other! Read more about IL here. Slippage - Slippage, in simple terms, is the loss that can occur as other swaps of these tokens take place during the processing of your transaction. To help avoid slippage you can set your gas price higher.

Total Value Locked (TVL) - Dollar Value of all the assets deposited in a particular smart contract or pool.

Annualized Percentage Rate (APR) - The percentage by which users can expect their token investment to grow in one year, not taking into account the possible compounding factor.

Return On Investment (ROI) - Similar to the APR, the ROI is a popular profitability metric used to evaluate how well an investment has or will be performing over a particular period of time.

LP Tokens - Tokens that are received from the decentralized exchange once users deposits capital in order to become liquidity providers. Different Pairs on different DEXs have different LP tokens.