Glossary
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
An automated market maker is a smart contract that prices assets with a formula instead of an order book. Uniswap popularised the constant product model, where the product of the two reserves stays fixed.
That formula is why AMMs always quote a price, even for tokens nobody is trading. It is also the source of impermanent loss: the pool rebalances automatically as prices move, so you end up holding more of the asset that fell.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.
Block Explorer
A site for viewing every transaction, wallet and contract on a blockchain.