Terminology
Last updated
Last updated
This glossary serves as a comprehensive reference to key terms and concepts critical to understanding the xSwap protocol and its place within the decentralized finance (DeFi) ecosystem. It aims to provide clarity and enhance the user experience for liquidity providers, traders, developers, and anyone interacting with the xSwap documentation.
Reflects the simple interest rate over a year, indicating the potential earnings on an investment without factoring in compounding.
Denotes the real rate of return on an investment, taking into account the effect of compounding interest.
A decentralized exchange mechanism that uses a mathematical formula to determine asset prices, eliminating the need for traditional order books.
The automated market making algorithm used by xSwap
x * y = k
The foundational smart contracts of the xSwap protocol that ensure its operation, security, and integrity.
A peer-to-peer marketplace that facilitates cryptocurrency trading directly between users without the need for a central authority.
The standard for creating fungible tokens on the Ethereum blockchain, supported by xSwap for all compliant implementations.
The xSwap smart contract responsible for creating unique contracts for each ERC-20/ERC-20 trading pair.
Impermanent loss is the potential loss liquidity providers in automated market makers might face when the prices of their deposited assets change. While this loss can be significant, particularly in volatile markets, it is often offset by transaction fees earned from trades within the pool.
Refers to the ease with which an asset can be quickly bought or sold in the market without affecting its price significantly.
A collection of funds locked in a smart contract that provides liquidity for trading pairs on AMM platforms.
An individual or entity that deposits assets into a liquidity pool to facilitate trading and earn transaction fees in return.
A specific smart contract on xSwap that enables trading between two distinct ERC-20 tokens, created by the Factory contract.
Supporting smart contracts that provide user-friendly interfaces and additional functionalities to interact with the core contracts of xSwap.
The variation in price resulting from a trade, influenced by the trade's size relative to the pool's total liquidity.
The discrepancy between the expected price of a trade and the actual executed price, often occurring in volatile or low-liquidity markets.
The action of exchanging one cryptocurrency for another within an AMM, determined by the liquidity pool's pricing mechanism.
A metric indicating the total amount of assets staked, lent, or deposited within a particular DeFi protocol, reflecting its overall scale and usage.