Annual percentage rate. Simple yearly return without compounding.

Annual percentage yield. Yearly return assuming rewards are compounded.

A pool formula that prices trades from balances instead of a human order book. Constant-product is the classic form.

Debt that remains after collateral is sold, socialized onto a protocol, insurance fund, or other users.

Taking a loan against locked collateral. Interest accrues until you repay or get liquidated.

Assets locked to back a loan or a minted stablecoin. If the value falls too far, the position is liquidated.

The x * y = k rule used by Uniswap v2-style pools. Larger trades pay a steeper price.

Permission for another address to borrow against borrowing capacity provided by a collateralized account, subject to the lending protocol's rules.

A decentralized autonomous organization. On-chain votes steer a treasury and parameters, with very uneven real-world standing.

Decentralized finance. Lending, trading, and derivatives run by contracts instead of a single broker.

An uncollateralized loan that must be borrowed and repaid inside the same transaction, used for arb and liquidations.

Seeing a pending transaction and inserting your own ahead of it for profit.

A discount applied to collateral value so a protocol or desk has a buffer against a sudden print.

The value shortfall of a liquidity position relative to holding its original assets when relative prices change; the shortfall can exist before withdrawal and may persist.

A market where depositors earn interest and borrowers post collateral to take a loan.

Additional collateral a liquidator may receive when repaying an unhealthy loan, intended to make liquidation economically worthwhile.

A smart-contract reserve of two or more tokens that enables automated trading and earns fees for depositors.

Loan to value. Debt divided by collateral. DeFi liquidations fire when LTV exceeds a threshold.

Maximal extractable value. Profit from choosing the order of transactions in a block, including arb and sandwiches.

A service that brings off-chain data (prices, scores, randomness) onto a chain in a form contracts can read.

A configured update interval that can trigger a price feed report even when the observed price has not crossed its deviation threshold.

A feed that tells contracts the reference price of an asset. Bad oracles cause bad liquidations.