DeFi
Decentralized finance rebuilt the pieces of a bank (lending, swapping, earning yield) as permissionless smart-contract protocols running on public blockchains. These terms explain the primitives (AMMs, liquidity pools, flash loans) and the specific risks (impermanent loss, depegs, oracle manipulation) that don't exist in traditional finance.
AMMAn automated market maker (AMM) is a DEX that prices trades against a pool of assets using a deterministic formula, rather than matching buyers and sellers v…APYAPY (annual percentage yield) is the return on an investment over a year, accounting for compounding.BridgeA bridge is a protocol that moves assets or messages between two blockchains.CEXA CEX (centralized exchange) is a company-operated crypto trading venue that takes custody of users' funds.CollateralCollateral is an asset posted to back a loan or derivative position.DEXA DEX (decentralized exchange) is a smart-contract-based venue where users trade assets without handing custody to a company.Flash LoanA flash loan is an uncollateralized DeFi loan that must be borrowed and repaid within a single transaction.Impermanent LossImpermanent loss is the opportunity cost an LP incurs when the price ratio of the pool's tokens changes.Lending ProtocolA lending protocol is a DeFi application where users deposit crypto to earn interest from borrowers.Liquid StakingLiquid staking is a DeFi primitive where users deposit a stakeable asset (ETH, SOL, ATOM) into a pool and receive a liquid token (stETH, mSOL, stATOM) that a…Liquidity PoolA liquidity pool is a smart-contract-held reserve of two (or more) tokens that traders swap against.LTVLTV (loan-to-value) is the ratio of a loan's outstanding balance to the market value of the collateral backing it.Real World AssetsReal-world assets (RWAs) are off-chain assets — US Treasuries, private credit, real estate, commodities, invoices — tokenized on public blockchains so they c…Rebase TokenA rebase token automatically adjusts every holder's balance — not the price — to maintain a target.RestakingRestaking is the practice of using staked ETH (or a liquid staking token derived from it) to secure additional protocols beyond Ethereum itself.StablecoinA stablecoin is a crypto asset designed to maintain a stable value relative to a reference asset — usually the US dollar.SwapA swap is the direct exchange of one token for another on a DEX.TVLTVL (total value locked) is the dollar value of all assets held inside a DeFi protocol's smart contracts.Wrapped TokenA wrapped token is an ERC-20 (or equivalent) representation of another asset — either a non-native crypto asset brought onto a different chain, or a native a…Yield FarmingYield farming is the practice of moving capital between DeFi protocols to earn the highest available yield — usually a combination of trading fees, lending i…