Glossary

All things DeFi and security in plain English. Our glossary breaks down complex terms and concepts into relatable language, making it easier for you to grasp the essentials of blockchain security.

All Terms

A

Active Liquidity

Liquidity within a position's price range that is currently being used for trades and earning fees.

Automated Market Maker (AMM)

A decentralized exchange protocol that uses mathematical formulas to price assets instead of order books.

C

Concentrated Liquidity

A liquidity provision model where LPs can specify custom price ranges for their capital.

Constant Product Formula

The mathematical formula (x · y = k) that governs automated market makers, maintaining a constant product of token reserves.

Core/Periphery Architecture

A design pattern separating immutable fund-holding contracts (core) from upgradeable user-facing contracts (periphery).

F

Factory Contract

A smart contract that deploys and manages exchange contracts, serving as a registry for decentralized exchange pools.

Fee Tiers

Multiple fee levels (0.05%, 0.30%, 1.00%) per token pair in Uniswap v3 to accommodate different risk profiles.

Fee-on-Transfer Tokens

ERC20 tokens that deduct a fee during transfers, causing integration issues with protocols that assume full amounts are received.

Flash Accounting

A gas optimization technique that tracks balance deltas during a transaction and only settles the final net amount.

Flash Swaps

A Uniswap v2 feature allowing users to borrow any amount of tokens at no upfront cost, perform arbitrary actions, and repay within the same transaction.

Front-running

The practice of observing pending transactions and submitting similar transactions with higher gas fees to execute first, extracting value.

H

Hooks

External smart contracts in Uniswap v4 that execute custom logic at specific points in a pool's lifecycle.

I

Impermanent Loss

The temporary loss in value experienced by liquidity providers when the price ratio of deposited assets changes compared to holding them.

J

JIT Liquidity Attack

A v3-specific MEV attack where attackers add liquidity just before large swaps to capture fees with minimal risk.

L

Liquidity Provider (LP)

A user who deposits assets into a liquidity pool to facilitate trading, earning fees in return.

M

MEV (Maximal Extractable Value)

Profit extracted by reordering, including, or excluding transactions within a block.

N

NFT LP Positions

ERC-721 non-fungible tokens representing unique concentrated liquidity positions in Uniswap v3.

P

Price Oracle Manipulation

An attack where an attacker artificially skews the price reported by a price oracle to exploit protocols that rely on it.

R

Reentrancy Attack

A vulnerability where external calls allow malicious contracts to recursively call back before state updates complete.

S

Sandwich Attack

An MEV attack where an attacker front-runs and back-runs a victim's trade to extract profit from the induced price movement.

Singleton Architecture

A design pattern where all pools are managed within a single unified contract, reducing gas costs.

Slippage

The difference between the expected price of a trade and the actual execution price, caused by market movement or liquidity constraints.

sqrtPriceX96

Fixed-point number format used in Uniswap v3 representing the square root of price multiplied by 2^96.

T

Ticks

Discrete price points in Uniswap v3 that define boundaries for concentrated liquidity positions.

TWAP Oracle

Time-Weighted Average Price oracle that accumulates prices over time to provide manipulation-resistant price feeds.

W

WETH

Wrapped ETH - an ERC20-compliant token representing ETH, necessary for standard token operations in protocols.

Can't find what you're looking for?

We're constantly expanding our glossary. If you need clarification on a specific term, feel free to reach out.