Glossary
Last updated
Last updated
A type of decentralised exchange that facilitates the exchange of assets through liquidity pools rather than conventional order books. They work by using a mathematical formula to price assets based on the amounts deposited and withdrawn from the pool through trading and liquidity provision.
An order to purchase or sell a token at a specified price or better. A buy limit order (or 'bid' order) will be executed only at the limit price or lower. A sell limit order (or 'ask' order) will be executed only at the limit price or higher.
In the context of AMMs, the party that facilitates trading by providing liquidity and acting as the counterparty to fulfill those trades. Liquidity providers contribute a supply of tokens and earn trading fees on trades executed through the pool.
In traditional financial markets, refers to a market participant who provides liquidity by continuously offering to buy or sell large quantities of a particular asset to facilitate trading in a market. See for the same in the context of Automated Market Makers.