Glossary
Automated Market Maker#
An automated market maker is a smart contract on Ethereum that holds on-chain liquidity reserves. Users can trade against these reserves at prices set by an automated market making formula.
Asset#
While a digital asset can take many forms, the Uniswap Protocol deals in ERC-20 token pairs, and represents a position in the form of an NFT (ERC-721).
Concentrated Liquidity#
Liquidity that is allocated within a determined price boundary.
Constant Product Formula#
The automated market making algorithm used by Uniswap.
Core#
Smart contracts that are essential for Uniswap to exist. Upgrading to a new version of core would require a liquidity migration.
ERC20#
ERC20 tokens are fungibile tokens on Ethereum. Uniswap supports all standard ERC20 implementations.
Factory#
A smart contract that deploys a unique smart contract for any ERC20/ERC20 trading pair.
Flash Swap#
A trade that uses the tokens purchased before paying for them.
Invariant#
The “k” value in the constant product formula X*Y=K
Liquidity Provider / "LP"#
A liquidity provider is someone who deposits an equivalent value of two ERC20 tokens into the liquidity pool within a pair. Liquidity providers take on price risk and are compensated with fees.
Liquidity#
A digital asset that is available for swapping, and is stored in a uniswap pair.
Mid Price#
The price between what users can buy and sell tokens at a given moment. In Uniswap this is the ratio of the two ERC20 token reserves.
Observation#
An instance of historical price and liquidity data of a given pair
Pair#
A smart contract deployed from a Uniswap V1 or V2 factory contract that enables trading between two ERC20 tokens. Pair contracts are now called Pools in V3.
Periphery#
External smart contracts that are useful, but not required for Uniswap to exist. New periphery contracts can always be deployed without migrating liquidity.
Pool#
A contract deployed by the V3 factory that pairs two ERC-20 assets. A pool can have multiple feels, and thus multiple instances. Pools were previously called Pairs before the introduction of multiple fee options.
Position#
An instance of liquidity concentrated into a smaller price interval.
Price Impact#
The difference between the mid-price and the execution price of a trade.
Protocol Fees#
Fees that are rewarded to the protocol itself, rather than to liquidity providers.
Range#
Any interval between two ticks of any disance.
Range Order#
An approximation of a limit order, in which a single asset is provided as liquidity across a specified range, and is continuously swapped to the desination address as the spot price crosses the range.
Reserves#
The liquidity available within a pair, demoninated in a single token. This was more commonly referenced before concentrated liquidity was introduced.
Slippage#
The amount the price moves in a trading pair between when a transaction is submitted and when it is executed.
Spot Price#
The current price of a token relative to another within a given pair.
Swap Fees#
The fees collected upon swapping which are rewarded to liquidity providers.
Tick Interval#
The price space between two nearest ticks.
Tick#
The boundaries between discreet areas in price space.