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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.

Constant product formula#

The automated market making algorithm used by Quickswap. See x*y=k.

ERC20#

ERC20 tokens are fungibile tokens on Ethereum and Polygon. Quickswap supports all standard ERC20 implementations.

Factory#

A smart contract that deploys a unique smart contract for any ERC20/ERC20 trading pair.

Pair#

A smart contract deployed from the Quickswap V2 Factory that enables trading between two ERC20 tokens.

Pool#

Liquidity within a pair is pooled across all liquidity providers.

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.

Mid price#

The price between what users can buy and sell tokens at a given moment. In Quickswap this is the ratio of the two ERC20 token reserves.

Price impact#

The difference between the mid-price and the execution price of a trade.

Slippage#

The amount the price moves in a trading pair between when a transaction is submitted and when it is executed.

Core#

Smart contracts that are essential for Quickswap to exist. Upgrading to a new version of core would require a liquidity migration.

Periphery#

External smart contracts that are useful, but not required for Quickswap to exist. New periphery contracts can always be deployed without migrating liquidity.

Flash swap#

A trade that uses the tokens being purchased before paying for them.

x * y = k#

The constant product formula.

Invariant#

The "k" value in the constant product formula