📖 Glossary

Automated Market Maker / "AMM"

An Automated Market Maker (AMM) is a decentralized exchange mechanism that uses liquidity pools and mathematical formulas to determine the price of assets, enabling trades without a traditional order book or intermediaries. Liquidity is provided by users, who earn fees in return.

Liquidity Provider / "LP"

A liquidity provider is someone who deposits assets into a liquidity pool. Liquidity providers take on price risk and are compensated with trading fees.

Liquidity

Digital assets that are stored in a Crouton.finance pool contract, and are able to be traded against by traders.

Pair

A smart contract deployed from a Crouton.finance that enables trading between two or more assets.

Pool

A contract deployed by the Crouton.finance protocol that pairs two assets.

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.

Swap Fees

Fees collected upon swapping which are rewarded to liquidity providers.

Slippage

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