Educational content, not investment advice. Crypto-asset values fluctuate.

DeFi glossary

142 terms — from AMM to Yield. Each with a short explanation and, where the lesson already exists in English, a link to it.

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2

2FA — Two-factor authentication (password plus a code from an app). Use an app, not SMS.

A

Aave — Ethereum lending protocol (v3). In our strategy: ETH collateral to a USDC loan.
AML — Anti-Money Laundering — procedures used by banks and exchanges to combat money laundering.
AMM — Automated Market Maker — an algorithm that lets tokens be swapped without an order book. Prices are set by a formula.
Lesson →
Approval — Permission you grant a protocol to use tokens from your wallet. Review it periodically.
APR — Annual Percentage Rate — the annual interest rate WITHOUT compounding. 10% APR = +10% per year.
APY — Annual Percentage Yield — the annual interest rate WITH compounding. Always higher than the equivalent APR.
Arbitrum — An Ethereum Layer 2 network. Cheaper and faster transactions than Ethereum mainnet.
Assignment — When the buyer of a sold option exercises their right, and the seller must fulfil the resulting obligation.
ATM — At The Money — an option whose strike sits at the current price.
Audit — An independent security review of smart-contract code. Not a guarantee, but it reduces risk.

B

Backtesting — Testing a strategy against historical price data.
Bin Step — The price step (in percent) between adjacent bins in Meteora's DLMM model.
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Blockchain — A public digital ledger maintained by many computers, which cannot be secretly altered.
Borrow — Taking a loan in a DeFi protocol against deposited collateral.
Breakeven — The breakeven point — the price at which a position is neither profitable nor at a loss.
Bridge — A protocol that lets assets move from one blockchain to another. Historically the riskiest part of DeFi.
BUIDL — BlackRock's tokenized treasury fund — the largest tokenized Treasury product.

C

Call — An option type that grants the right to BUY at the strike price. The opposite of a put.
CEX — Centralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.
Collar — An options strategy: long put + short call + the underlying asset held. Caps both potential loss and potential gain.
Collateral — The asset you deposit in order to borrow. In DeFi this is typically crypto (SOL, ETH).
Composability — The DeFi "Lego" property — a token can be used as collateral, in an LP, and so on.
Compounding — Interest on interest — reinvested earnings themselves start generating further returns.
Lesson →
Concentrated Liquidity — Providing liquidity within a specific price range instead of from 0 to infinity. Uses capital more efficiently.
Lesson →
Coverage Ratio — Coverage ratio — LP fees divided by daily costs. Above 1 means fee income covers costs.
Covered Call — An options strategy: sell a call option while holding the underlying asset. Generates premium income but caps upside.
Custodian — A licensed custodian that physically holds the real asset backing a token.

D

Daily Carry — Net daily result: LP fees minus theta minus debt cost.
DCA — Dollar Cost Averaging — buying a fixed amount at regular intervals, smoothing out the average purchase price.
DeFi — Decentralized Finance — financial services without intermediaries, operating through smart contracts.
Delta — An option's price sensitivity to the underlying price. Delta 0.50 means: if the underlying rises $1, the option price rises about $0.50.
Depeg — When a stablecoin loses its pegged value ($1). E.g. the UST/LUNA collapse in 2022.
Deribit — A crypto options exchange. In our strategy this is where we buy put protection and sell covered calls.
DEX — Decentralized Exchange — a decentralized exchange (e.g. Jupiter, Orca, Uniswap). No KYC required.
DLMM — Dynamic Liquidity Market Maker — Meteora's bin-based model with dynamic fees.
Lesson →
Drawdown — The largest decline from a peak to a trough.
DTE — Days To Expiry — the number of days left until an option expires.

E

E-Mode — Aave's efficiency mode — a higher LTV for assets in the same category.
Ethereum — A blockchain with smart contracts. We use Aave (lending) and Uniswap (LP) on it.
Exit — Exiting — closing a position and locking in the profit or loss.
Expiry — An option's expiration date.

F

Fee Tier — The fee level in an LP pool. E.g. Orca: 0.01%, 0.05%, 0.30%. Uniswap: 0.05%, 0.30%, 1.00%.
Lesson →
Fiat — Traditional government-issued currency (EUR, USD) — as opposed to crypto.
FIFO — First In, First Out — a tax-accounting method: the first units bought are treated as the first sold.
Funding Rate — A periodic payment (often every 8 hours) exchanged between long and short perpetual futures positions.
Futures — A contract betting on price direction (often with leverage) without owning the underlying asset. Risky for beginners.

G

Gamma — The rate of change of delta. High gamma means delta shifts quickly as the price moves.
Gas — The transaction fee on a blockchain. Solana: under $0.01. Ethereum mainnet: transfer ~$0.01, swap ~$0.03-0.30. Varies with network load.
GPM — GPM — Lithuanian personal income tax; 15% on realised crypto gains.

H

Halving — A roughly every-4-years event that cuts Bitcoin's mining reward in half.
Hardware Wallet — A physical device (e.g. Ledger) that stores private keys offline, separate from the internet.
Health Factor — A Kamino/Aave position's safety indicator — the closer it is to 1, the closer to liquidation.
Hedge — Protection against losses. In our strategy: put options and put spreads.
Hook — A programmable add-on for a Uniswap V4 pool — custom logic that runs before or after a trade.
Lesson →

I

Impermanent Loss — A loss in an LP position caused by price changes relative to holding the assets. Called "impermanent" because it can recover if the price returns to its starting level.
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Intrinsic Value — Intrinsic value — what an option is worth right now, excluding time value.
Issuer — A regulated company that holds the real asset and issues the token representing it.
ITM — In The Money — an option that has intrinsic value.
IV — Implied Volatility — the volatility the market expects. SOL IV is roughly 70-80%.
IV Crush — A sharp drop in IV (implied volatility) after a known event — it lowers the option's value.

J

Jupiter Wallet — The main Solana wallet used in this course. Holds SOL, USDC and SPL tokens, with a built-in swap feature. MetaMask is used for the Ethereum side.

K

Kamino — Solana lending protocol. In our strategy: SOL collateral to a USDC loan.
KYC — Know Your Customer — the identity-verification process on exchanges. Requires a passport or ID.

L

Layer 2 — A second layer built on top of a base blockchain. Arbitrum and Optimism offer cheaper Ethereum transactions.
Lending — Lending/borrowing in DeFi. You deposit collateral and receive a loan in stablecoins.
Leverage — Borrowed funds that proportionally magnify both gains and losses.
Limit Order — An order that only executes once the price reaches the level you specified.
Liquidation — When LTV exceeds the threshold and the protocol automatically sells your collateral to cover the debt.
Looping — Recursive borrowing — borrow, deposit again as collateral, borrow again. Increases leverage and risk.
LP — Liquidity Provider — deposits tokens into a pool and earns a share of trading fees.
Lesson →
LTV — Loan-to-Value — the ratio of debt to collateral value. LTV 30% is considered safe. LTV 71%+ triggers liquidation.

M

Mainnet — The main (live) blockchain network, as opposed to a test network.
Margin — The collateral deposit required to open a leveraged position or a sold option position.
Market Cap — Market capitalization — the total value of an asset (price times circulating supply).
Market Order — Buying or selling immediately at the current market price.
MetaMask — An Ethereum/EVM wallet. Used with Aave, Uniswap and Arbitrum.
Meteora — A Solana DLMM (bin-based) liquidity protocol. An alternative to Orca, with dynamic fees.
Lesson →
MEV — Maximal Extractable Value — profit bots extract by reordering transactions (e.g. a sandwich attack).
Lesson →
MiCA — The EU crypto-asset regulation (Markets in Crypto-Assets).
Multisig — A multi-signature wallet — a transaction requires approval from multiple people.

N

Net Delta — Net delta — the sum of the deltas of all positions in a portfolio; a single number for directional exposure.
Nexo — A centralized exchange (CEX) for buying crypto with euros. Custodial — the exchange holds the keys.
NFT — Non-Fungible Token — a unique token. Uniswap V3 LP positions are NFTs.
Non-custodial — A wallet where YOU control the keys. Phantom and MetaMask are non-custodial. Nexo is custodial.

O

Ondo — Ondo Finance — an RWA protocol (USDY, OUSG tokenized bonds).
Onramp — Converting euros into crypto through a provider — the entry point from fiat into crypto.
Option — A financial contract that grants the right (but not the obligation) to buy or sell at a set price.
Oracle — A price-data provider for smart contracts. Chainlink (ETH), Pyth (SOL).
Orca — A Solana DEX with concentrated liquidity (Whirlpool). The basis of our LP strategy on the Solana network.
Lesson →
OTM — Out of The Money — an option with no intrinsic value, only time value.
Out of Range — When the price moves outside an LP range — fees stop accruing.
Lesson →

P

P&L — Profit & Loss — used to evaluate strategy results.
Payoff — A profit-and-loss profile plotted against price (a diagram).
Phantom — A Solana wallet. Connects to Kamino, Orca and Jupiter.
Phishing — A fraudulent website or message that imitates a genuine one, aiming to steal passwords or a seed phrase.
Pool — A liquidity pool in a DEX protocol. Users swap tokens through the pool.
Lesson →
Premium — The price of an option. Paid by the buyer, received by the seller.
Price Impact — How much your own trade moves the token price (larger in thinner pools).
Proof of Reserves — Independent verification that an issuer's reserves are real and cover the tokens in circulation.
Protocol — A smart-contract system that provides a DeFi service (e.g. Aave is a lending protocol).
Put — An option type that grants the right to SELL at a set price. Used as insurance.
Put Spread — Long put + short put. Cheaper protection than a plain put, but with limited coverage.

R

Range — The price range of a concentrated LP position. Fees only accrue while the price is inside the range.
Lesson →
Raydium — A Solana DEX with liquidity pools — one of the largest by volume.
Rebalancing — Redistributing capital between strategy layers, or moving an LP range.
Rebase — A token mechanism where, instead of the price rising, the number of tokens in your wallet periodically changes.
Revoke — Cancelling a previously granted approval (e.g. via revoke.cash) so the protocol can no longer touch your tokens.
Roll — Rolling an option — closing the old one and opening a new one with a later expiry.
Rug pull — When a project's developers withdraw all liquidity and disappear, leaving a worthless token.
RWA — Real World Assets — real-world assets (stocks, bonds, treasuries) represented as blockchain tokens.

S

Seed Phrase — A sequence of 12 (or 24) words — the ONLY way to restore a wallet. Never share it online!
SEPA — A European banking system for cheap or free euro transfers between EU banks.
Single-sided LP — An LP position using a single token (usually USDC). In our strategy, it functions like a paid limit order.
Lesson →
Singleton — A single Uniswap V4 contract shared by all pools — cheaper operations.
Lesson →
SIPC — US brokerage account protection up to $500k. Does NOT apply to tokenized stocks.
Slippage — The difference between the expected and actual price during a swap. Larger for bigger trade sizes.
Smart Contract — A program running on a blockchain. Executes operations automatically according to its programmed rules.
SOL — Solana's native token. Used to pay gas and as collateral.
Solana — A fast blockchain (under 1s, gas under $0.01). Home to the Kamino, Orca and Meteora ecosystem.
Stablecoin — A cryptocurrency pegged to a real-world currency (usually $1). USDC, USDT, DAI, USDY.
Staking — Locking up tokens to help secure a network, in exchange for rewards (Solana roughly 6-7% APY).
Stop Loss — An automatic sale triggered when the price falls to a set level.
Strike — An option's exercise price. A $90 put means the right to sell at $90.
Supply — Depositing an asset into a protocol — as collateral or to generate yield.
Swap — Exchanging one token for another. E.g. SOL to USDC via Jupiter.

T

Theta — An option's change in value from the passage of time. Negative for the buyer (a cost), positive for the seller (income).
Tick — The smallest price step in concentrated-liquidity protocols (Uniswap V3, Orca).
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Time Value — Time value — the portion of the premium attributable to the time remaining until expiry.
Tokenization — The process of "wrapping" a real-world asset into a 1:1-backed blockchain token.
TVL — Total Value Locked — the total value deposited in a DeFi protocol. An indicator of how popular a protocol is.

U

Underlying — The underlying asset an option is based on (e.g. SOL, ETH).
Uniswap — An Ethereum concentrated-liquidity protocol (V3/V4). Its Solana counterpart is Orca.
Lesson →
USDC — A USD stablecoin issued by Circle. Regulated, audited monthly. Our primary stablecoin and loan asset in the Kamino/Aave strategies.
USDT — Tether USD stablecoin. An alternative to USDC. Liquidity on Solana has historically been smaller — most Solana DeFi liquidity is still in USDC.
USDY — A yield-bearing stablecoin (Ondo Finance), backed by US Treasuries, paying roughly 4.5% APY. Replaced with USDC in the 2026 strategy update for liquidity reasons.

V

Vega — An option's sensitivity to volatility (IV). High vega means the option price depends heavily on IV.
Volatility — The degree of price fluctuation. High volatility means greater uncertainty about price movement.

W

Wallet — A crypto wallet. Phantom (Solana), MetaMask (Ethereum). Holds your keys.
Whirlpool — Orca's concentrated-liquidity engine. Works similarly to Uniswap V3, but on the Solana network.
Lesson →

X

xStocks — A line of tokenized stocks on the Solana network, issued by Backed Finance.

Y

Yield — Return, income. In DeFi, yield comes from LP fees, lending interest, and staking rewards.

The full glossary is also available in Lithuanian — žodynėlis.