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

DeFi glossary

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

2ABCDEFGHIJKLMNOPRSTUVWXY

2

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

A

Aave — Ethereum lending protocol (v3). In our strategy: ETH collateral to a USDC loan.
Lesson →
AML — Anti-Money Laundering — procedures used by banks and exchanges to combat money laundering.
Lesson →
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.
Lesson →
APR — Annual Percentage Rate — the annual interest rate WITHOUT compounding. 10% APR = +10% per year.
Lesson →
APY — Annual Percentage Yield — the annual interest rate WITH compounding. Always higher than the equivalent APR.
Lesson →
Arbitrum — An Ethereum Layer 2 network. Cheaper and faster transactions than Ethereum mainnet.
Lesson →
Assignment — When the buyer of a sold option exercises their right, and the seller must fulfil the resulting obligation.
Lesson →
ATM — At The Money — an option whose strike sits at the current price.
Lesson →
Audit — An independent security review of smart-contract code. Not a guarantee, but it reduces risk.
Lesson →

B

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

C

Call — An option type that grants the right to BUY at the strike price. The opposite of a put.
Lesson →
CEX — Centralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.
Lesson →
Collar — An options strategy: long put + short call + the underlying asset held. Caps both potential loss and potential gain.
Lesson →
Collateral — The asset you deposit in order to borrow. In DeFi this is typically crypto (SOL, ETH).
Lesson →
Composability — The DeFi "Lego" property — a token can be used as collateral, in an LP, and so on.
Lesson →
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.
Lesson →
Covered Call — An options strategy: sell a call option while holding the underlying asset. Generates premium income but caps upside.
Lesson →
Custodian — A licensed custodian that physically holds the real asset backing a token.
Lesson →

D

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

E

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

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.
Lesson →
FIFO — First In, First Out — a tax-accounting method: the first units bought are treated as the first sold.
Lesson →
Funding Rate — A periodic payment (often every 8 hours) exchanged between long and short perpetual futures positions.
Lesson →
Futures — A contract betting on price direction (often with leverage) without owning the underlying asset. Risky for beginners.
Lesson →

G

Gamma — The rate of change of delta. High gamma means delta shifts quickly as the price moves.
Lesson →
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.
Lesson →
GPM — GPM — Lithuanian personal income tax; 15% on realised crypto gains.
Lesson →

H

Halving — A roughly every-4-years event that cuts Bitcoin's mining reward in half.
Lesson →
Hardware Wallet — A physical device (e.g. Ledger) that stores private keys offline, separate from the internet.
Lesson →
Health Factor — A Kamino/Aave position's safety indicator — the closer it is to 1, the closer to liquidation.
Lesson →
Hedge — Protection against losses. In our strategy: put options and put spreads.
Lesson →
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.
Lesson →
Intrinsic Value — Intrinsic value — what an option is worth right now, excluding time value.
Lesson →
Issuer — A regulated company that holds the real asset and issues the token representing it.
Lesson →
ITM — In The Money — an option that has intrinsic value.
Lesson →
IV — Implied Volatility — the volatility the market expects. SOL IV is roughly 70-80%.
Lesson →
IV Crush — A sharp drop in IV (implied volatility) after a known event — it lowers the option's value.
Lesson →

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.
Lesson →

K

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

L

Layer 2 — A second layer built on top of a base blockchain. Arbitrum and Optimism offer cheaper Ethereum transactions.
Lesson →
Lending — Lending/borrowing in DeFi. You deposit collateral and receive a loan in stablecoins.
Lesson →
Leverage — Borrowed funds that proportionally magnify both gains and losses.
Lesson →
Limit Order — An order that only executes once the price reaches the level you specified.
Lesson →
Liquidation — When LTV exceeds the threshold and the protocol automatically sells your collateral to cover the debt.
Lesson →
Looping — Recursive borrowing — borrow, deposit again as collateral, borrow again. Increases leverage and risk.
Lesson →
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 83%+ triggers liquidation.
Lesson →

M

Mainnet — The main (live) blockchain network, as opposed to a test network.
Lesson →
Margin — The collateral deposit required to open a leveraged position or a sold option position.
Lesson →
Market Cap — Market capitalization — the total value of an asset (price times circulating supply).
Lesson →
Market Order — Buying or selling immediately at the current market price.
Lesson →
MetaMask — An Ethereum/EVM wallet. Used with Aave, Uniswap and Arbitrum.
Lesson →
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).
Lesson →
MPC (multi-party computation) — The private key never exists in one place; signing needs several parts to agree. Like multisig, one person cannot sign alone.
Lesson →
Multisig — A multi-signature wallet — a transaction requires approval from multiple people.
Lesson →

N

Net Delta — Net delta — the sum of the deltas of all positions in a portfolio; a single number for directional exposure.
Lesson →
Nexo — A centralized exchange (CEX) for buying crypto with euros. Custodial — the exchange holds the keys.
Lesson →
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.
Lesson →

O

Ondo — Ondo Finance — an RWA protocol (OUSG and other tokenized Treasury products).
Lesson →
Onramp — Converting euros into crypto through a provider — the entry point from fiat into crypto.
Lesson →
Option — A financial contract that grants the right (but not the obligation) to buy or sell at a set price.
Lesson →
Oracle — A price-data provider for smart contracts. Chainlink (ETH), Pyth (SOL).
Lesson →
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.
Lesson →
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.
Lesson →
Payoff — A profit-and-loss profile plotted against price (a diagram).
Lesson →
Phantom — A Solana wallet. Connects to Kamino, Orca and Jupiter.
Lesson →
Phishing — A fraudulent website or message that imitates a genuine one, aiming to steal passwords or a seed phrase.
Lesson →
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.
Lesson →
Price Impact — How much your own trade moves the token price (larger in thinner pools).
Lesson →
Proof of Reserves — Independent verification that an issuer's reserves are real and cover the tokens in circulation.
Lesson →
Protocol — A smart-contract system that provides a DeFi service (e.g. Aave is a lending protocol).
Lesson →
Put — An option type that grants the right to SELL at a set price. Used as insurance.
Lesson →
Put Spread — Long put + short put. Cheaper protection than a plain put, but with limited coverage.
Lesson →

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

S

Seed Phrase — A sequence of 12 (or 24) words — the ONLY way to restore a wallet. Never share it online!
Lesson →
SEPA — A European banking system for cheap or free euro transfers between EU banks.
Lesson →
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.
Lesson →
Slippage — The difference between the expected and actual price during a swap. Larger for bigger trade sizes.
Lesson →
Smart Contract — A program running on a blockchain. Executes operations automatically according to its programmed rules.
Lesson →
SOL — Solana's native token. Used to pay gas and as collateral.
Lesson →
Solana — A fast blockchain (under 1s, gas under $0.01). Home to the Kamino, Orca and Meteora ecosystem.
Lesson →
Stablecoin — A cryptocurrency pegged to a real-world currency (usually $1). USDC, USDT, DAI.
Lesson →
Staking — Locking up tokens to help secure a network, in exchange for rewards (Solana roughly 6-7% APY).
Lesson →
Stop Loss — An automatic sale triggered when the price falls to a set level.
Lesson →
Strike — An option's exercise price. A $90 put means the right to sell at $90.
Lesson →
Supply — Depositing an asset into a protocol — as collateral or to generate yield.
Lesson →
Swap — Exchanging one token for another. E.g. SOL to USDC via Jupiter.
Lesson →

T

Theta — An option's change in value from the passage of time. Negative for the buyer (a cost), positive for the seller (income).
Lesson →
Tick — The smallest price step in concentrated-liquidity protocols (Uniswap V3, Orca).
Lesson →
Time Value — Time value — the portion of the premium attributable to the time remaining until expiry.
Lesson →
Tokenization — The process of "wrapping" a real-world asset into a 1:1-backed blockchain token.
Lesson →
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).
Lesson →
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.
Lesson →
USDT — Tether USD stablecoin. An alternative to USDC. Liquidity on Solana has historically been smaller — most Solana DeFi liquidity is still in USDC.
Lesson →

V

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

W

Wallet — A crypto wallet. Phantom (Solana), MetaMask (Ethereum). Holds your keys.
Lesson →
Whirlpool — Orca's concentrated-liquidity engine. Works similarly to Uniswap V3, but on the Solana network.
Lesson →
Withdrawal delay (timelock) — A setting where a withdrawal only executes after a set time (e.g. 24–72 hours). Gives time to notice and stop a transfer started under duress or by a scammer.
Lesson →
Wrench attack — A physical attack on a crypto holder: threats, kidnapping or a home invasion so that the victim transfers the crypto themselves. Instead of hacking the wallet, the attacker pressures the person.
Lesson →

X

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

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.

Support

Free material is easy to put off

Something practice teaches: when you paid nothing to learn, it is easy to postpone learning indefinitely. If these lessons actually gave you something — saved you a mistake, or explained what nobody else did — you can pay whatever you think they were worth.

This is not a price, a subscription, or a fee for access. The amount is yours to choose, and paying nothing is entirely fine.

Solana address

CUj6wYQLSBxidzm7Lqtkxbw2d8Sv2H2tbJELyAjR756M

Solana network only

Send SOL or SPL tokens (e.g. USDC) only on the Solana network. Sending from an exchange over a different network loses the funds permanently — nobody can recover them.

What you get for it

Nothing extra, and that is deliberate. Every lesson, all three difficulty levels and every calculator stay free and sign-up-free, with or without a donation. There is no gated section, no share of profits, no future token and no claim on anything.

Where the money goes

A donation becomes my own money. I use it to keep the site running and to fund a public demonstration position on a lending protocol — real money, so the lessons have something to show instead of only theory. I publish the results, losses included, publicly and free for everyone. It is my position and my risk, not a pooled fund.

This is a gift for content already received, not an investment and not a payment for a service. Non-refundable. Educational content, not an investment recommendation.