Glossary

Automated Market Maker​

An automated market maker is a smart contract on Ethereum that holds liquidity reserves. Users can trade against these reserves at prices determined by a fixed formula. Anyone may contribute liquidity to these smart contracts, earning pro-rata trading fees in return.

Asset​

While a digital asset can take many forms, the Koalswap Protocol supports 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 range.

Core​

Smart contracts that are considered foundational, and are essential for KoalaSwap to exist. Upgrading to a new version of core would require deploying an entirely new set of smart contracts on Ethereum and would be considered a new version of the KoalaSwap Protocol.

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 ERC20 tokens into a given liquidity pool. Liquidity providers take on price risk and are compensated with trading fees.

Liquidity​

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

Mid Price​

The price between the available buy and sell prices. Observation​

An instance of historical price and liquidity data of a given pair.

Periphery​

External smart contracts that are useful, but not required for KoalaSwap 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. Different pools may have different fees despite containing the same token pair. Pools were previously called Pairs before the introduction of multiple fee options.

Position​

An instance of liquidity defined by upper and lower tick. And the amount of liquidity contained therein.

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 distance.

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 destination address as the spot price crosses the range.

Reserves​

The liquidity available within a pair. 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 discrete areas in price space.