# Glossary

### Automated Market Maker[​](https://docs.uniswap.org/concepts/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[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#concentrated-liquidity)

Liquidity that is allocated within a determined price range.

### Core[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#factory)

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

### Flash Swap[​](https://docs.uniswap.org/concepts/glossary#flash-swap)

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

### Invariant[​](https://docs.uniswap.org/concepts/glossary#invariant)

The “k” value in the constant product formula X\*Y=K

### Liquidity Provider / "LP"[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#liquidity)

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

### Mid Price[​](https://docs.uniswap.org/concepts/glossary#mid-price)

The price between the available buy and sell prices.\
\
Observation[​](https://docs.uniswap.org/concepts/glossary#observation)

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

### Periphery[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#position)

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

### Price Impact[​](https://docs.uniswap.org/concepts/glossary#price-impact)

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

### Protocol Fees[​](https://docs.uniswap.org/concepts/glossary#protocol-fees)

Fees that are rewarded to the protocol itself, rather than to liquidity providers.

### Range[​](https://docs.uniswap.org/concepts/glossary#range)

Any interval between two ticks of any distance.

### Range Order[​](https://docs.uniswap.org/concepts/glossary#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[​](https://docs.uniswap.org/concepts/glossary#reserves)

The liquidity available within a pair. This was more commonly referenced before concentrated liquidity was introduced.

### Slippage[​](https://docs.uniswap.org/concepts/glossary#slippage)

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

### Spot Price[​](https://docs.uniswap.org/concepts/glossary#spot-price)

The current price of a token relative to another within a given pair.

### Swap Fees[​](https://docs.uniswap.org/concepts/glossary#swap-fees)

The fees collected upon swapping which are rewarded to liquidity providers.

### Tick Interval[​](https://docs.uniswap.org/concepts/glossary#tick-interval)

The price space between two nearest ticks.

### Tick[​](https://docs.uniswap.org/concepts/glossary#tick)

The boundaries between discrete areas in price space.

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