Glossary of Decentralized Finance (DeFi)-banner-imageDictionary

Glossary of Decentralized Finance (DeFi)


Alpha Code: The version where the codes are at an early stage and in the process of being tested.

AMM: Decentralized trading pool that allows crypto assets to be traded.

APY: Percentage return on investment in an asset one year later.

Arbitrage: Profit-oriented transactions made by taking advantage of the price differences in two different markets.

Audit: Infrastructure auditing of protocols by third-party audit companies.


Beta Code: The version where the codes are in the release phase of the product and in the process of being tested.


CeFi: Provides financial services for crypto assets in a centralized structure.

CEX: Crypto asset trading platforms with physical addresses and institutional structures. For example, is a Digital Asset Trading Platform.

Collateralization: The method of performing various financial transactions by borrowing in exchange for assets.

Compound Interest: Obtaining higher returns by returning obtained interest to the investment.


DAO: Organizational structures whose rules are determined by smart contracts.

dApp: Applications running on blockchain.

DeFi: Provides financial services for crypto assets in a decentralized structure.

Derivative: The name given to investment instruments that emerge on the value of an asset or assets.

DEX: Digital asset trading platforms running on smart contracts.


Gas Fee: Transaction fee paid to perform any transaction on the blockchain.

Governance Token: Crypto assets that grant voting rights and are used to develop or make decisions about a smart contract.

Gwei: The unit used to calculate gas fee on the Ethereum network.

I Impermanent Loss: Depreciation of assets locked in pools due to temporary price drops in temporary pools.


Lending aggregator: Smart contracts that find the best rates for individuals who want to earn income by lending in the pools.

Leverage: A multiplier that allows the transactions to be performed to be multiplied.

Liquidity Mining: Earning income in exchange for providing liquidity.

Liquidity Pool: Pools of assets known as LPs to provide liquidity flow to smart contracts.

Liquidity Providers: Individuals who provide liquidity to the DeFi platforms to earn income.

Liquidity Token: Tokens given to liquidity providers in exchange for providing liquidity.


MetaMask: An extension used to connect many DeFi platforms.

Multisig Wallet: A type of wallet that requires the approval of multiple individuals for a transaction to take place.


Protocol: Rules that work within certain standards and limits, such as ERC-20.


ROI: Total return on investment.


Slippage: The difference between the purchase price and the sale price of an asset.

Spread: The difference between the order prices of potential buyers and sellers after the order is transmitted in the market.

Stake: By locking cryptocurrency, earning income or gaining rights such as voting rights.


Total Value Locked: Total value of locked assets in a smart contract on a protocol.


Volatility: Unit that shows the rate of change in price of an asset.


Yield Farming: Earning additional income by manually or automatically lending or by arbitrage.