Glossary

Last Updated on Feb. 27, 2024

Automated Market Maker​

An automated market maker is a smart Solana contract with 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 Ducklend Protocol supports SPL token pairs.

Concentrated Liquidity​

Liquidity that is allocated within a determined price range.

Constant Product Formula​

Ducklend uses an automated market-making algorithm, which is x*y=k.

Core​

Smart contracts are considered foundational and essential for Ducklend's existence. Upgrading to a new core version would require deploying an entirely new set of smart contracts on Solana and would be considered a new version of the Ducklend Protocol.

SPL​

SPL is the token program on the Solana blockchain. It defines a common implementation for Fungible and Non-Fungible tokens. Ducklend supports all standard SPL implementations.

Factory​

A smart contract that deploys a unique smart contract for any SPL 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 SPL tokens into a given liquidity pool. Liquidity providers take on price risk and are compensated with trading fees.

Liquidity​

Digital assets are stored in a Ducklend pool contract and can be traded against traders.

Mid Price​

The price between the available buy and sell prices. In Ducklend, this is the ratio of the two SPL token reserves.

Observation​

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

Pair​

A smart contract deployed from a Ducklend factory contract that enables trading between two SPL tokens.

Periphery​

External smart contracts that are useful but not required for Ducklend to exist. New periphery contracts can always be deployed without migrating liquidity.

Pool​

A contract deployed by the Ducklend that pairs two SPL 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 upper and lower tick defines an instance of liquidity. 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 is 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 submitting a transaction and executing it.

Spot Price​

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

Swap Fees​

The fees collected upon swapping are rewarded to liquidity providers.