📘Glossary

A quick reference for key trading and DeFi terms

General Trading Terms

Bid / Ask

• The bid is the highest price a buyer is willing to pay for an asset.

• The ask is the lowest price a seller is willing to accept.

• The difference between the two is the spread, which reflects market liquidity.

Spread

• The gap between the bid and ask price.

• Tight spreads typically mean better liquidity and less slippage. Wider spreads can result in more expensive trades.

Limit Order / Market Order

• A market order executes instantly at the best available price.

• A limit order lets you set the price you want to buy or sell at—but it may not fill if the market doesn’t hit your price.

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DeFi & Onchain Terms

AMM (Automated Market Maker)

• A smart contract-based system that allows users to swap tokens without relying on order books.

• Trades are executed against liquidity pools instead of individual buyers/sellers.

LP (Liquidity Provider)

• A user who deposits tokens into an AMM pool to enable swaps.

• LPs earn a portion of the swap fees based on how much liquidity they contribute.

Smart Contract

• Code deployed on-chain that runs automatically under specific conditions.

• Monday Trade uses smart contracts to handle swaps, liquidity provision, and more without intermediaries.

Gas

• A small fee paid to execute transactions on the blockchain.

• On Monad, gas fees are lower and execution is faster than on Ethereum.

Slippage

• The difference between the expected price of a trade and the price it actually executes at.

• More common in volatile markets or low-liquidity tokens.

Price Impact

• The change in an asset’s price caused by your trade consuming available liquidity.

• Price impact is a key part of slippage.

Wallet (e.g. Rabby)

• A browser extension or mobile app used to interact with DeFi protocols.

• Rabby, Phantom, and other wallets let you sign transactions, swap tokens, and manage funds on Monday Trade.