# Glossary

## 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.