DeFi Glossary
Plain definitions of the terms that come up when you trade synthetics, and what each one means once you're actually holding a position.
Basics
Synthetic Asset
A token that tracks the price of another asset without requiring ownership of the underlying.
Long Token (L Token)
A token that gains value when the underlying asset price increases.
Short Token (S Token)
A token that gains value when the underlying asset price decreases.
Collateral
Assets deposited to back or secure a financial position.
Redemption
Hand the tokens back, get the collateral out.
Minting
Put collateral in, get new synthetic tokens out.
Trading
Liquidation
Your position gets closed for you when the collateral no longer covers the debt.
Leverage
Borrowed money makes a position bigger, which multiplies the gain and the loss alike.
Funding Rate
Periodic payments between long and short traders in perpetual futures.
Perpetual Futures (Perps)
Futures contracts with no expiration date that track an underlying asset.
Arbitrage
Buy the same thing cheaply in one market, sell it dearly in another, keep the difference.
Health Factor
One number that tells you how close a borrowed position is to being closed.
Overcollateralization
Posting more collateral than the loan is worth, so a price swing does not wipe it out.
DeFi
Composability
The ability of DeFi protocols and tokens to work together like building blocks.
Real World Assets (RWA)
Traditional assets like stocks, bonds, or real estate that are tokenized and brought on-chain.
Meteora DLMM
A Dynamic Liquidity Market Maker on Solana using discrete price bins for concentrated liquidity.
Lending Protocol
A market where you lend assets for yield, or borrow against what you have posted.
Technical
Oracle
A service that brings off-chain data (like prices) onto the blockchain.
SPL Token
The standard token format on the Solana blockchain.
Pyth Network
An oracle network that publishes prices on Solana fast enough to trade against.
Jito Bundles
Atomic transaction bundles on Solana that protect against MEV frontrunning.
All Terms A-Z
Solana devnet · Test tokens only. Open a market with test tokens, or join the list for later access.