Genius DEX v1
arbitrage: simultaneous purchase and sale of the same asset in different markets to profit from small differences in the asset’s listed price.
capital efficiency: the measure of how much capital is used to match orders when compared to how much capital is actually offered for trades at all possible prices in the pool
centralized exchange: traditional trading platforms that match buyers and sellers that functions essentially as online brokerage accounts
concurrency: the ability to structurally compose a program into units of independently executing computations. Functional programming is the most practical way to write concurrent programs that scale
concentrated liquidity: liquidity that is allocated within a custom price range, as opposed to being distributed uniformly along the price curve between 0 and infinity
composable orders: orders of different types that can be combined with each other, type-checked i.e. the constraints of types can be verified and enforced, and expressed as new composable orders
Extended Unspent Transaction Output (EUTxO): a novel system that extends Bitcoin’s original UTxO paradigm that can be be used to design arbitrarily complex dApps due to its turing-completeness across transactions
functional programming: a programming style, where the main program is a function that is defined in terms of other functions, and the primary method of computation is the application of functions to arguments. It focuses on what is being computed rather than how it is being computed, similar to how we define mathematical functions
imperative programming: traditional programming style such as object-oriented programming e.g. solidity, Java, python, where computation is a sequence of transitions from states to states, as opposed to functional programming that has no implicit states. It is less declarative and often longer than functional counterparts, leading to more bugs
impermanent loss: a DeFi phenomenon where the rebalancing formula in AMMs creates divergence between asset price inside and outside of a liquidity pool
isomorphic: a concept in category theory, where two objects of a category have isomorphism between them i.e. they are the same for all practical purposes. This term describes the nature of Hydra head in Cardano’s L2 solution, whereby off-chain transaction validation, including script execution, follows the same rules as on-chain semantics
limit order: an order type that specifies a price either above the current ask or below the current bid and awaits the movement of prices to become active. If the market is rising, the upward price movement triggers limit orders to sell; if the market is falling, the downward movement triggers limit orders to buy. Limit orders thus provide liquidity to the market.
market order: an order type that buys or sells at the market’s prevailing price that typically has execution certainty
market maker/taker: The market maker places an order (to buy or sell at said price), while a taker accepts that placed order (to execute the buy or sell at the said price). Market makers provide liquidity and depth to markets to take profit from bid/ask spread or from predicted price entries during market volatility; market takers benefit from this liquidity and the ability to enter or exit positions quickly
momentum indicator: a technical analysis tool that shows trend direction and its magnitude i.e. when the price is moving upward or downward and how strongly
moving average convergence divergence (MACD): a popular and effective momentum indicator that composes two moving averages by subtracting the longer moving average from the shorter one
parallelism: the ability to execute multiple tasks at the same time. Functional programming is attractive for parallel tasks because they have powerful abstraction mechanisms and no side effects that eliminates unnecessary architectural dependencies for parallelization
price tick: A measure of the minimum upward or downward movement in the price of a security. In an order book, each price listed is a tick.
relative strength index (RSI): a popular momentum indicator to evaluate overbought or oversold conditions in the price of an asset
slippage: the difference between the expected and executed price of a trade
state channel: a L2 solution to scale up blockchains. The main idea is to achieve L1 security guarantees while limiting on-chain operations via off-chain interactions between users, reducing corresponding overhead
state machine: an abstract way of how computers and computations work. State machines have some internal state that can be changed in response to an external event. They are responsible for the safe transfer of UTxO sets that correspond to the final state of a Hydra head back to the blockchain
Total value locked (TVL): the sum of all assets deposited or staked in a specific protocol