GLOSSARY
DeFi words, in plain English.
You don't need any of these to use EtherHub. They're here for when you want to know what's actually happening underneath, written the way we'd explain it out loud.
- Liquidity pool
- A shared pot of two tokens that people trade against. When someone swaps one for the other they pay a fee, and that fee is split between everyone who put tokens in. Supplying tokens to a pool is what EtherHub does on your behalf when you invest.
- Impermanent loss
- A position holds two tokens. If their prices move apart you end up holding more of the one that fell and less of the one that rose, so you can be worth less than if you had simply held both. It is called impermanent because it shrinks if prices move back, and it stops being impermanent the moment you cash out.
- Yearly return (APY)
- An estimate of what a position would earn over a year if conditions stayed exactly as they are right now. They never do. The return comes from trading fees, so it rises and falls with how much people are actually trading.
- Concentrated liquidity
- Older pools spread your tokens across every possible price, most of which never happen. Concentrated liquidity lets a position focus on a narrow band instead, earning far more in fees while the price stays inside that band and nothing while it sits outside it.
- TVL (total value locked)
- The total value sitting in a pool or a protocol. Useful as a rough size check: a large pool is usually steadier and easier to exit, while a small one can swing hard on a single trade.
- Slippage
- The gap between the price you were quoted and the price you actually got. Prices move between the moment you tap confirm and the moment the transaction lands, and bigger trades in smaller pools slip further.
- Gas
- The fee a blockchain charges to process your transaction. It goes to the network, and it rises when the network is busy. Every transaction shows its gas before you sign.
- DEX (decentralized exchange)
- An exchange that is a program rather than a company. You trade against pools of tokens instead of other people's orders, and nobody takes custody of your funds along the way. Uniswap and Aerodrome are DEXs.
- Self-custody
- You hold your own keys, so nobody can freeze, lend out or lose your funds except you. The flip side is that there is no support line that can recover a lost key. EtherHub is self-custody: it builds the transactions, you sign them, and your tokens never move to us.
- Stablecoin yield
- Earning on tokens pegged to a currency, usually the dollar. Less price swing than the rest of crypto, which also means lower returns. The peg itself is a risk rather than a guarantee.
- Liquid staking
- Staking normally locks your tokens up. Liquid staking hands you a tradeable token representing the staked position, so you keep something you can move while still earning. That tradeable token can drift from the price of what it represents.
- Yield farming
- Moving money between protocols chasing whichever is paying most this week. It can work, but the headline returns usually assume you are watching constantly, and the cost of moving rarely gets counted.
Rather just try it?
Bring any token and make a small investment. The words make more sense afterwards.