# Glossary #### **Liquidity pool** A smart contract that consists of locked tokens to ensure liquidity for decentralized trading #### **Layer 1 Blockchain** Base layer blockchain architecture, eg. Bitcoin, Ethereum #### **Layer 2 Blockchain** Off-chain network lying on top of the base (layer 1) blockchain, eg. Plasma for Ethereum, Lightning Network for Bitcoin #### **Smart order-routing** Automated process that uses a set of preset conditions to determine the best available opportunity among a set of several trading venues #### **Turing-complete blockchain** Allows the deployment of smart contracts that can implement sophisticated logic to perform virtually any task (given enough time and processing power) #### **Trustless system** A system that does not require its participants to know or trust each other #### **Proof of Stake (PoS)** A distributed consensus mechanism wherein the mining power afforded to a person is in proportion to the stake that person holds in that chain #### **Stablecoin** Cryptocurrencies that peg their value to an external asset (like the U.S. Dollar or the price of gold) and are generally more stable than other cryptocurrencies #### **Non-custodial trading** A way of trading that doesn’t require any centralized exchange to hold custody of user’s assets #### **Automated Market Maker (AMM)** A DEX protocol that uses liquidity pools to facilitate the trade of assets in a permissionless and automatic way **Slippage** Difference between expected and actual price of the trade --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.dfyn.network/glossary.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.