> For the complete documentation index, see [llms.txt](https://docs.dfyn.network/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.dfyn.network/glossary.md).

# 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