Glossary
Monad & DeFi glossary
Short, plain-English definitions of the concepts behind creating tokens, running liquidity, and swapping on Monad.
- AMMAn automated market maker (AMM) is the algorithm a DEX pool uses to price trades from its token reserves, instead of matching individual buy and sell orders.
- Concentrated liquidityConcentrated liquidity lets a provider supply liquidity only within a chosen price range, earning more fees on the same capital than a full-range position.
- Crypto tokenA crypto token is a unit of value recorded by a smart contract on a blockchain; on EVM chains most tokens follow the ERC-20 standard.
- DEXA DEX (decentralized exchange) lets users swap tokens directly from their wallets through smart contracts, with no custodian holding their funds.
- DEX aggregatorA DEX aggregator searches multiple liquidity sources and splits or routes a trade to get the best overall price and least slippage.
- ERC-20ERC-20 is the standard interface for fungible tokens on Ethereum and EVM chains like Monad, defining the functions (transfer, approve, balanceOf) every wallet and exchange expects a token to have.
- EVMThe EVM (Ethereum Virtual Machine) is the runtime that executes smart contracts; EVM-compatible chains like Monad run the same bytecode and tooling as Ethereum.
- GasGas is the fee you pay to execute a transaction on an EVM chain, priced in the chain's native coin — MON on Monad.
- HoneypotA honeypot is a malicious token you can buy but not sell, engineered so only the creator can cash out — a common rug-pull scam.
- Liquidity poolA liquidity pool is a smart contract holding two tokens that traders swap against; its balances set the price via an automated market maker formula.
- LP tokenAn LP (liquidity-provider) token is a receipt a DEX gives you when you deposit into a liquidity pool; it represents your share of that pool.
- MintingMinting creates new tokens and adds them to the total supply; only an address with mint permission on the contract can do it.
- MONMON is the native coin of the Monad blockchain, used to pay gas fees and as the base asset most tokens are paired against in liquidity pools.
- MonadMonad is a high-performance, EVM-compatible layer-1 blockchain designed for high throughput and low fees while running standard Ethereum tooling and contracts.
- Renounce ownershipRenouncing ownership permanently gives up the owner's admin rights over a token contract, so no one can mint, change tax, or pause it again.
- SlippageSlippage is the difference between the price you expect on a swap and the price you actually get, caused by price movement or low liquidity between quote and execution.
- Smart contractA smart contract is code deployed on a blockchain that runs exactly as written when called, with no operator able to alter or stop it.
- Token burningBurning permanently removes tokens from circulation by sending them to an address no one controls, lowering total supply for good.
- Token taxA token tax is a fee the token's contract takes on transfers — a percentage routed to a wallet, liquidity, or burn on each buy or sell.
- Total supplyTotal supply is the number of tokens that currently exist for a contract — every minted token minus every burned token.
- Uniswap V2Uniswap V2 is the constant-product AMM design where liquidity is spread evenly across all prices and providers receive fungible LP tokens.
- Uniswap V3Uniswap V3 introduced concentrated liquidity, letting providers commit capital to a specific price range and represent each position as an NFT.
- Wei and GweiWei is the smallest unit of an EVM coin (10⁻¹⁸), and Gwei is one billion wei (10⁻⁹), the unit gas prices are usually quoted in.
- WMONWMON (Wrapped MON) is an ERC-20 version of MON, used wherever a contract requires a standard token rather than the native coin.