🔬Glossary

Automated Market Maker (AMM) An automated market maker is a smart contract on SatoshiVM that holds on-chain liquidity reserves. Users can trade against these reserves at prices determined by an automated market making formula.

Constant Product Formula The automated market making algorithm utilized by Savmswap. Commonly referred to as x*y=k.

ERC20 ERC20 tokens are fungible tokens on SatoshiVM. Savmswap supports all standard ERC20 implementations.

Factory A smart contract in Savmswap that creates a unique smart contract for any ERC20/ERC20 trading pair.

Pair A smart contract deployed from the Savmswap Factory, facilitating trading between two ERC20 tokens.

Pool In a pair, liquidity is collectively pooled across all liquidity providers.

Liquidity Provider / LP A liquidity provider is an individual who contributes an equivalent value of two ERC20 tokens to a pair's liquidity pool. LPs assume price risk and earn compensation through trading fees.

Mid Price This is the price midpoint at which users can buy and sell tokens at any given moment. In Savmswap, it is the ratio of the two ERC20 token reserves.

Price Impact The variance between the mid-price and the actual execution price of a trade.

Slippage The degree of price fluctuation in a trading pair between the submission and execution of a transaction.

Core These are the fundamental smart contracts vital for the operation of Savmswap. Migrating to a new version of the core would necessitate a liquidity migration.

Periphery These are external smart contracts that enhance Savmswap's functionality but are not essential for its existence. New periphery contracts can be deployed independently, without the need for liquidity migration.

Flash Swap A transaction type in Savmswap where the tokens being purchased are used before their payment is completed.

x * y = k The formula representing the constant product rule in Savmswap.

Invariant The 'k' value in the constant product formula, representing the product of the reserves that remains constant.