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Interacting with a Defi protocol can be a bit of a challenge. Don't worry though, we've created a range of DeFi Glossary to help you get comfortable with BridgeSwap !

Key Terms

DeFi: Short for "decentralized finance", a catch-all term for financial services that are provided on public blockchains, including swapping tokens, adding liquidity, staking in pools, farming for yield, and more.

Decentralized Exchange (DEX): A protocol that uses smart contracts to allow users to swap between crypto tokens without a centralized intermediary.

Swap: To trade some amount of one token for an equivalent amount of another token.

Liquidity: The extent to which an asset is available to be bought or sold. In the context of a DEX, the amount of crypto tokens that can be traded for one another.

Liquidity Pool: A combination of two crypto assets that allows a decentralized exchange to facilitate trading between the two tokens.

Liquidity Pool: A combination of two crypto assets that allows a decentralized exchange to facilitate trading between the two tokens.

Liquidity Provider: Someone who adds liquidity to a protocol by contributing 1:1 amounts of two crypto tokens to a liquidity pool.

LP Token: A new token that is created and granted to a liquidity provider as a "receipt" of the liquidity that they added to a liquidity pool.

Stake: To contribute crypto tokens that you own into a protocol to earn rewards.

Pools: A protocol that allows users to stake one type of token to earn either more of the same token that was staked, or other tokens. Staking Pools can be expressed in the following format: "Stake [token type], Earn [token type]."

Yield Farms: A protocol that allows users to stake LP tokens to earn tokens as a reward. Yield Farms incentivize users to add liquidity to a DEX so that the DEX can continue to facilitate token swaps between the two tokens in the liquidity pool.

APR (Annual Percentage Rate): The rate of return on staked assets, exclusive of the effects of compounding. These are subject to change based on a number of different factors.

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