Our Glossary

WAGMI is a wide ecosystem. Here are some definitions that will allow you to navigate better inside of it!

Automated Market Makers (AMMs) - Smart contracts that allow users to trade assets in a non-custodial and peer to peer manner, using liquidity pools and liquidity providers!

Liquidity Providing - Liquidity providing means being a Market Maker on Decentralized Exchanges, earning trading fees by providing capital to the liquidity pool!

Decentralized Exchanges (DEXs) - A particular type of non-custodial Cryptocurrency Exchange where users trade assets thanks to different smart contracts and pools. Examples could be Uniswap, Sushiswap, Spookyswap etc etc.

GMI - represents a pool within which we have multiple multi-pools, and each multi-pool consists of three V3 pools. You can acquire GMI with any WLP token that is supported by GMI and by holding GMI earn fees from all multi pools inside the GMI.

Multiposition concentrator - Unlike the traditional approach of having separate pools for each pair, such as ETH/USDT, the multiposition concentrator integrates a multi pool and multiposition embedded contract. This allows us to pull comprehensive historical data for all available pools on the network.

Impermanent Loss (IL) - The Opportunity cost that Liquidity Providers might encounter if one of two assets they are LPing changes in price a lot compared to the other! Read more about IL here. Slippage - Slippage, in simple terms, is the loss that can occur as other swaps of these tokens take place during the processing of your transaction. To help avoid slippage you can set your gas price higher.

Total Value Locked (TVL) - Dollar Value of all the assets deposited in a particular smart contract or pool.

Annualized Percentage Rate (APR) - The percentage by which users can expect their token investment to grow in one year, not taking into account the possible compounding factor.

Return On Investment (ROI) - Similar to the APR, the ROI is a popular profitability metric used to evaluate how well an investment has or will be performing over a particular period of time.

LP Tokens - Tokens that are received from the decentralized exchange once users deposits capital in order to become liquidity providers. Different Pairs on different DEXs have different LP tokens.

Wagmi Liquidity Provision Tokens (WLP) - Tokens that are sent to Wagmi users when they deposit liquidity in one of our smart contracts.

Popsicle Liquidity Provision Tokens (PLP) - Tokens that are sent to the Popsicle Finance Users when they deposit liquidity in one of our smart contracts. Different Pairs of tokens will have different PLP tokens.

Volatility - The Volatility is a statistical measure that describes how dispersed a particular asset's returns are. An asset with higher Volatility is a riskier asset than one with low volatility.

Staking - Token staking is a process in which users lock up or "stake" their tokens in a wallet or platform to support the operations of a blockchain network, typically in Proof-of-Stake (PoS) or Delegated Proof-of-Stake (DPoS) consensus mechanisms. In return for their contribution, users can earn revenue in the form of staking rewards or other incentives.

Liquidity Index - The accumulated interest of a reserve during a given time interval since the last timestamp update, measuring the reserve's growth.

Loan To Value (LTV) - The maximum borrowing capacity of specific collateral. For instance, with a 75% LTV, users can borrow 0.75 ETH worth of principal currency for every 1 ETH worth of collateral. LTVs vary for each collateral type and are expressed as percentages.

Liquidation Threshold - The boundary at which a borrow position is deemed undercollateralized and subject to liquidation. For example, if a collateral's liquidation threshold is 80%, the loan is liquidated when the debt value reaches 80% of the collateral value. This threshold is determined per collateral and expressed as a percentage.

Liquidation Bonus - An incentive for liquidators in the form of a bonus for purchasing specific collateral with a health factor below 1. The bonus varies per collateral and is expressed as a percentage.

Health Factor - A metric representing the ratio between the total collateral multiplied by the liquidation threshold and the borrowed principal. A loan is considered undercollateralized and eligible for liquidation when the Health Factor falls below 1.