Plain-English explanations of 104 Solana trading and DeFi terms.
A sniper bot is an automated trading tool that executes buy orders within milliseconds of a token launch or liquidity event, aiming to get the earliest possible entry price.
Read moreSlippage is the difference between the expected price of a trade and the actual price you receive when the transaction executes. It occurs because pool prices shift between the time you submit a trade and when it confirms on-chain.
Read moreFront-running is when a bot or trader detects your pending transaction and submits their own trade before yours to profit from the price movement your trade will cause.
Read moreCopy trading is an automated strategy where your wallet mirrors the buy and sell transactions of another wallet in real time, letting you replicate a successful trader’s moves without manual effort.
Read moreA DEX is a non-custodial exchange where users trade tokens directly from their wallets through smart contracts, without a centralized intermediary holding funds.
Read moreA DEX aggregator scans multiple decentralized exchanges and liquidity pools to find the best price for a token swap, often splitting orders across sources for optimal execution.
Read moreDCA is an investment strategy where you buy a fixed dollar amount of a token at regular intervals, reducing the impact of volatility on your average purchase price.
Read moreA limit order lets you set a specific price at which you want to buy or sell a token, and the trade only executes when the market reaches that price.
Read morePerpetual futures (perps) are derivative contracts that let you trade with leverage and go long or short on a token’s price, with no expiration date.
Read moreMarket cap is the total value of a token’s circulating supply, calculated by multiplying the current price by the number of tokens in circulation.
Read moreFDV is the theoretical market cap if all tokens that will ever exist were in circulation at the current price, calculated as price × maximum supply.
Read moreA whale is an individual or entity holding a very large amount of a cryptocurrency, whose trades can significantly move the token’s price.
Read moreExit liquidity refers to new buyers whose purchases provide the liquidity that allows earlier holders (often insiders) to sell at a profit — essentially, the last people buying before a dump.
Read moreA pump and dump is a manipulation scheme where insiders artificially inflate a token’s price through coordinated buying and hype, then sell their holdings at the peak, crashing the price.
Read morePnL (Profit and Loss) is the measure of how much money you’ve made or lost on your trades, calculated as the difference between what you paid and what you received (or current value).
Read moreLeverage lets you trade with more capital than you actually have by borrowing funds, amplifying both potential gains and losses — a 10x leveraged position moves 10x faster than the underlying asset.
Read moreFOMO (Fear of Missing Out) is the anxiety-driven urge to buy a token because its price is rapidly rising, often leading to buying at the top and suffering losses.
Read moreA bag holder is someone still holding a token that has drastically dropped in value, often hoping for a recovery that may never come, after buying near the top.
Read moreBot trading uses automated software to execute trades faster and more consistently than manual trading, essential for competitive Solana memecoin and DeFi strategies.
Read moreSniping is the practice of being the first to buy a newly launched token, typically using automated bots that detect and purchase tokens within milliseconds of creation.
Read moreArbitrage is profiting from price differences of the same token across different exchanges or pools — buying where it’s cheaper and simultaneously selling where it’s more expensive.
Read moreA market maker provides liquidity by continuously placing buy and sell orders around the current price, profiting from the bid-ask spread while enabling other traders to execute trades.
Read moreTrading volume is the total value of tokens traded over a period (usually 24 hours), indicating how actively a token is being bought and sold.
Read moreAn order book DEX matches buy and sell limit orders directly, showing all pending orders at different price levels — the same mechanism used by traditional stock exchanges.
Read moreWhale watching is the practice of monitoring large crypto wallets’ transactions and holdings to gain trading insights, since whale moves often precede major price movements.
Read morePortfolio rebalancing is periodically adjusting your crypto holdings back to target allocations — selling overweight positions and buying underweight ones to maintain your desired risk profile.
Read morePaper trading is simulated trading where you practice buying and selling tokens with fake money, allowing you to test strategies and learn without financial risk.
Read moreAuto-sell automatically executes sell orders when a token reaches a preset price target (take-profit) or drops below a threshold (stop-loss), removing emotion from exit decisions.
Read moreA watchlist is a curated list of tokens you’re monitoring for potential trades, with price tracking and alerts to notify you when conditions for entry or exit are met.
Read moreA liquidity pool is a pair of tokens locked in a smart contract that enables decentralized trading. Liquidity providers deposit both tokens and earn a share of trading fees in return.
Read moreImpermanent loss is the reduction in value that liquidity providers experience when the price ratio of tokens in a pool changes compared to simply holding those tokens outside the pool.
Read moreAn AMM is a decentralized trading mechanism that uses liquidity pools and mathematical formulas instead of order books to determine token prices and execute swaps.
Read moreYield farming is the practice of depositing crypto into DeFi protocols to earn rewards, typically through providing liquidity, lending, or staking in incentivized pools.
Read moreLiquid staking lets you stake SOL and receive a liquid token (LST) in return that earns staking rewards while remaining usable in DeFi for lending, LP, or collateral.
Read moreStaking is the process of delegating your SOL to a validator to help secure the Solana network, earning rewards (currently ~7-8% APY) in return.
Read moreTVL measures the total value of crypto assets deposited in a DeFi protocol’s smart contracts, used as a key metric for comparing protocol adoption and health.
Read moreAPR (Annual Percentage Rate) is the simple annual return without compounding, while APY (Annual Percentage Yield) includes the effect of compounding, making it higher than APR for the same underlying rate.
Read moreLiquidation occurs when a leveraged or collateralized position falls below the required collateral ratio, triggering automatic sale of your collateral to repay the debt.
Read moreA DAO is an organization governed by token holders through on-chain voting, where proposals and decisions are executed by smart contracts instead of a traditional management hierarchy.
Read moreA governance token gives holders the right to vote on protocol decisions, parameter changes, and treasury allocations, effectively making them partial owners of the protocol.
Read moreA lending protocol lets you deposit crypto to earn interest from borrowers, or borrow crypto by providing collateral — all peer-to-protocol without intermediaries.
Read moreA flash loan is an uncollateralized loan that must be borrowed and repaid within a single transaction — if the borrower can’t repay, the entire transaction reverts as if it never happened.
Read moreConcentrated liquidity lets LP providers focus their capital within a specific price range rather than across all prices, dramatically increasing capital efficiency and fee earnings within that range.
Read moreA prediction market lets users bet on the outcome of future events (elections, sports, crypto prices) by trading shares that pay out based on results, with prices reflecting crowd-estimated probabilities.
Read moreA rug pull is a scam where a token creator abandons a project after extracting liquidity or investor funds, leaving holders with worthless tokens.
Read moreBundling on Solana means grouping multiple transactions into a single atomic bundle via Jito, guaranteeing they execute together in a specific order within the same block.
Read moreHolder distribution shows how a token’s supply is spread across wallets, revealing concentration risk — whether a few wallets control enough supply to crash the price.
Read moreA honeypot is a scam token designed so that buyers can purchase it but cannot sell it, trapping their funds permanently while the creator extracts value.
Read moreA wallet drainer is a malicious website or smart contract designed to steal all tokens and NFTs from a user’s wallet by tricking them into signing harmful transactions.
Read moreDYOR (Do Your Own Research) means independently verifying information about a token or project before investing, rather than blindly following influencers, calls, or hype.
Read moreA trust score is a composite rating that evaluates a wallet’s or token’s reliability based on on-chain behavior, history, and risk factors to help traders make informed decisions.
Read moreA token safety check is a due diligence process that examines on-chain properties of a Solana token (authorities, holders, liquidity, deployer) to assess the risk of scam or rug pull.
Read moreAirdrop farming is the practice of deliberately using protocols and platforms before their token launch in hopes of qualifying for a free token distribution (airdrop) as a reward for early activity.
Read moreToken vesting is a mechanism that locks a portion of a token’s supply and releases it gradually over time according to a predefined schedule, preventing insiders from dumping all at once.
Read moreAn Associated Token Account (ATA) is a deterministic Solana account that holds a specific SPL token for a specific wallet. Every token you own requires its own ATA, and creating one costs a small amount of SOL for rent.
Read moreSPL tokens are the standard fungible token format on Solana, created using the Solana Program Library — equivalent to ERC-20 tokens on Ethereum.
Read moreToken-2022 is Solana’s next-generation token program that adds extensions like built-in transfer fees, interest-bearing tokens, and confidential transfers to SPL tokens.
Read moreToken supply refers to the number of tokens in existence, broken down into circulating supply (freely tradeable), total supply (all minted tokens), and max supply (hard cap if one exists).
Read moreMint authority is the wallet or program that has permission to create (mint) new tokens, increasing the total supply. If not revoked, the authority holder can inflate supply at any time.
Read moreFreeze authority is the wallet or program that can freeze any holder’s token account, preventing them from transferring or selling their tokens.
Read moreToken burning permanently removes tokens from circulation by sending them to an inaccessible address, reducing total supply and theoretically increasing scarcity.
Read moreA wrapped token is a representation of a token from another blockchain, backed 1:1 by the original asset locked in a bridge contract. For example, wrapped ETH on Solana represents ETH locked on Ethereum.
Read moreAn airdrop is a free distribution of tokens to wallet addresses, typically rewarding early users, community members, or protocol interactors as a growth and decentralization strategy.
Read moreNFTs (Non-Fungible Tokens) on Solana are unique digital assets stored on-chain, commonly used for art, collectibles, gaming items, and membership passes, with near-zero minting costs.
Read moreA token migration is when a project replaces its existing token with a new one, requiring holders to swap old tokens for new ones, usually to upgrade the token’s functionality or fix issues.
Read moreA token unlock is a scheduled event where previously locked tokens (from team, investor, or ecosystem allocations) become available for trading, often creating sell pressure.
Read moreSOL is Solana’s native cryptocurrency used to pay transaction fees, stake with validators, participate in DeFi, and govern the network.
Read moreA memecoin is a cryptocurrency created around internet memes, humor, or cultural trends, with value driven primarily by community sentiment and speculation rather than utility.
Read moreToken metadata is the on-chain information attached to a Solana token including its name, symbol, logo, description, and links — defined using the Metaplex Token Metadata standard.
Read moreA seed phrase (recovery phrase) is a sequence of 12 or 24 words that serves as the master key to your crypto wallet — anyone who has it controls all funds in that wallet.
Read moreA burner wallet is a temporary, disposable wallet used for risky interactions like new token launches, unknown dApps, or airdrop claims, isolating risk from your main holdings.
Read moreA hot wallet is connected to the internet (like Phantom) for convenient trading, while a cold wallet (like Ledger) stays offline for maximum security of long-term holdings.
Read moreA multi-sig wallet requires multiple private keys to authorize a transaction, ensuring no single person can unilaterally move funds — commonly used for project treasuries and team wallets.
Read moreRent is a small SOL deposit required to keep accounts (token accounts, data accounts) stored on the Solana blockchain — it’s refundable when the account is closed.
Read moreWallet analysis is the process of examining a Solana wallet’s on-chain history to understand its trading performance, behavior patterns, and potential connections to other wallets.
Read moreCompute units (CU) are Solana’s measure of computational resources consumed by a transaction, similar to gas on Ethereum but with a fixed cap per transaction.
Read moreSolana transaction fees consist of a tiny base fee (0.000005 SOL per signature) plus optional priority fees paid per compute unit to incentivize faster transaction inclusion.
Read moreA Solana validator is a server that processes transactions, produces blocks, and participates in consensus to secure the Solana network, earning rewards from staking and transaction fees.
Read moreProof of Stake is a consensus mechanism where validators stake cryptocurrency as collateral to participate in block production, replacing the energy-intensive mining of Proof of Work.
Read moreProof of History is Solana’s innovation that creates a cryptographic timestamp for every transaction, allowing validators to agree on time ordering without waiting for consensus.
Read moreA smart contract (called a “program” on Solana) is self-executing code deployed on the blockchain that automatically enforces rules and processes transactions without intermediaries.
Read moreA PDA is a special Solana address derived from a program ID and seeds that has no private key — only the owning program can sign for it, making it perfect for protocol-controlled accounts.
Read moreA block explorer is a web tool that lets you search and inspect any transaction, wallet, token, or program on the Solana blockchain — like a search engine for on-chain data.
Read moreDevnet and Testnet are separate Solana networks for testing where tokens have no real value, allowing developers to build and test applications without risking real money.
Read moreGas optimization on Solana means minimizing transaction costs by configuring compute unit budgets, priority fees, and Jito tips appropriately for each transaction’s urgency level.
Read moreA transaction signature (tx sig) is the unique identifier for every Solana transaction — a base-58 encoded string you can use to look up any transaction on a block explorer.
Read moreAn RPC (Remote Procedure Call) node is a server that provides an interface to interact with the Solana blockchain — reading data, submitting transactions, and querying account states.
Read moregRPC is a high-performance data streaming protocol used on Solana to receive real-time blockchain updates (new transactions, account changes, slot updates) with lower latency than standard RPC polling.
Read moreAn oracle is a service that feeds external data (prices, events, random numbers) to on-chain smart contracts, enabling DeFi protocols to know real-world asset prices.
Read moreA bridge is a protocol that transfers tokens between different blockchains, allowing you to move assets from Ethereum, BSC, or other chains to Solana and back.
Read moreDePIN (Decentralized Physical Infrastructure Networks) are crypto projects that use token incentives to build real-world infrastructure like wireless networks, compute, storage, and sensors.
Read moreJito is Solana’s leading MEV infrastructure provider, offering a modified validator client that accepts transaction bundles with tips for guaranteed inclusion and ordering.
Read moreA CTO (community takeover) happens when a token’s original developer abandons the project and community members step in to continue marketing, building, and driving the token forward.
Read morePriority fees are extra SOL paid to validators to prioritize your transaction, while Jito tips are payments to Jito block builders for guaranteed inclusion and optimal ordering in the next block.
Read moreA bonding curve is a mathematical pricing model where a token’s price increases automatically as more tokens are bought and decreases as they’re sold, without needing a traditional liquidity pool.
Read moreA token “graduates” on Pump.fun when its bonding curve fills completely (~85 SOL), triggering an automatic migration to a Raydium liquidity pool where it trades like any other SPL token.
Read moreMEV (Maximal Extractable Value) is the profit that can be extracted by reordering, inserting, or censoring transactions within a block. On Solana, MEV primarily manifests as sandwich attacks and backrunning on DEX trades.
Read moreRaydium’s AMM uses the classic constant-product formula with liquidity spread across all prices, while CPMM (Concentrated Product Market Maker) lets LPs focus capital in specific price ranges for higher fee efficiency.
Read morePumpSwap is Pump.fun’s native decentralized exchange that handles post-graduation token trading directly, replacing the previous Raydium migration and keeping trading within the Pump.fun ecosystem.
Read moreA deployer wallet is the Solana address that creates (deploys) a new token — its on-chain track record of past launches reveals whether future tokens are likely to succeed or rug.
Read moreCTO trading involves buying tokens where the original developer has abandoned the project but the community has taken over, betting on the community’s ability to drive new growth.
Read moreA token launch is the process of creating and deploying a new token on Solana, typically through Pump.fun’s bonding curve mechanism, making it immediately tradeable.
Read moreCrypto payments on Solana use the blockchain to transfer value directly between sender and receiver, with near-instant finality and sub-cent fees — making Solana ideal for real-world payment use cases.
Read moreCrypto gaming on Solana integrates blockchain for in-game asset ownership, play-to-earn rewards, and tradeable game items as NFTs, leveraging Solana’s speed for real-time gameplay.
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