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Terminology

  • Base Token: The token being traded in a market (e.g., ETH in the ETH/USDC pair).

  • Quote Token: The token used to price the base token (e.g., USDC in the ETH/USDC pair).

  • Bid: A limit order on the order book to buy the base token with the quote token. The price and amount of each respective token is specified by the price and size parameters of the order.

  • Ask: A limit order on the order book to sell the base token for the quote token. The price and amount of each respective token is specified by the price and size parameters of the order.

  • Limit Order: An order that remains on the order book until it is either filled or canceled.

    • Good Till Canceled (GTC): An order for which the unmatched portion remains on the order book until it is either filled or canceled.

    • Post Only: An order that is added only if it does not immediately match with an existing order on the order book (either partially or completely). Ideal for market making/liquidity providing because the order will rest on the book and not incur taker fees.

  • Fill Order: An order that attempts to match to existing orders in the order book immediately.

    • Fill-or-Kill (FOK): An order that must be completely filled immediately, otherwise it is canceled.

    • Immediate-or-Cancel (IOC): An order that is filled immediately if possible, with any remaining portion canceled.

  • Order Book: A collection of all open buy and sell orders for a specific trading pair, organized by price level.

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Units

  • Decimal: The decimal precision in which token quantities are measured. For example, USDC typically has 6 decimals, meaning the smallest positive quantity is 0.000001 USDC.

  • Atom: A token quantity measured in terms of its highest precision. Continuing from the example above, 1 USDC atom is 0.000001 USDC. For example, 0.01 USDC is equal to 10,000 USDC atoms.

  • Unit: A token quantity measured in its usual representation. For example, 100 USDC is equal to 100 USDC units.

  • Lot: A custom token quantity defined by the market creator, representing the minimum tradable quantity. For example, if the lot size is 0.01 USDC, then 1 lot is 0.01 USDC.

  • Lot Size: The number of atoms in a lot. For example, if a lot is 0.01 USDC, then the lot size is 10,000 atoms.

  • Tick Size: The price increment that the market uses, expressed in quote lots per base unit. For example, for an ETH/USDC pair, if a lot is 0.001 USDC (lot size is 1,000) and the price increment is 0.01 USDC per ETH, the tick size is 10 (quote lots per base unit). A price of 15 USDC per ETH is 1,500 ticks.

Red-Black TreeUnits System