Definition of Terms
Understand Key Trading and Platform Concepts.
Crypto and DeFi can be complex. This section breaks down the important terms you’ll encounter on VDEX—like leverage, omnichain, MEV, self-custody, and more—so you always know what you’re d
Here are Some Specific Terms
Omnichain – The ability to trade across multiple blockchains without needing to bridge assets manually.
Full Self-Custody – You control your funds at all times; no one else can access or move them.
ZeroGas Trading – Trading without paying blockchain gas fees.
Sub-Millisecond Finality – Trades execute instantly, faster than a blink, with no waiting for block confirmations.
Sustainable BTC Yield – Earning passive income on Bitcoin without risking impermanent loss.
No KYC – No personal identity verification is needed to use the platform.
No VPN Restrictions – No need for VPNs; the platform is open and available globally, including the U.S.
Virtual Rollup – A system that separates trade execution from fund custody to achieve speed without losing security.
ZK State Channels – Off-chain trading lanes that settle later on-chain using zero-knowledge proofs.
Unified Liquidity Layer – A shared pool of funds across different blockchains, allowing seamless trading.
Virtual Market Maker (VMM) – A community-run pool that provides liquidity and handles liquidations.
Virtual Insurance Pool (VIP) – A fund that covers losses from liquidations to protect traders and the platform.
Decentralized Limit Order Book (DLOB) – An order book where users place bids and asks like a centralized exchange, but it’s fully decentralized.
Partial Liquidation – Only a portion of your position is closed if margin falls low, rather than liquidating your entire account.
Trustless Withdrawals – Ability to withdraw funds even if the platform is down, using blockchain proofs.
MEV Protection – Protection from bots that manipulate transactions to profit from your orders.
Fraud-Proof Window – A 24-hour period where users can challenge invalid liquidations.
BTC & ETH Collateral – The ability to use Bitcoin and Ethereum as margin to trade derivatives.
Schnorr Signature – An efficient cryptographic signature used to verify trades and settlements.
Settlement Layer – The blockchain where final trade records and fund transfers are confirmed.
Escrow – Funds locked in a smart contract until certain conditions are met.
Virtual Nodes – User-run systems that validate trades off-chain within state channels.
Chain Abstraction – Hiding blockchain complexities so traders don’t need to worry about which network they are using.
General Trading & Perpetual Contracts Terms
Perpetual Contract (Perps) – A futures contract with no expiry date, allowing traders to hold positions indefinitely.
Leverage – Borrowing funds to increase your trading position size (e.g., 10x leverage means controlling $10,000 with $1,000).
Margin – The collateral you deposit to open a leveraged position.
Initial Margin – The minimum amount required to open a position.
Maintenance Margin – The minimum balance required to keep a position open before liquidation occurs.
Liquidation – Automatic closing of a position when margin is insufficient to cover losses.
Partial Liquidation – Closing only a portion of your position instead of the entire position.
Long Position – Betting that the price will go up.
Short Position – Betting that the price will go down.
Order Book – A list of buy and sell orders showing prices and amounts traders are willing to exchange.
Bid Price – The highest price a buyer is willing to pay for an asset.
Ask Price – The lowest price a seller is willing to accept.
Spread – The difference between the bid and ask price.
Limit Order – An order to buy or sell at a specific price or better.
Market Order – An order to buy or sell immediately at the best available price.
Stop Loss – An automatic order to close a position when the price hits a specific level to limit losses.
Take Profit – An automatic order to close a position when the price reaches a certain level to secure profits.
Entry Price – The price at which you open a position.
Exit Price – The price at which you close a position.
PNL (Profit and Loss) – The gain or loss from a trading position.
ROE (Return on Equity) – The percentage gain or loss based on your margin.
Open Interest – The total value of all active (unsettled) positions in a market.
Funding Rate – A fee exchanged between long and short traders to ensure the perp contract price aligns with the spot market.
Index Price – A price derived from multiple spot markets to ensure a fair value reference for perps.
Slippage – The difference between the expected price and the actual price at which a trade is executed.
Liquidity – The availability of buy and sell orders in the market; high liquidity means easier and faster trade execution.
Position Size – The total value of your open position.
Cross Margin – Using your entire account balance to back multiple positions.
Isolated Margin – Limiting margin to a single position, reducing risk to your overall account.
Liquidation Price – The price at which your position will be liquidated due to insufficient margin.
Hedging – Opening a position to offset potential losses in another position.
Volatility – The degree of price fluctuation in a market over time.
Execution Speed – How fast your order is processed and filled.
Arbitrage – Exploiting price differences between markets to make a profit.
Maker Order – An order that adds liquidity to the order book and may earn a rebate.
Taker Order – An order that removes liquidity from the order book and usually incurs a fee.
Liquidity Provider – An individual or institution that places orders to improve market depth.
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