Unit of measurement equal to 0.01% (one hundredth of a percentage point). 100 bps = 1%. Used across DeFi for swap fees, protocol fees, and yield spreads. Token-2022's transfer fee extension configures fees in basis points.
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Unit of measurement equal to 0.01% (one hundredth of a percentage point). 100 bps = 1%. Used across DeFi for swap fees, protocol fees, and yield spreads. Token-2022's transfer fee extension configures fees in basis points.
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Think of it as a market mechanic used to price, route, or move capital through liquidity apps.
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AMMs, routing, liquidity, lending, and trading infrastructure.
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Basis Points (basis-points) Category: DeFi Definition: Unit of measurement equal to 0.01% (one hundredth of a percentage point). 100 bps = 1%. Used across DeFi for swap fees, protocol fees, and yield spreads. Token-2022's transfer fee extension configures fees in basis points. Aliases: bps Related: Transfer Fee Extension, APY (Annual Percentage Yield), APR (Annual Percentage Rate), Seller Fee Basis Points
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A Token-2022 extension that automatically withholds a percentage of every transfer as a fee. The fee (basis points + max fee) is configured on the mint by the transfer fee authority. Withheld fees accumulate in recipient token accounts and can be harvested by the withdraw authority. Enables on-chain royalties for fungible tokens.
The real rate of return earned on a deposit or investment over one year, including the effect of compounding interest. Unlike APR, APY accounts for interest being reinvested and earning additional interest over time. In DeFi, APY figures are often projected from short-term returns and can fluctuate significantly. A 10% APY means a deposit grows by 10% over a year if rates remain constant and rewards are continuously compounded.
The simple annual interest rate earned on a deposit or paid on a loan, without accounting for compounding. APR represents the base rate before reinvestment of earnings. In DeFi lending protocols, APR is the straightforward percentage you earn or owe per year. APR is always lower than or equal to APY for the same rate, because APY includes the compounding effect. A 10% APR on 1000 SOL means you earn exactly 100 SOL over a year.
A field in Metaplex NFT metadata that specifies the creator royalty percentage on secondary sales, denominated in basis points (100 = 1%). For example, 500 means a 5% royalty split among the creators array according to their share percentages. Enforcement varies by marketplace—some honor royalties voluntarily, while programmable NFTs (pNFTs) enforce them at the protocol level.
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A gamified incentive mechanism where protocols award off-chain loyalty points for specific on-chain actions across time-limited campaign periods called 'seasons.' Points are typically converted to token allocations at a later token generation event (TGE). The off-chain and opaque nature of points tracking has drawn criticism for lack of transparency and sybil vulnerability.
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A Token-2022 extension that automatically withholds a percentage of every transfer as a fee. The fee (basis points + max fee) is configured on the mint by the transfer fee authority. Withheld fees accumulate in recipient token accounts and can be harvested by the withdraw authority. Enables on-chain royalties for fungible tokens.
The real rate of return earned on a deposit or investment over one year, including the effect of compounding interest. Unlike APR, APY accounts for interest being reinvested and earning additional interest over time. In DeFi, APY figures are often projected from short-term returns and can fluctuate significantly. A 10% APY means a deposit grows by 10% over a year if rates remain constant and rewards are continuously compounded.
The simple annual interest rate earned on a deposit or paid on a loan, without accounting for compounding. APR represents the base rate before reinvestment of earnings. In DeFi lending protocols, APR is the straightforward percentage you earn or owe per year. APR is always lower than or equal to APY for the same rate, because APY includes the compounding effect. A 10% APR on 1000 SOL means you earn exactly 100 SOL over a year.
A field in Metaplex NFT metadata that specifies the creator royalty percentage on secondary sales, denominated in basis points (100 = 1%). For example, 500 means a 5% royalty split among the creators array according to their share percentages. Enforcement varies by marketplace—some honor royalties voluntarily, while programmable NFTs (pNFTs) enforce them at the protocol level.
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A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
A token issued to liquidity providers representing their proportional share of a pool's reserves and accrued fees. LP tokens can be burned to withdraw the underlying assets. The value of LP tokens changes as the pool's token ratios shift and fees accumulate. LP tokens are often stakeable in yield farming programs for additional rewards.