Arbitrage

An uncollateralized loan that must be borrowed and repaid within a single atomic blockchain transaction. If the borrower cannot repay the loan plus fees by the end of the transaction, the entire transaction reverts as if it never happened — the blockchain's atomicity guarantee eliminates default risk for the lender. Flash loans enable capital-efficient arbitrage, collateral swaps, and self-liquidation without requiring any upfront capital.

The maximum value that can be extracted from block production beyond standard block rewards and gas fees by including, excluding, or reordering transactions within a block. MEV is extracted by validators and specialized 'searchers' who identify profitable opportunities like arbitrage, liquidations, and sandwich attacks. The MEV ecosystem has evolved to include builder-searcher separation (MEV-Boost) to reduce negative externalities.

A cryptocurrency exchange that operates without a central authority, using smart contracts to enable peer-to-peer trading directly from users' wallets. DEXs never take custody of user funds. Most DEXs use automated market maker (AMM) models with liquidity pools, though some use on-chain order books.

The buying and selling of cryptocurrencies with the goal of generating profit from price movements. Crypto trading occurs on centralized exchanges (using order books), decentralized exchanges (using liquidity pools), and via derivatives platforms. Common strategies include spot trading (buying/selling actual assets), margin trading (using leverage), and derivatives trading (futures, perpetuals, options).