# Glossary

### Automated Market Maker (AMM):

A type of decentralized exchange protocol that relies on a mathematical formula to price assets. As with many other AMMs, we use the constant product market maker formula <mark style="color:blue;">`y*x=k`</mark> to price assets.&#x20;

### Liquidity Provider (LP)

LPs are users that deposit liquidity into a pair and receive liquidity tokens. LPs help support healthy markets and are compensated with revenue earned from swap fees, and sometimes, incentives from DAOs.

### Liquidity Pools

Pools represent the active liquidity in the pair owned by liquidity providers. Pools dictate the swap ratio, or marginal price, between two assets.&#x20;

### Reservoirs

Reservoirs are a novel concept pioneered by Buttonwood that represents the inactive liquidity in an asset pair. Reservoirs allow Poolside to maintain a consistent swap ratio and protect liquidity providers from an impermanent loss caused by arbitrage.&#x20;

### Liquid Staking Tokens

Tokens that allow users to access the liquidity of their staked assets.&#x20;

### Rebase Tokens

Tokens that have balances that can change uniformly across all holders based on predetermined rules or external factors.&#x20;

### Value Accruing Assets

Tokens that appreciate in value based on an increasing exchange rate (rETH, swETH). &#x20;


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