12 USEFUL DISTINCTIONS
Similar words. Different mechanisms.
Compare what each concept does, what the numbers mean, and which risks remain.
Staking vs lending
Both may generate more units. The underlying work and obligations are different.
Staking vs LendingDISTINCTION 02APR vs APY
The difference is compounding, under explicitly stated assumptions.
APR vs APYDISTINCTION 03Price impact vs slippage tolerance
One describes how a trade moves a market. The other constrains acceptable execution.
Price impact vs Slippage toleranceDISTINCTION 04Borrow limit vs liquidation threshold
Capacity to open debt and eligibility for forced repayment are different boundaries.
Borrow limit vs Liquidation thresholdDISTINCTION 05Liquidation vs insolvency
A risk-control action is different from a balance-sheet shortfall.
Liquidation vs InsolvencyDISTINCTION 06Self-custody vs custodial accounts
Start with who can authorize a transfer, then examine the recovery and failure model.
Self-custody vs Custodial accountDISTINCTION 07Proof of work vs proof of stake
Two ways to weight participation in choosing a shared history.
Proof of work vs Proof of stakeDISTINCTION 08AMM vs order book
A reserve pricing rule and a set of executable orders organize liquidity differently.
Automated market maker vs Order bookDISTINCTION 09Liquid staking vs restaking
A transferable receipt and an additional security commitment solve different problems.
Liquid staking vs RestakingDISTINCTION 10Optimistic vs validity rollups
Different ways to establish that an offchain state transition is acceptable.
Optimistic rollup vs Validity rollupDISTINCTION 11Backing value vs market price
What supports a token and what a buyer currently pays are different measurements.
Backing or claim value vs Market priceDISTINCTION 12Holding vs providing liquidity
Compare final wealth using the same starting assets and final prices.
Hold the starting assets vs Provide liquidity