THE REFERENCE DESK / 14 DEFINITIONS
Meteora Glossary
Plain-English definitions for the terms used across our guides. New to DLMM? Start with the beginner's guide.
- Active bin
- The bin where the current market price sits. Only liquidity in or near the active bin earns fees and gets swapped against. If price leaves your range entirely, you stop earning until it returns (or you rebalance).
- APR vs APY
- APR is the annualized fee rate without compounding; APY assumes reinvestment. On DLMM dashboards both are estimates based on recent volume and can swing hard with volatility.
- Bin
- One price step in the liquidity book. Each bin has a fixed width set by the pool's bin step (e.g. 0.01%). When price trades inside a bin, LPs in that bin earn the swap fee.
- Bin step
- The price width between adjacent bins, expressed as a percentage. Small steps (e.g. 1 bps) suit stable pairs; wide steps (e.g. 200+ bps) suit volatile pairs.
- DLMM (Dynamic Liquidity Market Maker)
- Meteora's flagship AMM design. Instead of a constant-product curve, liquidity is deposited into discrete price bins in a liquidity book. Fees concentrate where trading actually happens, which is why DLMM pools often out-earn classic AMM pools for the same pair.
- Fee tier
- The share of each swap fee routed to LPs, set per pool alongside the bin step. Higher fee tiers pair with wider steps and more volatile pairs; lower tiers suit stable pairs.
- Impermanent loss (IL)
- The gap between your LP position's value and simply holding the two tokens. On asymmetric or trending pairs it can exceed fees earned. IL is real even if the dashboard does not show it.
- Liquidity book
- The data structure behind DLMM: an ordered list of price bins, each holding its own liquidity. Price moves by trading against the liquidity in the current bin, then stepping to the next bin.
- One-sided liquidity
- Depositing only one token so your position only converts into the other token as price moves into your range. Used for DCA-style entries and bid/ask strategies.
- Out of range
- When price moves past the edge of your position. Your liquidity becomes one-sided (all of one token), you stop earning fees, and you hold directional exposure until price returns or you rebalance.
- Range / position
- The span of bins you deposit liquidity across. A tight range earns more fees when price stays inside it but risks falling out of range; a wide range earns less but keeps working through bigger moves.
- Rebalancing
- Closing and re-opening a position when price moves out of range, restoring fee-earning liquidity around the new price. Each rebalance costs swaps and resets fee accrual, so frequency is a tradeoff.
- Referral kickback
- Meteora's program where users who sign up with a referrer's code (e.g. UTT9PXJFGW) earn a 2% kickback on fees from their eligible liquidity positions, paid in USDC.
- Stable pair
- A pool between two tokens pegged near parity (USDC/USDT, SOL/USDT-like strategies). Tight bin ranges and low fee tiers make these steady single-digit-APR earners with minimal IL.
Questions this glossary does not cover? Check the FAQ.