AMM vocabulary on Solana: what pool screens actually label

When someone opens a Raydium or Orca pool page for the first time, the immediate hurdle is rarely the maths — it is the stack of labels. Liquidity, LP token, fee tier, and price impact each sit in different corners of the interface, and documentation often assumes you already know which noun refers to which actor.

We start every AMM vocabulary module by separating pool (the smart contract holding two token reserves) from pair (the two assets you are trading between). On Solana, the pool address is what explorers link to; the pair name is what humans read. Learners who conflate the two misread APY figures because they think the percentage applies to a wallet balance rather than to liquidity provided.

Slippage tolerance is the next term that causes friction. It is not a fee paid to the protocol. It is the maximum price movement you accept before the router aborts the swap. We demonstrate this with a thin pool example: a £50 trade might show negligible impact, while the same trade in an illiquid pool triggers a warning. Seeing the warning appear live fixes the definition faster than any flashcard.

Impermanent loss deserves its own sentence in every glossary because the name sounds temporary in a reassuring way. We describe it as the difference between holding the two tokens separately versus depositing them as LP, measured when you withdraw. The loss is "impermanent" only while you remain in the pool and prices return to your entry ratio.

Fee tiers on concentrated liquidity pools confuse people who learned DeFi on constant-product AMMs. We map tick spacing to fee tier on Orca Whirlpools so learners know why two USDC/SOL pools beside each other carry different percentages.

If you are preparing for a vocabulary intensive, bring one pool URL you have avoided clicking. We will read it together and mark which labels are cosmetic and which change transaction behaviour.