This glossary defines the crypto market making terms token projects run into most often — from order book mechanics to the deal structures market makers propose. Definitions are deliberately short and plain; where we have a deeper guide, the term links to it.
Bookmark this page as a reference for TGE planning, exchange conversations, and reading a market maker's contract.
Order book basics
- Order book — The live list of all outstanding buy and sell orders for a token on an exchange, sorted by price.
- Bid — An order to buy at a specified price. The highest bid is the most anyone is currently willing to pay.
- Ask (offer) — An order to sell at a specified price. The lowest ask is the cheapest a token is currently available for.
- Bid-ask spread — The gap between the best bid and the best ask. Tighter spreads mean cheaper trading and a healthier market. See What Is Crypto Market Making?
- Mid price — The midpoint between the best bid and best ask, commonly used as the reference "current price."
- Depth — How much size is resting in the order book near the current price. Deep books absorb large orders with little movement.
- Level 2 data — The full view of the order book beyond the top of book, showing size stacked at each price level.
Orders and roles
- Limit order — An order to buy or sell at a set price or better. It rests on the book until filled or cancelled.
- Market order — An order to buy or sell immediately at whatever prices are available, consuming resting liquidity.
- Maker — A trader whose limit order adds liquidity to the book. See Market Maker vs. Market Taker
- Taker — A trader whose order removes liquidity by matching a resting order immediately.
- Market maker — A firm or system that continuously quotes both bids and asks to keep a token liquid and its spread tight. See How to Choose a Crypto Market Maker
- Two-sided quote — Posting a bid and an ask at the same time, the core activity of market making.
- Quote uptime — The percentage of time a market maker actually has live orders in the book. Higher uptime means more reliable liquidity.
Liquidity and price movement
- Liquidity — How easily a token can be bought or sold without moving its price. See How Much Liquidity Does Your Token Need Before TGE?
- Slippage — The difference between the expected price of a trade and the price it actually executes at. See Slippage Explained
- Price impact — How much a single order moves the market price; large orders on thin books cause high impact.
- Volatility — The degree to which a token's price fluctuates over time.
- Inventory — The token and stablecoin balances a market maker holds to be able to quote both sides.
Venues and mechanisms
- CEX (centralized exchange) — An exchange that runs an order book and custodies user funds, such as Binance, OKX, or Bybit. See How to Get Listed on a CEX
- DEX (decentralized exchange) — An on-chain exchange where trades settle via smart contracts rather than a central operator.
- AMM (automated market maker) — A DEX design that prices trades from a formula against a pooled reserve instead of an order book.
- Liquidity pool — The paired token reserves that back an AMM and that traders swap against.
- TVL (total value locked) — The total value of assets deposited in a protocol or pool; a measure of scale, not the same as tradable order book liquidity.
Volume and market health
- Volume — The total amount of a token traded over a period, usually reported per 24 hours.
- Organic volume — Trading that reflects genuine, independent buying and selling interest.
- Wash trading — Fake volume created by trading with yourself to inflate activity; exchanges and analytics platforms flag it. See Wash Trading vs. Legitimate Volume
- Volume-to-liquidity ratio — Daily volume compared to order book depth; an unusually high ratio is a common wash-trading signal.
- Holder concentration — How much of a token's supply sits in a few wallets; high concentration is a liquidity and dump risk. See What Is Bubblemaps?
Launch and deal terms
- TGE (token generation event) — The moment a token is created and first becomes transferable, usually aligned with launch and listing. See Token Launch Checklist
- Listing — Adding a token to an exchange so it can be traded there; many listings require a market making commitment.
- Market making commitment — A formal agreement to provide liquidity to a given standard (spread, depth, uptime), often required by exchanges.
- Retainer (monthly fee) — A fixed recurring fee paid to a market maker for their service. See How Much Does a Crypto Market Maker Cost?
- Token loan model — A deal where the project lends tokens to the market maker to quote with, instead of (or alongside) a cash fee.
- Call option — In a loan deal, the market maker's right to buy the loaned tokens later at a preset price; a common form of compensation.
- KPI report — The periodic metrics a market maker shares — spread, depth, uptime, volume — to prove the service is being delivered.
Which terms actually matter
If you only track a handful, track these four: spread and depth describe the quality of your market, uptime describes how reliably it is maintained, and the KPI report is how you verify all three. Everything else in this glossary supports understanding those.
Ready to put real liquidity behind your token? These terms are the vocabulary of that conversation — and where we come in.
