Key terms and concepts used throughout Orca’s documentation.
This glossary is informational only and does not provide financial, tax, accounting, or investment advice. DeFi activity involves risk, including token price movement, impermanent loss, smart contract risk, slippage, transaction costs, and changing market conditions.
Asset Allocation
Asset allocation describes how assets are distributed across different holdings, asset types, or strategies.
In the context of DeFi, this may include how a user chooses to hold tokens, provide liquidity, stake, lend, or use other protocols. Asset allocation decisions are personal and depend on each user’s own circumstances, goals, risk tolerance, and time horizon.
Deposit Ratio
Deposit ratio is the ratio of the two tokens required for a liquidity position.
For in-range concentrated liquidity positions, the required deposit ratio depends on the current pool price and the selected price range. If the current price is outside the selected range, the position may require only one of the two tokens.
Diversification
Diversification generally refers to distributing exposure across multiple assets, markets, protocols, or position types rather than concentrating exposure in one place.
In DeFi, diversification may include holding different tokens, using different protocols, or creating multiple liquidity positions across different pools or price ranges.
Diversification does not remove risk. It may change the types of risks a user is exposed to, and outcomes still depend on market conditions, token prices, protocol risk, and user decisions.
Divergence Loss
Divergence loss, also known as impermanent loss, describes the difference between providing liquidity and simply holding the deposited tokens as their relative prices change.
For liquidity providers, divergence loss can affect position value. Accrued fees and rewards, where available, may offset some or all of this difference, but this is not guaranteed.
In concentrated liquidity pools, the effects of price movement can be larger because liquidity is allocated within selected price ranges.
Estimated Yield
Estimated Yield is an informational display metric based on available pool data, such as recent trading activity, fee accrual, rewards, and the selected position range.
Estimated Yield is not a prediction or guarantee. Actual results can differ due to price movement, trading volume, liquidity changes, reward changes, time in range, slippage, transaction costs, and market conditions.
Fee Rate
Fee rate is the percentage fee applied to swaps that use a pool.
For fixed-fee pools, the fee rate is set by the pool’s fee tier. For Adaptive Fee Pools, the selected fee tier acts as the base fee, and the effective fee may change based on price movement or volatility conditions.
In Range and Out of Range
In a concentrated liquidity pool, a liquidity provider selects the price range where their liquidity is active.
A position is in range when the current pool price is within the selected price range. While in range, the position may accrue swap fees when swaps use its liquidity, and may accrue rewards if the pool has active rewards and the position is eligible.
A position is out of range when the current pool price is outside the selected price range. While out of range, the position does not accrue swap fees and may become fully one-sided in token composition.
If the pool price later moves back into the selected range, the position may begin accruing swap fees again when swaps use its liquidity.
Leverage
In Orca’s liquidity interface, leverage describes how concentrated a position is relative to full-range liquidity.
For example, a higher leverage value means liquidity is concentrated across a narrower price range. This can increase the position’s share of active liquidity within that range, but it can also increase sensitivity to price movement and divergence loss.
Leverage in this context does not mean borrowed funds.
NFT Mint Address
Each Orca liquidity position is represented by a unique NFT rather than fungible pool tokens.
The NFT mint address identifies the NFT that represents the liquidity position. Whoever controls the position NFT controls the liquidity position it represents.
Do not sell, transfer, or burn a position NFT unless you intend to transfer ownership of the position or permanently give up access to it.
Price Range
Price range is the lower and upper price bound selected for a concentrated liquidity position.
Liquidity is active only when the current pool price is within this range. If price moves outside the selected range, the position stops accruing swap fees while out of range and may become fully one-sided.
Risk Tolerance
Risk tolerance describes how much uncertainty, volatility, or potential loss a user is willing and able to accept.
In DeFi, relevant risks may include token price changes, impermanent loss, smart contract risk, slippage, transaction costs, liquidity conditions, and protocol or market changes.
Risk tolerance is personal. Users should review the risks of any DeFi activity and consult appropriate professional advisers where needed.
Tick Spacing
Tick spacing defines the interval between usable ticks in a concentrated liquidity pool.
Ticks are discrete price points used to define position ranges. Smaller tick spacing allows more granular price ranges. Larger tick spacing means usable ticks are farther apart.
On Orca, tick spacing is associated with the pool’s fee tier and pool configuration. 