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Onchain Economics
DeFi Primitives

Peer-to-Peer(P2P)

A network architecture where participants interact directly with each other without central intermediaries.

In-Depth Explanation

P2P networks form the backbone of cryptocurrency: Bitcoin nodes connect directly to share transactions and blocks. In DeFi, P2P can mean direct trading without a traditional exchange (though AMMs technically intermediate through smart contracts). P2P architectures enhance censorship resistance but can introduce coordination challenges.

Related Terms

Decentralized Exchange

DEX

A cryptocurrency exchange that operates through smart contracts without a central authority or custody of user funds.

Blockchain

A distributed, immutable ledger that records transactions across a network of computers using cryptographic linking.

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Automated Market Maker

AMM

A smart contract that provides liquidity and enables trading using a mathematical formula instead of an order book.

Liquidity Pool

LP

A smart contract holding paired assets that enables trading, lending, or other DeFi activities.

Collateralized Debt Position

CDP

A loan where users deposit collateral to mint or borrow assets, with liquidation risk if collateral value falls.

Lending Protocol

A DeFi application that matches lenders with borrowers through smart contracts, enabling permissionless borrowing and lending.

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