What is Spread? (memecoin term explained)

Spread is the gap between the best buy price and the best sell price. On thin AMM pools it widens, meaning you lose value the instant you round-trip.

Definition: Spread

Spread is the gap between the best buy price and the best sell price. On thin AMM pools it widens, meaning you lose value the instant you round-trip.

Key idea — A wide spread is an immediate, guaranteed cost. On illiquid memecoins it can be large enough to put you underwater the moment you buy.

Why it matters to memecoin traders

A wide spread is an immediate, guaranteed cost. On illiquid memecoins it can be large enough to put you underwater the moment you buy.

Key things to know about spread

Quoted in basis points (bps): 100 bps = 1%.
Thin liquidity widens the spread; deep liquidity tightens it.
You "cross the spread" twice on a round trip.
A wide spread means you start every trade at a loss.
Combine spread with price impact to estimate true entry/exit cost.

What to watch out for

Watch out — On a microcap with a wide spread, you can be down several percent before the price even moves. Factor the round-trip spread into every entry.

Spread FAQ

Is spread something beginners need to understand?

Yes — A wide spread is an immediate, guaranteed cost. On illiquid memecoins it can be large enough to put you underwater the moment you buy.

Where do I see spread in practice?

Quoted in basis points (bps): 100 bps = 1%. Thin liquidity widens the spread; deep liquidity tightens it.

Knowing the theory is great. Catching it live is better.

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Education only — not financial advice. Memecoins are extremely high risk.