Market Primitives

Definition ∞ Market primitives are fundamental, basic components or operations that serve as the building blocks for more complex financial instruments and markets. These core elements include assets, prices, and trading mechanisms. They enable the creation of diverse economic structures and form the foundation upon which market functionality is constructed.
Context ∞ In decentralized finance (DeFi), market primitives refer to the core smart contract functions and tokens that permit lending, borrowing, trading, and other financial activities on a blockchain. Understanding these basic components is crucial for comprehending how DeFi protocols operate and how new financial applications are developed. News often discusses the innovation and interoperability of these primitives as the DeFi ecosystem advances.