Glossary
Stop-Loss
An order that triggers a market or limit sale once the price falls to a chosen level — caps the downside on a position automatically.
A stop-loss is an instruction to sell (close a long) or buy (close a short) once the asset reaches a specific trigger price. Once triggered, the stop becomes a market order (stop-market) or a limit order (stop-limit).
Stop-losses are the standard risk-management primitive on every trading venue. On-chain stops are harder to implement than on a CEX because they require a continuously monitoring keeper to execute at the right block; intent-based DEXes and perp DEXes have made on-chain stops increasingly reliable.