Volume Weighted Average Price (VWAP) represents the average price of an asset with the price weighted according to the volume of each trade over a specified period of time.

VWAP is an important concept in trading, as it can provide insight into the performance and value of a particular asset. VWAP is typically calculated by taking the sum of the prices of the asset at regular intervals over a specified period of time, and then dividing that sum by the total volume of the asset traded over the same period of time. This produces an average price for the asset that reflects both the changes in its price and the volume of trades over the specified period of time.

VWAP is often used in DeFi as a reference point for other financial instruments, such as futures contracts or options. These instruments are often based on the VWAP of the underlying asset, and they can provide investors with additional ways to gain exposure to the DeFi market and to hedge their risks.

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