What is lye?
Many people only make solid bar soap, and it's easy for those soap makers to get the impression that the word "lye" means only sodium hydroxide (NaOH).
Problem is, liquid soap makers talk about "lye" too -- but these soapers use the word "lye" to mean potassium hydroxide (KOH).
So ... what is lye ... really?
Speaking strictly, the word "lye" means any solution (liquid mixture) of any alkaline chemical (alkali) that can be used to make soap.
The most common alkali for soap making is sodium hydroxide, and it is usually used to make solid bar soap. NaOH and sodium hydroxide and caustic soda are all names for this chemical.
Potassium hydroxide is the second-most common alkali for soap making. Potassium hydroxide is commonly used to make liquid soap, shave soap, and cream soap, but it is sometimes found in bar soap recipes too. KOH and potassium hydroxide and caustic potash are all names for this chemical.
There are other alkalis that can also be used to make soap, such as sodium carbonate (Na2CO3, soda ash, washing soda, or soda), potassium carbonate (K2CO3, potash), ammonium hydroxide (NH4OH, ammonia), and even sodium bicarbonate (NaHCO3, baking soda).
When made into a liquid solution, any of these alkali chemicals can be called "lye." Can you see why using just the word "lye" could be confusing?
If the type of alkali being talked about is obvious from the context of the discussion, it's fine to use the word "lye" in an informal way. I do it; we all do it.
But if there is any doubt about what alkali chemical you are talking about or if the conversation is about the solid alkali versus the liquid mixture, it's always best to spell things out to avoid any confusion. Use the full chemical name of the alkali (sodium hydroxide, potassium hydroxide, etc.) or its abbreviation (NaOH, KOH, etc.), rather than just the word "lye."