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Neuromodulator is a relatively new concept. It can be conceptualized as a neurotransmitter that is not absorbed by pre-synaptic neuron or broken down into metabolites. Neuromodulators like that end up spending a large amount of time in the CSF (cerebrospinal fluid), influence (or modulating) the overall level of brain activity. For this reason, several neurotransmitters are also considered as neuromodulators, such as serotonin and acetylcholine.
Neuromodulation is often contrasted with the classical fast synaptic transmission. In both cases the transmitter works on local postsynaptic receptors, but in neuromodulation usually 7-membrane receptor that includes the G-protein coupled receptors, while in the second case they are ligand-gated ion channel. Former type of synaptic transmission often involve effects on voltage-gated ion channels, and quite slow. The latter type is much faster. Related differences are also sometimes drawn between the modulator and the synaptic inputs to neurons driver, but here the emphasis is on ongoing modulation of neuronal spiking vs. spiking causing it.