Crypto Glossary

Altcoin: Used to describe cryptocurrency other than Bitcoin. These include digital assets like Ethereum, Solana, Pol (ex-Matic), and ARB.

Airdrop: One of the most popular terms in the cryptocurrency space. Cryptocurrency projects use it to gain visibility for new tokens by giving out the tokens to eligible participants. Usually, users must do specific tasks like following an account, holding a token, or liking Twitter posts.

Atomic Swap: A technology crypto platform used to facilitate the exchange of cryptocurrencies directly between parties without intermediaries.

Address: This refers to the unique string of characters crypto exchanges generate for users to receive and send cryptocurrency.

Arbitrage: Buying and selling digital assets in different markets or on different exchanges to profit from price discrepancies.

ATH: The highest price a cryptocurrency has ever reached since its launch. For instance, the ATH for BTC at the time of writing is

ATL: The lowest price a cryptocurrency has ever reached since its launch. For instance, the ATL for BTC at the time of writing is

Anonymity set: The measure of the level of privacy enjoyed by transactions within a blockchain network based on how many users could have sent it or who can view all the transaction details.

AMM (Automated Market Maker): A type of decentralized exchange (DEX) that uses algorithms and liquidity pools to allow trading without traditional order books.

APY (Annual Percentage Yield): The yearly interest earned on crypto holdings or staking rewards is expressed as a percentage.

Batch: Refers to a summary bundle of transactions rolled up into a batch on L2 and sent to L1 for finalization.

Blockchain: A decentralized ledger that records all transactions across a network of computers.

Block reward: It is an incentive given to validators or miners for adding a new block to the blockchain

Bitcoin: Also referred to as the index coin, Bitcoin ($BTC) is the first cryptocurrency created in 2009 by an anonymous entity known as Satoshi Nakamoto.

Block: Block captures transaction data that is to be confirmed by the system validators and added to the blockchain

Burning: One of the methods used by crypto projects to increase token value is permanently removing a percentage of their tokens for circulation to decrease supply.

Bulls & Bears: Two of the most popular crypto brands used to describe market sentiment. Bull indicates rising prices, while Bear indicates falling prices.

Bridge: Protocols or tools that connect two different blockchains, e.g. Ethereum and Solana, allowing users to transfer assets directly between the two blockchains

Centralized Exchanges: Centralized Exchanges (CEXs) are cryptocurrency trading platforms that operate under the control of a single entity. They allow traders to complete the exchange of cryptocurrencies and may also feature the exchange of fiat currencies through the platform. On a centralized exchange, a user is expected to deposit funds into the custody of the centralized entity, the exchange then manages the trading process, order matching and also keeps funds in custody on behalf of the traders. Examples of centralized exchanges include Binance, Kraken, Bybit, Coinbase.

Chain ID: A unique identifier for a specific blockchain network to prevent replay attacks in cross-chain interactions.

Circulating supply: The number of cryptocurrencies publicly available for trading in the crypto market.

Consensus Mechanism: A protocol used by blockchain to consider transaction validity before adding it to the blockchain.

Cold Wallet: A cryptocurrency wallet that is not connected to the internet. It is considered to be more secure and less prone to exploitation.

Cryptography: Using mathematical techniques to encrypt data by transforming data into an unreadable format to prevent unauthorized users from accessing it and ensure confidentiality, integrity, and authenticity.

Collateral: In the crypto space, collateral is a digital asset pledged by a borrower on a lending platform as security for a loan.

Confirmation: The process of verifying the correctness or validity of a transaction before adding it to the blockchain.

Consensus Layer: The part of a blockchain that handles agreement among participants on the state of the network (e.g., Ethereum’s PoS layer).

Cryptocurrency: Digital or virtual currency that uses cryptography for security.

Custodial Wallet: A wallet where a third party holds the private keys on behalf of the users.

dApp: Decentralized Applications run on a blockchain network to perform several transactions and empower with considerable control using the decentralized nature of blockchain.

DAO: Decentralized Autonomous Organization is used by several ecosystems to give controlling and decision-making power to members using rules encoded into computer programs. Usually, members are required to hold the ecosystem governance token to participate.

Decentralized Finance: Financial services that use blockchain smart contracts to facilitate peer-to-peer transactions by eliminating intermediaries.

Decentralization: A system of control that distributes authority, data, storage, and operation across a network to reduce or eliminate reliance on a central entity.

Decentralized Exchanges (DEXs): A decentralized exchange is a peer-to-peer cryptocurrency trading platform that allows users to trade cryptocurrencies directly from their wallets. It does not feature a centralized authority for control and custody, instead, it relies on smart contracts to automate transaction completion. Examples of DEXs include Uniswap, PancakeSwap, and SushiSwap.

Dedicated Nodes: Dedicated nodes refer to specialized servers or computers within a blockchain network that perform specific tasks. Tasks may include transaction validation, block creation or granting API access; the main feature is that the node is dedicated to supporting a particular user’s operation.

Depeg: When a coin, usually a stablecoin, loses its intended value. For instance, when a stablecoin pegged to the dollar falls below $1.

Delist: When a coin or token is permanently removed from a cryptocurrency marketplace or exchange, it usually means that traders can no longer buy or sell the coin or token on the platform.

Digital signature: A cryptographic method to prove a transaction was made by the owner of a wallet without revealing their private key.

Double Spending: When a cryptocurrency is spent more than once due to lack of proper verification.

Dump: Huge reduction in a coin or token price usually occurring after a massive sale by holders.

DYOR: It is a common acronym which fully means “Do Your Own Research.” It is used in the cryptocurrency community to encourage traders to conduct individual research before investing in a project or participating in a crypto ecosystem.

Ethereum: A blockchain platform launched in 2015 by Vitalik Buterin to enable developers to build and deploy smart contracts to build decentralized applications.

EVM (Ethereum Virtual Machine): A runtime environment for executing smart contracts on the Ethereum blockchain.

ERC-20: A technical standard for tokens created on the Ethereum blockchain, allowing them to interact with each other.

Ether ($ETH): The native cryptocurrency of the Ethereum network, used to pay for transactions and computational services.

Exchange: A platform where traders can buy and sell coins or tokens.

Escrow: A smart contract or service provider

Encryption: The process of converting information to unreadable data to enhance its security. Only users with the correct keys can access the readable version.

Fee Market: The system in which users compete to get their transactions included in a block by offering higher gas fees.

Finality: Blockchain finality is the stage after a transaction block has been validated and added to a blockchain. It shows that the transaction cannot be reversed or changed after it has been confirmed and recorded.

Floor price: The lowest price for an NFT in a collection

Flash Loan: A type of uncollateralized loan in DeFi that must be borrowed and repaid within the same blockchain transaction.

Flexible Staking: Flexible staking refers to a type of staking where users can stake and unstake their cryptocurrency assets at any time without a lock-up period. This allows greater liquidity and freedom compared to fixed or locked staking, although the rewards may be lower due to the added flexibility.

Fork: A change in blockchain protocol that can create a split, resulting in two separate versions of the blockchain.

FOMO (Fear of Missing Out): The feeling of potentially missing out on an opportunity in the crypto space is strong enough to spur traders to invest.

Front-running: When someone uses insider knowledge or faster execution to make trades before others, often seen in MEV on Ethereum.

Fractional NFT: This implies an NFT that is divided into several parts (fractions), allowing many people to own a fraction or part of the whole NFT.

FUD (Fear, Uncertainty, Doubt): A strategy to influence the perception of the majority of the market participants toward a particular project by spreading misleading or negative information.

Full Node: A computer that stores the entire blockchain and helps validate transactions and blocks.

Gas Fee: The transaction fee paid to miners for processing transactions on a blockchain network

Genesis Block: The first block in a blockchain. It serves as the foundation for all the subsequent blocks added to the chain.

Governance Token: A token that grants holders the right to vote and contribute to ecosystem decision-making.

GPU (Graphics Processing Unit): A component used in mining cryptocurrency to ensure faster computation compared to speed achieved using traditional CPUs.

Gas limit: This is the maximum amount a user is willing to offer as a gas fee to facilitate a transaction on the blockchain.

Gwei: A small unit of Ether used to measure gas fees. 1 ETH = 1 billion gwei.

Hash Rate: The measure of computational power per second used in crypto mining

Hard Fork: A significant change made to a blockchain protocol that results in a permanent divergence from the previous version of the blockchain.

HODL: A misspelling of "hold" that is now acceptable in the crypto space and used to describe keeping a token for the long term instead of selling.

Hot Wallet: A cryptocurrency wallet that is connected to the internet to facilitate easy access to fund

Halving: A systemic design used by Bitcoin to reduce the rewards for mining new blocks.

Hybrid consensus: A blockchain that combines the two consensus mechanisms, proof-of-stake and proof-of-work together.

ICO (Initial Coin Offering): A fundraising mechanism where new crypto is sold to investors

Interoperability: The ability of a blockchain system to allow transacting on and communicating with other blockchains.

Immutable: The ability of blockchain to render data stored on it tamper-resistance and unchangeable.

Index Coin: Used to describe the first cryptcurrency, i.e. Bitcoin ($BTC)

Index Fund: A type of investment fund that tracks a specific market index, including cryptocurrencies.

JOMO (Joy of Missing Out): The feeling of contentment when a trader avoids the stress of investing in volatile coins.

Just-in-Time (JIT) Liquidity: A system where liquidity is provided right when needed, often utilized in DeFi platforms.

KYC (Know Your Customer): A regulatory requirement that mandates crypto platforms to verify the identities of their users.

Keypair: A set of cryptographic keys consisting of a public key and a private key

Kill Switch: A feature that allows users to shut down an application or system to prevent further damage or loss.

Keeper: Used to describe market participants who enhance the stability of an ecosystem by holding the ecosystem token.

Layer 1: The base layer of blockchain, which includes its primary protocol and network. Popular blockchains like Bitcoin and Ethereum are Layer 1 blockchains that provide a base to build Layer 2.

Layer 2: The secondary framework built on the Layer 1 blockchain is designed to improve system efficiency and scalability.

Liquidity: The ease with which a crypto asset can be bought or sold in the market without necessarily affecting its price. It implies the availability of enough tokens for transactions.

Liquidity Pool: A collection of funds locked in a smart contract to facilitate trading and lending on DeFi platforms.

Limit Order: An order to buy or sell a cryptocurrency at a specific price or better

Mining: The process of validating transactions and adding them to the blockchain in exchange for rewards

Market Cap: The total value of a cryptocurrency that is calculated by multiplying an asset's current price by the total supply.

Merkle Tree: A data structure allowing easy and secure data integrity verification in a blockchain.

Multisig: A wallet that enhances the security of assets by requiring multiple signatures to authorize transactions

Market Order: An order to buy or sell a cryptocurrency at the currency market price

Node: A computer connected to the blockchain network that helps validate and relay transactions.

NFT (Non-Fungible Token): A unique digital asset representing ownership of specific items like artwork or collectibles stored on a blockchain.

Nonce: A number used once in a cryptographic communication, crucial in the mining process

Network Effect: A situation where an increase in the number of participants improves the value of a service.

Open Source: Software whose source code is available for anyone to view, use, or modify.

Oracle: A service that provides real-world data to smart contracts on a blockchain

Order Book: A list of buy and sell orders for a specific cryptocurrency used by exchanges

OTC (Over-the-Counter): A trading method that allows for direct sale of access without going through an exchange

PoS (Proof-of-Stake): A consensus mechanism that allows validators to create new blocks and validate transactions based on the number of coins they hold or stake on the blockchain.

PoW (Proof-of-Work): A consensus mechanism that requires miners to solve complex mathematical problems to validate transactions.

PoSA (Proof-of-Staked Authority): A consensus mechanism that combines elements of Proof-of-Stake and Delegated Proof-of-State to enhance transaction speed and scalability

Private Key: A secret key that allows the owner to access and manage their cryptocurrency funds

Public Key: A cryptographic key that can be shared with others to receive cryptocurrency

Pump and Dump: A plan that artificially inflates the price of an asset before selling it off for profit, leaving others at a loss.

Quorum: The minimum number of participants required to validate a blockchain network transaction.

Quick Swap: A service that allows users to exchange one cryptocurrency for another instantly

Query: A request for information or data used in blockchain interactions.

Rollup: A Layer 2 scaling solution that batches multiple transactions into a single one to improve efficiency.

Rust: A programming language often used to build blockchain

Reorg: A situation where a blockchain undergoes a temporary split and then resolves to a single version.

Scalability: The capacity of a blockchain network to handle an increasing number of transactions.

Sharding: A scalability solution that splits the blockchain transaction into smaller pieces to improve throughput.

Sidechains: Separate blockchains that are linked to the main blockchain, allowing for the transfer of assets.

Slashing: Slashing in blockchain refers to penalties imposed on validators or nodes for misbehavior or failing to perform their duties correctly. It's a security measure that discourages malicious actions like double-signing or downtime by confiscating a portion of the validator's staked tokens.

Smart contract: Self-executing contracts used by blockchain to automatically perform specific actions when certain conditions are met.

Staking: Locking cryptocurrency on a PoS network to earn rewards.

Staking-as-a-Service: Staking-as-a-Service refers to a service provided by blockchain-based protocols that allow cryptocurrency holders to stake their tokens without setting up or maintaining staking infrastructure. Typically, the structure put in place enables crypto holders to delegate their tokens to a validator node, and the tokens are staked in exchange for rewards.

Stablecoin: A stablecoin is a type of cryptocurrency that is expected to be stable in value because it is pegged to a stable reserve asset like fiat currency or gold. Unlike regular cryptocurrency, which is mainly volatile, stablecoin resists volatility while maintaining features like swift cross-border transactions and decentralization.