Crypto Glossary

When a single entity controls more than 50% of a blockchain's mining or staking power, potentially enabling double-spending or transaction censorship.

A concept (ERC-4337) that turns user wallets into smart contracts, enabling features like social recovery, gas sponsorship, and batched transactions.

Free distribution of tokens to wallet addresses, often used as a marketing strategy or to reward early adopters and community members.

Automated Market Maker — an algorithm that prices assets in decentralized liquidity pools using mathematical formulas (e.g., x*y=k) instead of order books.

Annual Percentage Yield — the annualized rate of return on an investment, accounting for compound interest. Common metric in DeFi and staking.

The Proof of Stake coordination layer of Ethereum, launched December 2020. Manages validators and was merged with the execution layer in September 2022.

A batch of transactions confirmed and recorded on a blockchain. Each block references the previous block, forming a chain.

A tool to browse blockchain data — view transactions, wallet balances, smart contracts, and block details. Examples: Etherscan, Solscan.

A protocol that enables the transfer of assets and data between different blockchains by locking assets on one chain and minting equivalents on another.

Permanently removing tokens from circulation by sending them to an inaccessible address. Used to reduce supply and potentially increase value.

Centralized Exchange — a crypto trading platform operated by a company that acts as an intermediary. Examples: Coinbase, Binance, Kraken.

A cryptocurrency wallet not connected to the internet, providing maximum security. Hardware wallets like Ledger and Trezor are common examples.

The mechanism by which a blockchain network agrees on the current state of the ledger. Examples include Proof of Work and Proof of Stake.

Technology enabling interoperability between different blockchains, allowing assets and data to move between networks.

Decentralized Autonomous Organization — a community-governed entity where decisions are made through token holder voting and executed via smart contracts.

Decentralized Application — an application built on blockchain that operates without centralized control, using smart contracts for backend logic.

Decentralized Finance — financial services (lending, borrowing, trading, insurance) built on blockchain without traditional intermediaries like banks.

Decentralized Exchange — a peer-to-peer trading platform via smart contracts without a central authority. Examples: Uniswap, Curve, Jupiter.

Crypto slang for holding a position despite significant losses or volatility. The opposite of Paper Hands.

Ethereum Improvement Proposal — a design document describing new features, processes, or standards for Ethereum.

The standard interface for fungible tokens on Ethereum. Defines functions like transfer, balance, and approval.

The standard interface for non-fungible tokens (NFTs) on Ethereum. Each token has a unique ID representing distinct digital assets.

An uncollateralized loan that must be borrowed and repaid within a single blockchain transaction. Used for arbitrage and collateral swaps.

A change to a blockchain protocol. A hard fork creates a new chain (like BTC to BCH), while a soft fork is backward-compatible.

The unit measuring computational effort on Ethereum. Gas fees are paid in ETH to validators. Fees fluctuate with network demand.

A token that grants holders voting rights on protocol decisions, such as fee structures, upgrades, and treasury allocation.

A denomination of ETH used for gas prices. 1 Gwei = 0.000000001 ETH (1 billionth of an ETH).

An event (approximately every 4 years) that cuts Bitcoin block reward in half, reducing the rate of new BTC creation.

The total computational power used to mine and process transactions on a Proof of Work blockchain.

Crypto slang originating from a misspelling of hold. It means to hold your crypto assets long-term regardless of market volatility.

A cryptocurrency wallet connected to the internet for convenient access. Browser extensions and mobile apps are hot wallets.

The unrealized loss experienced by liquidity providers when the price ratio of pooled tokens changes vs simply holding them.

Know Your Customer — identity verification required by regulated exchanges. Typically involves submitting ID documents and proof of address.

The base blockchain network (e.g., Ethereum, Solana, Bitcoin). Processes and finalizes transactions on its own consensus mechanism.

A scaling solution built on top of Layer 1 that processes transactions off-chain while inheriting the security of the base layer.

A collection of tokens locked in a smart contract used to facilitate decentralized trading, lending, and other DeFi functions.

Maximal Extractable Value — profit that validators or searchers can make by reordering, inserting, or censoring transactions within a block.

The process of creating new tokens or NFTs on a blockchain by recording them in a smart contract.

Non-Fungible Token — a unique digital asset on blockchain representing ownership of items like art, music, collectibles, or in-game items.

A computer that maintains a copy of the blockchain and participates in validating and relaying transactions across the network.

A service providing real-world data to smart contracts. Chainlink is the most widely used oracle network.

A secret cryptographic key that proves ownership of a wallet and allows signing transactions. Must be kept secret.

A consensus mechanism where validators stake tokens as collateral to secure the network and earn rewards.

A consensus mechanism where miners solve complex mathematical puzzles to validate transactions and create new blocks.

A Layer 2 scaling solution that bundles many transactions off-chain and posts compressed data to the base layer.

A scam where developers create a token, inflate its price, then drain the liquidity pool — leaving investors with worthless tokens.

A 12 or 24-word recovery phrase that can restore a cryptocurrency wallet. Represents the master key to all assets in the wallet.

A penalty in Proof of Stake systems that destroys a portion of a validator staked tokens for malicious behavior or downtime.

The difference between a trade expected price and the actual execution price. Common in DEX trading for large orders.

Self-executing code deployed on a blockchain that automatically enforces the terms of an agreement when conditions are met.

A cryptocurrency designed to maintain a stable value by being pegged to an asset like USD. Examples: USDC, USDT, DAI.

Locking cryptocurrency in a Proof of Stake network to help validate transactions and secure the network, earning rewards in return.

Total Value Locked — the total value of crypto assets deposited in a DeFi protocol. A key metric for measuring protocol adoption.

A node operator in a Proof of Stake network that proposes and attests to new blocks. Validators stake tokens as collateral.

We Are Going to Make It — a popular rallying cry in the crypto community expressing optimism and shared belief in future success.

An individual or entity holding a very large amount of cryptocurrency, capable of influencing market prices with their trades.

A token pegged 1:1 to another token from a different blockchain. Example: WBTC is BTC represented as an ERC-20 token on Ethereum.

Deploying crypto across DeFi protocols to maximize returns through trading fees, governance token rewards, and interest.

A cryptographic method that proves a statement is true without revealing the underlying data. Used in ZK-rollups for scalable transactions.