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Crypto Terminology
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Crypto Terminology

Below are common terminology that you’ll come across in the Crypto space as well as some lingo you’ll hear with detailed explanations.

LINKS

 
Seed Phrase
A seed phrase is a series of words generated by your cryptocurrency wallet that give you access to the crypto associated with that wallet. The wallet also uses the seed to create private keys — which allow you to send or spend your crypto.
Under NO circumstance should you give out your seed phrase as it is essentially the keys to your wallet. No one in crypto will ever ask you for this if they do it's a scam.
 
Smart Contract
Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary's involvement or time loss.
 
Metamask
MetaMask is a software cryptocurrency wallet used to interact with the Ethereum blockchain. It allows users to access their Ethereum wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications.
 
DeFi (Decentralized Finance)
Decentralized finance offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain.
 
DEX
A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, or any other intermediary. Examples are Sushiswap, TraderJoe, Uniswap, Pancakeswap.
 
CEX
Centralized exchanges (CEXs) are a type of cryptocurrency exchange that is operated by a company that owns it in a centralized manner. Examples are Binance, KuCoin, Kraken, Gate.io.
 
Market Cap (MC)
Crypto market capitalization is the total value of a cryptocurrency. Where stock market capitalization is calculated by multiplying share price times shares outstanding, crypto market capitalization is calculated by multiplying the price of the cryptocurrency with the number of coins in circulation.
 
Gas
Gas refers to the fee, or pricing value, required to successfully conduct a transaction or execute a contract on the blockchain platform.
 
Slippage
Slippage is the difference between the price you expect to get on the crypto you have ordered and the price you actually get when the order executes.
 
Stablecoin
A stablecoin is a cryptocurrency attempts to peg their market value to another asset. Stablecoins are a crucial part of defi, since they allow for a quick and liquid store of value. You can think of a stablecoin like digital dollars that in theory aren't subject to volatility and peg to exactly $1.
 
Bridge
A blockchain bridge is a connection that allows the transfer of tokens and/or arbitrary data from one chain to another. Both chains can have different protocols, rules and governance models, but the bridge provides a compatible way to interoperate securely on both sides.
 
Blockchain
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
 
Inflationary / Deflationary
Inflationary currencies have no limit to how many units are in circulation, while deflationary currencies have a max supply. ... Fiat currencies fall into the category of inflationary currencies, while most cryptocurrencies are deflationary in one way or another.
 
Layer 1
A layer one network is a network that acts as infrastructure for other applications, protocols, and networks to build on top of. Layer 1s act as the network.
 
EXAMPLES
Ethereum is a Layer 1 (It is a infrastructure/network) that allows Dapps (or apps) to be built on. When a Dapp is built on the eth network it utilizes the security and infrastructure that Eth has built. When using a Layer 1, it costs a fee (GAS) this gas fee is always charged in the native layer 1 token EI - ETH.
 
EXAMPLES Avalanche -> Will use AVAX coin for transaction fees aka gas Fantom -> Will use FTM coin for transaction fees aka gas Binance Smart Chain -> Will use BSC for transaction fees aka gas
 
A public decentralized layer 1 network's primary characteristic is its consensus mechanism. Different consensus mechanisms provide different levels of speed, security, and throughput.
 
Altcoin
The term “altcoin” is shorthand for “alternative coins” and simply means cryptocurrencies other than Bitcoin.
 
Decentralized Application (DAPP)
An open source, software application with backend code running on a decentralized peer-to-peer network rather than a centralized server. You may see alternate spellings: dApps, DApps, Dapps, and Đapps.”
 
FIAT Currency
Government-issued currency. For example, US Dollars (USD), Euros (EUR), Yuan (CNY), and Yen (JPY).
 
Liquidity
The availability of liquid assets to a company or market. An asset is considered more liquid if it can easily be converted into cash. The harder the ability to turn an asset into cash the more illiquid the asset. For example, stocks are considered relatively liquid assets as they can be easily converted to cash while real estate is considered an illiquid asset. The liquidity of an asset affects its risk potential and market price.
 
Mainnet
The primary network where actual transactions take place on a specific distributed ledger. For example, The Ethereum mainnet is the public blockchain where network validation and transactions take place
 
DAO (Decentralized Autonomous Organization)
A governance structure without a central authority which rewards good behavior and penalizes bad behavior by a set of pre-defined rules which can only be changes by a vote, which typically requires a stake, adding risk to the process to discourage bad actors, amongst the participants.
 
Rugpull
A rug pull is a malicious maneuver in the cryptocurrency industry where crypto developers abandon a project and run away with investors' funds.
 
DYOR
DYOR stands for Do Your Own Research and is a common phrase used by cryptocurrency enthusiasts. However, the acronym is not a piece of advice exclusive to the cryptocurrency ecosystem. It is commonly used throughout the internet due to how fast and easily misinformation can spread. Always always always DO your own research!”
 
Volatility
Volatility is a measure of how much the price of an asset has moved up or down over time. ... As a newer asset class, crypto is widely considered to be volatile — with the potential for significant upward and downward movements over shorter time periods.
 
 
 
 
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