Crypto, decoded.
Plain-English definitions for every term you will meet in crypto. Search it, scan A to Z, or tap any term for the full explanation.
Press / to search · 131 terms, cross-linked to the products they relate to
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The terms worth knowing first, tap to expand#
51% attack51 percent attack
SecurityAn attack where one party controls most of a network's power and can rewrite recent transactions.
A 51 percent attack is when a single party gains control of more than half of a network's mining power or stake. With a majority, they can outpace the rest of the network and influence which blocks are accepted.
This lets the attacker do specific damage: they can reverse their own recent transactions to double-spend, and block others from confirming. They cannot steal coins from arbitrary wallets or undo deep history, since they do not hold others' keys.
The defense is cost. On a large network, acquiring a majority of the hash rate or stake would be enormously expensive, and the attack would likely crash the value of the very asset the attacker holds.
Smaller networks with low hash rate or stake are more exposed, and several have suffered such attacks, which is one reason network size and security matter.
A
Account abstractionaccount-abstraction
TechA design that turns a wallet into a programmable smart contract, enabling friendlier features and recovery.
Account abstraction lets a wallet behave like a programmable smart contract rather than a plain key-controlled account. This opens the door to features that ordinary accounts cannot offer.
With it, wallets can support things like recovering access without a single seed phrase, setting spending limits, batching several actions into one, and letting someone else cover the gas fee through a paymaster.
The aim is to make self-custody far easier and safer for everyday people, removing some of the sharp edges that make crypto intimidating, without giving up user control.
It is an active area of development, and wallets that use it can offer a smoother experience while keeping the core promise that you, not a company, control your funds.
Addresswallet address
BasicsA string of letters and numbers that identifies where crypto can be sent on a blockchain.
A crypto address is a unique identifier you share to receive funds, a bit like an account number or an email address for money. It is derived from your wallet's public key.
Addresses are public and safe to share for receiving. What must stay private is your seed phrase and private keys, which control the funds. Different networks use different address formats, so a Bitcoin address looks different from an Ethereum address.
Always double-check an address before sending, since blockchain transactions cannot be reversed once confirmed.
Airdroptoken airdrop
SecurityA distribution of free tokens to wallet holders, often to reward early users or bootstrap a community.
An airdrop sends tokens directly to many wallets at once, usually for free. Projects use them to reward early supporters, spread ownership more widely, or draw attention to a launch.
Eligibility is often based on past activity, such as having used a protocol or held a particular asset before a cut-off moment known as a snapshot. Because the snapshot is in the past, you cannot qualify after the fact by rushing to act.
Airdrops are also a common lure for scams. Attackers send unsolicited tokens that link to a fake claim site designed to drain your wallet once you connect it or approve a transaction.
Treat unexpected tokens with caution, do not interact with ones you were not expecting, and never connect your wallet to a site you do not trust just to claim something.
Algorithmic stablecoinalgo stablecoin
PaymentsA stablecoin that tries to hold its peg through code and incentives rather than holding cash reserves.
An algorithmic stablecoin tries to keep its price stable using rules and market incentives instead of holding a reserve of cash or bonds for each coin. Smart contracts expand or shrink the supply to push the price back toward the peg.
The appeal is a stablecoin that does not depend on a custodian holding reserves. The difficulty is that the peg relies on people continuing to trust and trade the system, which can break down under stress.
This category has a troubled track record. Some algorithmic designs have collapsed quickly when confidence faded, wiping out value in a so-called death spiral.
Understanding how a stablecoin maintains its peg is essential, and purely algorithmic models deserve extra caution compared with fully reserve-backed ones.
Allowlistallowlisted
SecurityA list of pre-approved participants or addresses granted access ahead of others.
An allowlist is a list of approved participants or addresses that are granted access to something restricted, such as an early sale, a mint, or a permitted set of withdrawal destinations.
It is the more modern term for what used to be called a whitelist, with the same meaning: only what is on the list is allowed through.
In token and NFT launches, securing an allowlist spot usually means guaranteed early access, often earned through community participation before a public release.
In security settings, an address allowlist restricts transfers to destinations you have pre-approved, reducing the risk if your account is ever taken over.
Altcoinalternative coin
BasicsAny cryptocurrency other than Bitcoin.
Altcoin is short for "alternative coin" and broadly means any cryptocurrency that is not Bitcoin. The term dates from when Bitcoin was essentially the only crypto and everything else was an alternative to it.
The label covers an enormous range, from large, established networks like Ethereum to tiny, speculative projects. Being an altcoin says nothing about quality on its own.
Altcoins tend to be more volatile than Bitcoin, especially the smaller ones, which can rise and fall sharply on thin trading and shifting sentiment.
Some people use the word more narrowly to exclude major coins, but the original, broad sense, anything other than Bitcoin, is the most common.
AMLanti-money laundering
SecurityAnti-Money Laundering: the rules and checks financial services use to prevent illegal funds moving through them.
AML stands for Anti-Money Laundering, a set of laws and procedures designed to stop criminals from disguising the origins of illegal money. Regulated crypto services follow AML rules just as banks do.
In practice this means identity checks (KYC), monitoring transactions for suspicious patterns, and reporting activity that looks unusual to the relevant authorities. These checks are why a compliant service asks you to verify your identity before certain features unlock.
AML rules apply to businesses that handle the link between crypto and traditional money, such as exchanges, card issuers, and on-ramps. They do not change anything about a blockchain itself, which records every transaction publicly whether the participants are identified or not.
For an everyday user, AML mostly shows up as a one-time verification step. It exists to keep regulated services usable by ordinary people while making them harder for criminals to abuse.
AMMautomated market maker
DeFiAn automated market maker: a formula-driven system that prices trades against a pool of tokens instead of an order book.
An AMM, or automated market maker, is the engine behind most decentralized exchanges. Instead of matching individual buyers and sellers, it lets you trade against a shared pool of tokens, with prices set by a formula.
The formula adjusts the price automatically based on the ratio of assets in the pool. As you buy one token, it becomes scarcer in the pool and its price rises, which is also why large trades cause more slippage.
The tokens in the pool are supplied by liquidity providers, who deposit pairs of assets and earn a share of the trading fees in return. This is what keeps trading possible without a traditional market maker.
AMMs made it practical to trade a huge range of tokens on-chain, around the clock, without anyone needing to post buy and sell orders.
B
BitcoinBTC
BasicsThe first and largest cryptocurrency, a decentralized digital money secured by a global network.
Bitcoin, launched in 2009, was the first cryptocurrency. It lets people send value over the internet without a bank or central authority, using a public blockchain that anyone can verify.
New bitcoin is created through mining, where computers compete to add blocks of transactions to the chain. The total supply is capped at 21 million, which is central to its design as a scarce digital asset.
Bitcoin is widely held as a store of value and is the benchmark the rest of the market is measured against.
Blockblock height
BasicsA batch of verified transactions added permanently to a blockchain.
A block is a group of transactions that have been validated and sealed together. Each block references the one before it, forming a chain. Once a block is confirmed by the network, the transactions inside it are permanent.
Block height is the count of how many blocks precede a given block, acting like a timestamp. The time between blocks varies by network: Bitcoin targets roughly ten minutes per block, while other networks confirm blocks in seconds.
The more blocks that have been added on top of a transaction's block, the harder it is to reverse, which is why some services wait for several confirmations before crediting a deposit.
Block heightblock number
BasicsThe position of a block in the chain, counted as the number of blocks before it.
Block height is simply the count of blocks that come before a given block, starting from the very first block at height zero. The latest block has the highest number, and that number ticks up every time a new block is added.
Because blocks are added in a steady, ordered sequence, height acts like a clock for the blockchain. People often reference a height instead of a date to pinpoint exactly when something happened on-chain.
It is also used to schedule events. Network upgrades, halvings, and other changes are often set to take effect at a specific block height rather than a calendar time.
The higher a transaction's block is below the current height, the more confirmations it has, and the more settled it is considered.
Block rewardcoinbase reward
TechThe new coins, plus fees, paid to whoever adds the next block to a blockchain.
The block reward is the payment that goes to the miner or validator who successfully adds a new block. It is the main incentive that keeps people contributing the work or stake that secures the network.
It usually has two parts: newly created coins issued by the protocol, and the transaction fees paid by everyone whose transactions are included in that block.
On proof-of-work networks the newly issued portion shrinks over time through halvings, so the fee portion gradually becomes more important. On proof-of-stake networks, validators earn rewards in proportion to their stake.
The block reward is also how new coins enter circulation in the first place, which ties it directly to a network's supply schedule.
Blockchainblock chain
BasicsA shared, tamper-resistant digital ledger that records transactions across many computers.
A blockchain is a database shared across a network of computers, where records are grouped into blocks and linked together in order. Each block carries a fingerprint of the one before it, so the blocks form a chain that runs back to the very first one.
Once a block is confirmed, changing it would require redoing all the blocks after it across the whole network at the same time. That is so expensive and difficult that the history is treated as effectively permanent, which is where the "tamper-resistant" reputation comes from.
Because every participant can hold their own copy and check it against everyone else's, no single party has to be trusted to keep the records honest. The network agrees on one shared version of events through its consensus rules.
This is what lets crypto work without a bank or central authority in the middle. The same idea is also used for things beyond money, such as tracking ownership of digital items or running the code behind decentralized apps.
Bridgecross-chain bridge
TechA tool that moves assets or data between two different blockchains.
A bridge connects two separate blockchains so value can move between them, since networks like Bitcoin and Ethereum cannot talk to each other directly. Typically the asset is locked on the first chain and a matching representation is issued on the second, then burned and unlocked when you move back.
Bridges make it possible to use an asset where it was not originally issued, for example bringing Bitcoin's value into apps that live on another network. Without them, each blockchain would be an island.
The convenience comes with real risk. The contracts that hold the locked assets concentrate a lot of value in one place, and they have been the target of some of the largest hacks in the industry. The bridged token is also only as trustworthy as whatever is holding the original.
Some wallets route cross-chain swaps for you so you do not have to pick or operate a bridge yourself, which removes a common source of mistakes.
Burnburned
TechPermanently removing tokens from circulation by sending them to an address no one can use.
Burning tokens means taking them out of circulation forever. This is usually done by sending them to a special address that has no known private key, so no one can ever move them again.
Projects burn tokens for several reasons. Reducing supply can support a token's value, and some networks burn a portion of transaction fees as a built-in feature.
Because the burn is recorded on-chain, anyone can verify that the tokens really were destroyed and are gone for good. It cannot be quietly undone.
Burning is the opposite of minting. How and whether a token is burned is an important part of its tokenomics.
C
CeFicentralized finance
DeFiCentralized finance: crypto services run by a company that holds your funds and handles trades for you.
CeFi, short for centralized finance, refers to crypto services operated by a company that sits in the middle, much like a traditional bank or broker. The company holds customer funds and runs the platform.
This is the custodial model. You typically create an account, pass identity checks, and trust the provider to safeguard your assets and process your transactions. In return you get convenience, support, and account recovery.
CeFi contrasts with DeFi, where smart contracts replace the company and you keep custody of your own funds throughout. Many people use both, choosing CeFi for ease and DeFi for control.
The main risk with CeFi is provider risk: if the company is hacked, mismanaged, or fails, customer funds it holds can be affected.
CEXcentralized exchange
MarketsA centralized exchange where a company holds your funds and matches buyers with sellers.
A CEX, or centralized exchange, is a company-run platform for buying, selling, and trading crypto. It works like a traditional brokerage: you deposit funds, the exchange holds them, and it matches your orders with other users through an order book.
Because the exchange holds your funds while they are on the platform, it is a custodial service. This makes trading fast and simple, and usually provides fiat on-ramps, but it means you are trusting the company with your assets.
Most centralized exchanges require identity verification under KYC and anti-money laundering rules, since they handle the link between crypto and traditional banking.
The contrast is a DEX, where you trade directly from your own wallet and keep custody of your funds until the moment of the trade.
Circulating supplycirculating supplies
MarketsThe number of a token's coins currently available and trading in the market.
Circulating supply is the number of coins or tokens that are currently in public hands and available to trade. It excludes coins that are locked, reserved, or not yet released.
It is the figure used to calculate market cap, since it reflects what is actually liquid rather than the theoretical total. This makes it a more realistic basis for comparing assets.
Circulating supply can grow over time as locked tokens vest, staking rewards are issued, or new coins are mined. It can also shrink if tokens are burned.
Comparing circulating supply with the maximum supply shows how much potential dilution is still to come, which is useful when judging a token's long-term outlook.
Coinnative coin
BasicsThe native asset of a blockchain, used to pay fees and secure the network.
A coin is the native asset of its own blockchain. Bitcoin's coin is BTC, Ethereum's is ETH, and Solana's is SOL. The coin is built into the network rather than created by a smart contract on top of it.
Native coins do the network's essential jobs: paying transaction fees and rewarding the miners or validators who secure the chain. You generally need some of a network's coin to do anything on it.
This is the technical difference between a coin and a token. A token is issued by a contract on an existing network, while a coin is the network's own asset.
In casual conversation people use "coin" and "token" interchangeably, and that is usually fine, but the distinction matters when you are figuring out what you need to pay fees.
Cold storagecold wallet
Wallets & keysKeeping crypto keys completely offline so they cannot be reached by online attackers.
Cold storage means holding the private keys to your crypto on a device that is not connected to the internet, such as a hardware wallet or a signing card. Because the keys never touch an online device, remote attackers have no way to reach them over the network.
To spend from cold storage you bring the offline device into the process just long enough to sign a transaction, then the keys go back to being isolated. The signing happens on the device itself, so the secret never leaves it even while you are connected.
It is the standard approach for securing funds you do not need to move often, sometimes described as a savings account compared to a spending account. The trade-off is convenience, since every transaction takes an extra step.
Many people use a layered approach: a small amount in a hot wallet for day-to-day spending and the bulk in cold storage. If the hot wallet is ever compromised, the loss is limited to the spending balance.
Cold wallet
Wallets & keysA wallet that keeps its private keys offline, safe from online attackers.
A cold wallet keeps the private keys to your crypto on a device that is not connected to the internet. Because the keys never touch an online machine, remote attackers have no way to reach them.
Hardware wallets and signing cards are the most common forms. To send funds you connect the device briefly, confirm the transaction on it, then it goes back offline, with the secret never leaving the device.
It is the standard way to secure holdings you do not move often, sometimes thought of as a savings vault. The cost is a little extra effort for each transaction.
Many people pair a cold wallet for long-term holdings with a hot wallet for day-to-day spending, so a compromised phone never puts the bulk of their funds at risk.
Collateralcollateralized
DeFiAssets locked to back a loan or position, which can be taken if the borrower fails to repay.
Collateral is an asset you lock up to secure a loan or another financial position. It gives the lender protection: if you do not repay, the collateral can be claimed to cover the debt.
In DeFi, collateral is almost always crypto deposited into a smart contract. Because crypto prices move quickly, lending protocols usually require collateral worth more than the loan, which is called over-collateralization.
If the collateral's value drops below a required threshold, the protocol liquidates it automatically to repay the loan. This is why borrowers watch their collateral ratio closely during volatile markets.
Collateral also backs some stablecoins, where reserves or crypto deposits stand behind each coin to support its peg.
Confirmationtransaction confirmation
BasicsEach new block added after the one containing your transaction, making it progressively harder to reverse.
When a transaction is included in a block, it has one confirmation. Each subsequent block added to the chain adds another confirmation. The more confirmations a transaction has, the more secure and irreversible it becomes.
Different services require different numbers of confirmations before crediting a deposit. Bitcoin transactions are typically considered secure after six confirmations, which takes around an hour. Faster networks may require only a few seconds to reach the same practical finality.
Consensusconsensus mechanism
BasicsThe process by which all nodes in a blockchain network agree on which transactions are valid.
A consensus mechanism is the set of rules that lets thousands of computers worldwide agree on a single, shared transaction history without trusting each other. Without consensus, there would be no way to stop someone from spending the same coins twice.
The core challenge is that anyone can try to add to the chain, including dishonest participants, and messages travel across an open network with no central referee. Consensus rules make honesty the most profitable choice and cheating expensive.
The two dominant approaches are proof of work, where computers compete to solve a puzzle, and proof of stake, where validators put up collateral that can be taken away if they misbehave. Both tie the right to add blocks to a real cost.
Consensus is also what determines finality, the point at which a confirmed transaction is treated as permanent. Different networks reach that point at different speeds, which affects how long a service waits before crediting a deposit.
Cross-chaincross chain
TechAnything that moves assets or information between two separate blockchains.
Cross-chain describes activity that spans more than one blockchain. Since each network is self-contained and cannot natively read another, moving value or data between them requires extra tooling.
Common cross-chain actions include bridging an asset from one network to another and swapping a token on one chain for a token on a different chain. Both rely on mechanisms that coordinate across the two networks.
The appeal is flexibility: you are not locked into a single network and can use an asset wherever it is most useful. The cost is added complexity and the extra risk that bridges introduce.
Many modern wallets handle cross-chain steps for you, which reduces the chance of sending an asset to a network where it cannot be recovered.
Cross-chain swapcross chain swap
DeFiExchanging a token on one blockchain for a token on another, in a single flow.
A cross-chain swap lets you trade an asset on one network for an asset on a different network, for example swapping a token on Ethereum for one on Solana. The two chains cannot communicate directly, so something has to coordinate the trade across them.
Behind the scenes this can involve decentralized exchanges to handle the trade and, for some routes, bridges to move value between the networks. Several steps that would normally be manual get combined into one flow.
Good wallets handle the routing so you simply pick what you have and what you want, and the swap settles back into your wallet without you managing each step by hand. This hides a lot of complexity and avoids common mistakes like sending to the wrong network.
Because cross-chain routes can touch bridges, they can carry more risk and cost than a simple same-chain swap, so it is worth checking the quoted fees and the assets involved before confirming.
Custodial wallet
Wallets & keysA wallet where a company holds your private keys for you, like a bank holding your money.
A custodial wallet is one where a third party, usually a company, holds the private keys on your behalf. You access your funds through an account with that provider rather than controlling the keys directly.
This is convenient. You can often recover access with a password reset, get customer support, and avoid the responsibility of safeguarding a seed phrase. It feels much like online banking.
The trade-off is trust and control. Because the provider holds the keys, it could freeze your account, and if it is hacked or fails, your funds can be at risk. This is the meaning behind "not your keys, not your coins."
Custodial wallets are common on centralized exchanges and beginner-friendly apps, and many people use one alongside a self-custody wallet.
Custodycustodial
Wallets & keysWho holds the private keys to crypto, and therefore who actually controls it.
Custody refers to who controls the private keys to a crypto balance, because in crypto whoever holds the keys ultimately controls the funds. It is the single most important distinction to understand when choosing where to keep your assets.
With a custodial service, a company holds the keys on your behalf, much like a bank holding your cash. You get convenience, account recovery, and customer support, but you are trusting the provider to stay solvent, honest, and secure.
With non-custodial or self-custody, you hold the keys yourself. No one can freeze or move your funds, but the responsibility for backups and security is entirely yours, and there is no support line that can reset access.
The saying "not your keys, not your coins" captures the trade-off. Many people use both: a custodial service for buying and a self-custody wallet for holding what they intend to keep.
D
DAOdecentralized autonomous organization
DeFiAn organization governed by smart contracts and token-holder votes rather than a traditional management structure.
A DAO, or decentralized autonomous organization, is a group that coordinates and makes decisions through rules encoded in smart contracts. Members typically hold governance tokens that give them voting rights on proposals.
DAOs are used to govern DeFi protocols, manage treasuries, fund projects, and more. Because the rules run on-chain, they are transparent and resistant to unilateral changes. In practice many DAOs still rely on a small active community for day-to-day work.
Dappdecentralized application
DeFiA decentralized application whose core logic runs on smart contracts rather than a company's servers.
A dapp, short for decentralized application, is an app whose backend logic runs on a blockchain through smart contracts instead of on servers owned by a single company. The contracts are public and run exactly as written.
Users interact with a dapp by connecting their own wallet, which signs transactions to use the contracts. There is usually no account to create and no password, since your wallet is your identity.
Dapps cover a wide range of uses: trading, lending, games, marketplaces, and social apps. Because the core logic lives on-chain, no single party can quietly change the rules or shut the service down.
The website you click through is just a front end. The important part lives in the contracts, which is why connecting your wallet to an untrusted dapp can be dangerous.
DeFidecentralized finance
DeFiFinancial services like trading, lending and saving built on blockchains, without a central intermediary.
DeFi, short for decentralized finance, is a broad term for financial applications that run on blockchains using smart contracts instead of banks or brokers. It covers trading on decentralized exchanges, lending and borrowing, earning yield, and more.
Because the code is open and runs on a public network, anyone with a wallet can use it, and anyone can inspect how it works. The flip side is that smart-contract bugs and market risks fall on the user, so it pays to understand what you are using.
DEXdecentralized exchange
DeFiA decentralized exchange where you trade crypto directly from your wallet, without a middleman holding your funds.
A DEX, or decentralized exchange, lets people swap tokens directly from their own wallets using smart contracts, rather than depositing funds with a company. Many use an automated market maker model, where trades price against a pool of assets supplied by other users.
Because you keep custody of your funds until the moment of the trade, there is no exchange account to be frozen or hacked in the traditional sense. You are responsible for your own keys and for checking what you are trading.
Double-spenddouble spend
SecuritySpending the same crypto twice, which a blockchain's consensus rules are designed to prevent.
A double-spend is the act of trying to spend the same units of crypto more than once. With ordinary digital files this would be easy, since a copy is identical to the original, and solving it was the core problem crypto had to crack.
Blockchains prevent double-spending through consensus. The network agrees on a single ordered history of transactions, so once coins are spent, every honest participant sees them as gone and rejects any attempt to spend them again.
This is also why confirmations matter. A transaction becomes harder to reverse, and therefore harder to double-spend, with each new block added on top of it.
The main theoretical way to force a double-spend is a 51 percent attack, which requires controlling a majority of the network and is prohibitively expensive on large chains.
E
EIPEthereum Improvement Proposal
TechAn Ethereum Improvement Proposal: a formal document proposing a change or standard for Ethereum.
EIP stands for Ethereum Improvement Proposal. It is a formal document that proposes a change to the Ethereum network or a new standard for developers to follow.
EIPs are how Ethereum evolves in an open, structured way. Anyone can draft one, and the community discusses, refines, and decides whether to adopt it, with each proposal assigned a number.
Some EIPs change how the network itself works, while others define token standards. The well-known ERC standards, such as the ones for fungible tokens and NFTs, started life as EIPs.
For most users, EIPs work quietly in the background, but they are the mechanism behind major upgrades and the standards that make different tokens and apps compatible.
ERC-20ERC20
TechThe common standard for fungible tokens on Ethereum, so wallets and apps can handle them uniformly.
ERC-20 is the technical standard that most fungible tokens on Ethereum follow. Fungible means each unit is interchangeable with every other, the way one dollar equals any other dollar.
The standard defines a common set of rules a token contract must implement, such as how to check balances and transfer tokens. Because every ERC-20 token speaks the same language, wallets and apps can support them all automatically.
This shared standard is a big reason the Ethereum ecosystem grew so quickly. Stablecoins, governance tokens, and countless others are ERC-20 tokens.
Similar standards exist on other networks under different names, but ERC-20 is the original and most widely referenced.
ERC-721ERC721
TechThe Ethereum standard for non-fungible tokens, where each token is unique.
ERC-721 is the standard on Ethereum for non-fungible tokens, or NFTs. Unlike fungible tokens, each ERC-721 token is unique and not interchangeable with another.
The standard defines how to track ownership of individual, distinct items on-chain, so wallets and marketplaces can handle any ERC-721 token in a consistent way.
It is the technology behind most digital collectibles, art, and other one-of-a-kind on-chain items. Each token has its own identifier and can carry a link to its associated content.
ERC-721 sits alongside ERC-20 in the family of Ethereum token standards, with ERC-20 covering interchangeable assets and ERC-721 covering unique ones.
EthereumETH
BasicsA programmable blockchain that introduced smart contracts and became the foundation for most DeFi and NFT activity.
Ethereum, launched in 2015, extended the idea of a blockchain beyond simple value transfer. It introduced a programmable layer where developers could deploy smart contracts, enabling decentralized applications, DeFi protocols, stablecoins, and NFTs to run on a public network.
Ether (ETH) is the native token used to pay transaction fees (gas) and to stake as a validator after Ethereum transitioned to proof of stake in 2022. Many other tokens and standards originate on Ethereum.
F
Faucetcrypto faucet
TechA service that gives out small amounts of crypto for free, often for testing on a test network.
A faucet is a service that dispenses small amounts of crypto for free. The name comes from the idea of tokens dripping out a little at a time.
The most common and useful type is a testnet faucet. Developers and learners use it to get free test tokens that have no real value, so they can try out transactions and apps without spending real money.
On live networks, faucets have historically been used to introduce people to a coin, though these are now rare and the amounts are tiny.
Be cautious with faucets that ask you to connect a wallet or pay a fee first, as that pattern is sometimes used by scams.
Fiatfiat currency
PaymentsGovernment-issued money such as dollars, euros or pounds, as distinct from crypto.
Fiat money is currency issued and backed by a government or central bank. The word comes from the Latin for "let it be done" and refers to the fact that fiat's value rests on decree and trust rather than a physical commodity like gold.
In crypto contexts, fiat usually means the traditional currency you use every day: dollars, euros, pounds, and so on. It is the reference point people use when they talk about the price of a crypto asset.
Converting between fiat and crypto typically involves an on-ramp, which buys crypto with fiat, or an off-ramp, which sells crypto back to fiat. These are usually regulated services that require identity verification.
Stablecoins exist partly to bring fiat-like stability onto a blockchain, giving people a way to hold a steady value without leaving crypto entirely.
Fiat on-rampfiat onramp
PaymentsA service that lets you turn traditional money into crypto, the entry point for new users.
A fiat on-ramp is a service that takes traditional money, such as a card payment or bank transfer, and delivers crypto to your wallet. It is usually the very first step for someone new to crypto.
Because it bridges banking and crypto, an on-ramp is a regulated service that requires identity verification under KYC and anti-money laundering rules.
On-ramps differ a lot in fees, supported countries, payment methods, and which assets they offer, so the right choice depends on where you are and how you want to pay.
The reverse direction, turning crypto back into traditional money, is handled by an off-ramp.
Finalitytransaction finality
TechThe point at which a confirmed transaction is considered permanent and cannot be reversed.
Finality is the point at which a transaction is treated as settled for good, with no realistic chance of being reversed. Until then, there is a small possibility a transaction could be undone.
Different networks reach finality in different ways. On proof-of-work chains like Bitcoin, finality is probabilistic: each new block makes a reversal exponentially less likely, which is why people wait for several confirmations.
Many proof-of-stake networks offer stronger, faster finality, where after a short process a block is locked in and reversing it would require validators to be heavily penalized.
Finality is why services wait before crediting deposits. They want enough assurance that the incoming transaction truly cannot be reversed before treating the funds as yours.
Forkblockchain fork
TechA change to a blockchain's rules, or a split that creates two versions of the chain.
A fork happens when a blockchain's software rules change, or when the network temporarily disagrees about which block comes next. The word covers a few related situations.
A short-lived fork can occur naturally when two miners find a block at almost the same time. The network quickly settles on one and discards the other, so this kind resolves on its own.
More significant are upgrades to the rules, which come in two flavors. A soft fork tightens the rules in a backward-compatible way, while a hard fork changes them in a way that is not compatible, sometimes splitting the chain into two separate networks.
When a hard fork splits a chain, holders can end up with coins on both sides, since the history up to the split point is shared.
G
Gasgas fee
TechThe fee paid to a blockchain network to process and confirm a transaction.
Gas is the fee you pay to have a transaction included and processed on a blockchain. It compensates the validators or miners who secure the network and do the work of running your transaction.
The price of gas moves with demand. When many people want to transact at once, they bid higher fees to get in sooner, so gas rises during busy periods and falls when the network is quiet. A simple transfer costs less than a complex smart-contract interaction, which uses more of the network's resources.
Fees are paid in the network's native token, for example ETH on Ethereum. You need a small amount of that token on hand to transact, even if you are mainly moving some other asset on that network.
Knowing roughly what gas costs on a given network helps you time transactions and avoid overpaying during congestion. Layer 2 networks exist largely to make these fees much cheaper.
Gas feetransaction fee
TechThe cost paid to a blockchain network to process and confirm a transaction.
A gas fee is the charge you pay for a blockchain to process your transaction. It rewards the validators or miners who run the network and include your transaction in a block.
The size of the fee depends on two things: how busy the network is, since users bid for limited space, and how much work your transaction requires. A simple transfer is cheap, while a complex smart-contract interaction costs more.
Gas fees are paid in the network's native token, so you need a small amount of it on hand even when moving other assets on that network.
During quiet periods fees can be very low, while congestion can make them spike. Layer 2 networks exist largely to keep these fees small.
Gas limit
TechThe maximum amount of work you allow a transaction to use, which caps what you can be charged.
The gas limit is the ceiling you set on how much computational work a transaction is allowed to consume. It protects you from runaway costs if something goes wrong.
A simple transfer needs a small, predictable amount of gas, while interacting with a smart contract can need much more. Wallets usually estimate a sensible limit automatically.
If you set the limit too low, the transaction runs out of gas partway through and fails, and you still pay for the work that was done. Set it high enough and you only pay for what is actually used.
The gas limit and the gas price together determine the most a transaction can cost, which is why both appear when you confirm one.
Gift cardcrypto gift card
PaymentsA prepaid voucher for a retailer or service that can be bought with crypto.
A gift card is a prepaid credit for a specific store or service. Buying gift cards with crypto is a practical way to use digital assets for everyday spending at merchants that do not accept crypto directly.
The flow is simple: you choose a brand and amount, pay with crypto, and receive a code to redeem at the retailer. The merchant only ever sees a normal gift card, so there is nothing new for them to set up.
This makes gift cards one of the simplest bridges between holding crypto and spending it in the real world, covering everyday categories like groceries, travel, electronics, and entertainment.
Using a stablecoin to buy gift cards can help avoid timing your spending around a volatile asset's price.
Governanceon-chain governance
DeFiThe process by which token holders vote on changes to a protocol or organization.
In crypto, governance refers to how decisions about a protocol's rules, parameters, or treasury are made. Many DeFi protocols issue governance tokens that give holders voting rights on proposals, from adjusting interest rates to changing fee structures.
On-chain governance executes decisions automatically via smart contracts once a vote passes. Off-chain governance uses votes as a signal, with a trusted team implementing the changes. Both models aim to distribute decision-making beyond a single company or team.
Governance token
DeFiA token that gives holders voting rights over how a protocol or DAO is run.
A governance token grants its holders a say in how a protocol or DAO operates. Holding one is like holding a vote: you can support or oppose proposals that change the system.
Votes can cover a wide range of decisions, from adjusting fees and interest rates to directing a shared treasury or approving upgrades. Voting power usually scales with how many tokens you hold.
The goal is to spread control beyond a single founding team so that the community shapes the protocol's direction. On-chain governance can even execute approved changes automatically.
In practice, participation is often low and large holders can carry outsized influence, so the degree of real decentralization varies from project to project.
Gweigigawei
TechA small unit of Ether commonly used to express gas prices on Ethereum.
Gwei is a denomination of Ether, the native token of Ethereum. One gwei is one billionth of an ETH, which makes it a convenient size for talking about gas prices.
Because gas fees are tiny fractions of an ETH, expressing them in whole ETH would mean a long string of zeros. Quoting them in gwei keeps the numbers readable, such as "20 gwei."
When you send a transaction, the gas price in gwei multiplied by the amount of gas used gives the fee in ETH. A higher gwei price means your transaction is more attractive to validators and gets confirmed sooner.
Watching gwei levels is a simple way to judge how congested the network is and whether it is a cheap time to transact.
H
Halvingthe halving
TechA scheduled event where a proof-of-work network cuts its block reward in half, slowing new coin issuance.
A halving is a built-in event that cuts the reward miners receive for each new block by 50 percent. On Bitcoin it happens roughly every four years, and it is part of the rules that cap the total supply at 21 million.
The purpose is to control issuance and create predictable scarcity. Each halving slows the rate at which new coins enter circulation, until eventually no new coins are created at all.
Halvings draw a lot of attention because reducing new supply can affect price if demand stays the same, though there are no guarantees and many other factors are at play.
For miners, a halving means the same effort earns fewer new coins, so transaction fees gradually become a larger share of their income over time.
Hard forkhardfork
TechA rule change that is not backward compatible, which can split a blockchain into two separate networks.
A hard fork is a change to a blockchain's rules that older software will reject. Because the new and old rules are incompatible, every participant has to upgrade to stay on the same network.
If the whole community upgrades, the chain simply continues under the new rules. If part of the community refuses, the chain splits into two networks that share history up to the fork point but diverge afterward.
When a split happens, anyone holding coins before the fork ends up with a balance on both resulting chains, since both inherit the same past. New, separate coins then trade independently.
Hard forks are sometimes planned upgrades and sometimes the result of a genuine disagreement about a project's direction.
Hardware wallethardware security device
Wallets & keysA physical device that stores your crypto private keys offline, isolated from internet-connected computers.
A hardware wallet is a dedicated piece of hardware, typically a small USB-like device, that stores your private keys in a secure chip that never exposes them to the internet. To sign a transaction you connect the device and confirm it physically, so even if your computer is compromised, the keys stay safe.
Hardware wallets are the gold standard for securing large amounts of crypto. The trade-off is cost and the extra steps required to make a transaction compared to a software wallet.
Hashhashing
TechA fixed-length fingerprint produced from any data, used throughout blockchains to link and verify information.
A hash is the output of a one-way function that turns any input, of any size, into a short string of a fixed length. The same input always produces the same hash, but even a tiny change to the input produces a completely different result.
Crucially, you cannot work backward from a hash to recover the original data, which is why hashes are described as one-way. This property makes them ideal for proving that data has not been altered.
Blockchains use hashes everywhere. Each block includes the hash of the previous block, which is what chains the blocks together and makes tampering obvious. Transactions are also identified by their hash.
In proof of work, miners repeatedly hash data while changing a small value until they find a hash that meets the network's target, which is the puzzle that mining is built around.
Hash ratehashrate
TechThe total computing power a proof-of-work network uses to mine blocks, a rough measure of its security.
Hash rate is the total amount of computational guessing happening across a proof-of-work network at any moment, measured in hashes per second. A higher hash rate means more machines are working to find the next block.
It is widely treated as a proxy for security. The more hashing power honest miners contribute, the more an attacker would need to assemble to overpower the network, which makes attacks more expensive.
Hash rate also relates to mining difficulty. As more power joins the network, the protocol raises the difficulty so blocks still arrive at a steady pace, and it lowers difficulty if power leaves.
For an everyday user, a high and stable hash rate is one sign that a proof-of-work network is healthy and well secured.
Hot walletsoftware wallet
Wallets & keysA crypto wallet that remains connected to the internet, convenient for everyday use but with higher exposure.
A hot wallet stores keys on an internet-connected device, such as a phone app or browser extension. This makes it quick and easy to use for everyday transactions, swaps, and DeFi.
Because the keys are on an online device, hot wallets carry more risk than cold storage if the device is compromised. The typical approach is to keep most holdings in cold storage and only a spending amount in a hot wallet.
I
Impermanent lossIL
DeFiThe loss liquidity providers can face when the prices of pooled tokens move apart compared to just holding them.
Impermanent loss is a risk specific to providing liquidity in an automated market maker pool. It is the gap between the value of your deposited tokens in the pool and what they would have been worth if you had simply held them.
It happens because the pool automatically rebalances as prices change. When one token in a pair rises or falls relative to the other, the pool ends up holding more of the weaker asset and less of the stronger one.
It is called "impermanent" because the loss only becomes real if you withdraw while prices are out of line. If prices return to where they started, the gap closes.
Trading fees earned from the pool can offset impermanent loss, and sometimes more than cover it, which is why providers weigh expected fees against this risk.
Interoperabilityinteroperable
TechThe ability of different blockchains to communicate and work together.
Interoperability is the broad goal of letting separate blockchains exchange value and information so they can function as a connected system rather than isolated islands.
Without it, an asset or application on one network has no built-in way to interact with another. Bridges, cross-chain messaging, and shared standards are all attempts to close that gap.
Better interoperability benefits users by making assets more portable and by letting applications draw on the strengths of multiple networks. It benefits developers by widening the audience their apps can reach.
The challenge is doing this securely, since the connections between chains are exactly where some of the largest exploits have occurred.
K
KYCKnow Your Customer
SecurityKnow Your Customer: the identity checks that regulated services use to verify who their users are.
KYC (Know Your Customer) is the process of verifying a user's identity, typically by collecting a government ID and sometimes a selfie. Regulated financial services, including crypto exchanges and some wallets, are required to complete KYC checks under anti-money laundering rules.
KYC is separate from self-custody. If you use a non-custodial wallet to hold and send your own crypto, no identity check is required. KYC applies when you interact with a regulated on-ramp, exchange, or card service.
L
Layer 1L1
TechA base blockchain, like Bitcoin or Ethereum, that settles its own transactions and provides core security.
A Layer 1 is a base blockchain that runs and secures itself, settling transactions directly on its own network. Bitcoin, Ethereum, and Solana are all Layer 1s.
The Layer 1 is where the core security and consensus live. Everything built on top, including Layer 2 networks, ultimately relies on a Layer 1 to anchor its results and resolve disputes.
Layer 1s face a well-known tension between decentralization, security, and speed, sometimes called the scalability trilemma. Making one better often comes at the cost of another, which is part of why Layer 2s exist.
When people talk about a transaction happening "on-chain" or settling "on mainnet," they usually mean it happened on the Layer 1.
Layer 2L2
TechA network built on top of a base blockchain that processes transactions faster and cheaper, then settles on the main chain.
A Layer 2 is a separate network that handles transactions off the main blockchain (Layer 1) to improve speed and lower fees, while periodically posting summaries back to the base chain for security.
The most common Layer 2 designs are rollups, which batch many transactions into a single proof submitted to the base chain. Popular Layer 2s include networks built on top of Ethereum. Assets can be moved between Layer 1 and Layer 2 via bridges.
Ledgerdistributed ledger
BasicsThe record of all transactions and balances; on a blockchain it is shared and verified by many computers.
A ledger is simply a record of transactions and balances, the same idea a bank uses to track who has what. What makes a blockchain special is how its ledger is kept.
Instead of one company holding the official copy, a blockchain ledger is distributed: many computers each hold a copy and agree on its contents through consensus. This is why it is often called a distributed ledger.
Because the record is shared and verifiable by anyone, no single party can secretly alter balances or erase transactions. The history is transparent and very hard to tamper with.
This shared ledger is the foundation that lets crypto work without a central authority keeping the books. (Note: here "ledger" means the record itself, not any particular product.)
Lending protocollending platform
DeFiA DeFi service where users deposit crypto to earn interest and others borrow against collateral.
A lending protocol is a DeFi application that connects people who want to earn interest on their crypto with people who want to borrow it. Smart contracts handle the matching, the interest, and the safeguards automatically.
Lenders deposit assets into a shared pool and earn yield. Borrowers take loans from that pool but must lock up collateral worth more than they borrow, a setup called over-collateralization.
If the value of a borrower's collateral falls too far, the protocol liquidates it to repay the loan and protect the lenders. Prices for these decisions usually come from oracles.
Lending protocols are a core building block of DeFi, but they carry smart-contract risk and the market risk of liquidations during sharp price moves.
Liquid stakingliquid stake
DeFiStaking that gives you a tradable token representing your staked funds, so they are not locked up idle.
Normally, staking locks your tokens so they cannot be used while they help secure the network. Liquid staking solves this by giving you a new token that represents your staked position.
This receipt token can be traded, used as collateral, or put to work in DeFi while the original tokens keep earning staking rewards in the background. In effect, your capital does two jobs at once.
The convenience comes with added layers of risk. You are trusting the liquid staking provider and its contracts, and the receipt token's price can sometimes drift from the value of the underlying stake.
Liquid staking has become popular because it removes the main downside of staking, the lock-up, while keeping the rewards.
Liquidationliquidated
DeFiThe forced sale of collateral when its value falls too low to safely back a loan or position.
Liquidation is what happens when a borrower's collateral falls below the level needed to back their loan. To protect lenders, the protocol automatically sells the collateral to repay the debt.
In DeFi this is handled by smart contracts and triggered by price data from oracles. Once a position crosses the liquidation threshold, it can be closed out very quickly, often by automated bots that earn a fee for doing so.
Getting liquidated is costly. The borrower typically loses a chunk of their collateral to penalties and fees, on top of the position being closed at an unfavorable moment.
During sharp market drops, waves of liquidations can happen at once, which can push prices down further and trigger even more liquidations.
Liquiditymarket liquidity
DeFiHow easily an asset can be bought or sold without moving its price much.
Liquidity describes how easily you can trade an asset at a stable price. A highly liquid market has plenty of buyers and sellers, so you can transact quickly without pushing the price far.
In a thin, low-liquidity market the opposite is true: even a modest order can move the price noticeably, leading to slippage and a worse fill than expected.
On decentralized exchanges, liquidity comes from pools of tokens that users deposit. The deeper the pool, the more trading it can absorb without large price swings.
Liquidity matters for everyday decisions. A liquid asset is easier to enter and exit, while an illiquid one can be hard to sell when you want to, especially during stressed markets.
Liquidity poolAMM pool
DeFiA reserve of two or more tokens locked in a smart contract that enables decentralized trading.
A liquidity pool is a collection of tokens held in a smart contract that allows traders to swap between them without needing a traditional buyer and seller to match up. Prices are set algorithmically based on the ratio of assets in the pool.
Anyone can deposit tokens into a pool (becoming a liquidity provider) in exchange for a share of the trading fees generated. The risk for providers is impermanent loss, where the value of their deposited tokens can diverge from simply holding them, depending on how prices move.
M
Mainnetmain network
TechThe live, real-value version of a blockchain, as opposed to a test network.
The mainnet is the live, production version of a blockchain, where transactions involve real assets with real value. It is the network people mean when they talk about using a chain for actual transfers.
It stands in contrast to a testnet, which mirrors the mainnet for safe experimentation but uses valueless tokens. The two run separately and do not share funds.
When a new project "launches its mainnet," it means the network has gone live and is now handling genuine value, often a significant milestone on its roadmap.
Making sure you are connected to the right network, and to the mainnet rather than a testnet, matters when you send or receive real funds.
Market capmarket capitalization
MarketsThe total value of a crypto asset, found by multiplying its price by its circulating supply.
Market cap, short for market capitalization, is a measure of a crypto asset's total value. It is calculated by multiplying the current price by the number of coins in circulation.
It is widely used to compare the relative size of different assets. A coin with a low price but a huge supply can have a larger market cap than a coin with a high price and a small supply.
Market cap gives a better sense of scale than price alone, but it has limits. A thinly traded asset can show a large market cap even if there is little real money available to buy or sell at that price.
Analysts also look at fully diluted value, which uses the maximum supply rather than the circulating supply, to account for tokens not yet released.
Max supplymaximum supply
MarketsThe maximum number of coins a token will ever have, if its design sets a hard cap.
Max supply is the largest number of coins or tokens that can ever exist for a given asset, when its rules set a fixed cap. Bitcoin's max supply, for example, is 21 million.
A hard cap creates scarcity. Once the maximum is reached, no new coins are created, which some projects highlight as protection against the dilution that comes with unlimited issuance.
Not every asset has a max supply. Some are designed with ongoing issuance and no fixed ceiling, while others may even be deflationary if they burn more than they create.
Comparing max supply with the circulating supply shows how many tokens are still to enter the market, which affects future dilution and is a key part of tokenomics.
Memecoinmeme coin
MarketsA token created around an internet joke or trend, driven mostly by hype rather than utility.
A memecoin is a token built around a meme, a community, or an internet trend rather than a clear technical purpose. Its value comes mainly from attention, social momentum, and speculation.
Memecoins can be created quickly and cheaply, and some have seen dramatic price spikes when they go viral. They can fall just as fast when interest moves on.
Because hype drives them, they are among the riskiest assets in crypto. Many have little behind them, and the space is a frequent target for pump-and-dump schemes and rug pulls.
People who buy memecoins are usually speculating on attention, not investing in technology. Treating them as high-risk and only using money you can afford to lose is the sensible approach.
Mempoolmemory pool
TechThe waiting room of unconfirmed transactions that nodes hold before they are included in a block.
When you broadcast a transaction to a blockchain, it enters the mempool (short for memory pool), where it waits until a miner or validator picks it up and includes it in a block. Transactions offering higher fees are usually chosen first.
When the network is very busy, the mempool fills up and low-fee transactions can wait a long time or even be dropped. Mempool congestion is why gas prices spike during high-activity periods.
Miningcrypto mining
TechThe process of using computing power to validate transactions and add new blocks to a proof-of-work blockchain.
Mining is the process through which transactions get confirmed on proof-of-work blockchains like Bitcoin. Miners compete to solve a computationally intensive puzzle; the winner adds the next block and earns a reward of newly issued coins plus transaction fees.
The difficulty of the puzzle adjusts so that new blocks arrive at a roughly constant rate regardless of how much computing power is on the network. Mining secures the network by making it extremely expensive to rewrite history.
Mintingmint
TechCreating a new token or NFT and recording it on a blockchain for the first time.
Minting is the act of creating a new token or NFT and writing it onto a blockchain. Before minting, the item does not exist on-chain; minting is what brings it into being.
For NFTs, minting is how a digital item first becomes a unique, ownable token. A creator runs a smart contract that issues the NFT to a wallet, often in exchange for a fee.
For fungible tokens, minting is how new units are issued according to the rules in the token's contract, for example when staking rewards are created.
Minting is the opposite of burning, which permanently removes tokens from circulation. Together they let a project manage supply over time.
Multisigmulti-signature
Wallets & keysA wallet that requires multiple private key signatures before a transaction can be sent.
Multisig (short for multi-signature) is a security arrangement where a transaction requires approval from more than one private key before it can be broadcast. A common setup is 2-of-3, meaning any two of three designated keys must sign.
This removes single points of failure: losing one key or having one device compromised does not mean losing funds. Multisig is widely used by businesses managing shared crypto treasuries and by security-conscious individuals.
N
Networkblockchain network
BasicsThe specific blockchain a token lives on, such as Bitcoin, Ethereum or Solana.
In crypto, a network is the blockchain that processes and records transactions for a set of assets. Each network has its own rules, fees, speed, and native token used to pay those fees, such as ETH on Ethereum or SOL on Solana.
The same kind of token can exist on multiple networks. A dollar-pegged stablecoin, for example, often has separate versions on several chains, and they are not automatically interchangeable.
This is why sending to the wrong network is one of the most common and costly mistakes. If you send an asset on a network the receiving wallet does not support, the funds can be effectively lost. Always confirm that the network shown when you send matches the one the recipient expects.
Moving an asset from one network to another requires a bridge or a cross-chain swap rather than a normal transfer.
NFTnon-fungible token
BasicsA unique digital token that proves ownership of a specific item, from digital art to a domain name.
NFT stands for non-fungible token. Unlike regular crypto tokens, which are interchangeable (one ETH equals any other ETH), each NFT is unique and not directly interchangeable with another. They are recorded on a blockchain, giving them verifiable ownership and provenance.
NFTs have been used for digital art, music, collectibles, gaming items, and domain names. While the market for purely speculative NFTs has been volatile, the underlying technology for proving provenance and ownership of digital items remains relevant.
Nodefull node
BasicsA computer that participates in a blockchain network by storing and verifying the transaction history.
A node is any computer that connects to a blockchain network, downloads a copy of the history, and verifies new transactions and blocks according to the network's rules. Running a node means you do not have to trust anyone else's copy of the data.
Full nodes store the complete blockchain history. Light nodes store only a subset but can still verify transactions. The more nodes a network has, the more decentralized and resilient it is.
Non-custodialnoncustodial
Wallets & keysA setup where you, not a company, hold the private keys to your crypto.
Non-custodial means you control the private keys to your assets directly, rather than trusting a third party to hold them. A non-custodial wallet generates and stores those keys on your own device, under your control.
This gives you full ownership. No company can freeze your account, block a withdrawal, or lose your funds in a collapse, because no company is in the middle. Your assets live on the blockchain, tied to keys only you hold.
The flip side is that the responsibility for backing up your seed phrase and keeping it safe is entirely yours. If you lose the backup and the device, no one can restore access for you.
Non-custodial is the same idea as self-custody, expressed from the product side: a non-custodial wallet is simply the tool that makes self-custody practical.
Non-custodial walletself-custody wallet
Wallets & keysA wallet where only you hold the private keys, giving you full control of your crypto.
A non-custodial wallet stores your private keys on your own device, so only you can authorize transactions. No company sits between you and your funds.
This gives you complete ownership. Your assets cannot be frozen by a provider, and they are not exposed if some company fails, because there is no company holding them.
The responsibility shifts to you. You must back up your seed phrase and keep it safe, because there is no support line that can restore access if you lose it. Anyone who gets the phrase controls the funds.
Non-custodial wallets are the standard tool for self-custody and for interacting with DeFi, where you connect your wallet directly to apps.
Nonce
TechA number used once, either to solve the mining puzzle or to keep a wallet's transactions in order.
Nonce is short for "number used once." It shows up in two different places in crypto, and the meaning depends on context.
In proof-of-work mining, the nonce is the value miners keep changing as they hash a block, searching for a result that meets the network's difficulty target. Finding the right nonce is what wins the right to add the block.
In account-based networks like Ethereum, each wallet also has a transaction nonce: a counter that increases by one with every transaction you send. It ensures transactions are processed in order and that the same transaction cannot be replayed.
Most users never touch the nonce directly, since wallets manage it automatically, but it can matter when a stuck transaction needs to be replaced.
O
Off-rampcrypto off-ramp
PaymentsA service that converts crypto back into traditional money you can spend or withdraw to a bank.
An off-ramp is the exit from crypto back into traditional money. You sell crypto through the service and receive fiat, typically into a bank account or onto a card.
It is the mirror image of an on-ramp, which buys crypto with fiat. Together, on-ramps and off-ramps are how value moves between the crypto world and the banking system.
Off-ramps are usually regulated services that require identity verification, since they touch the traditional financial system. Fees, limits, and supported payout methods vary by provider and country.
Spending crypto on gift cards or with a crypto-funded card is another practical way to off-ramp value into everyday use without a formal cash-out.
On-rampcrypto on-ramp
PaymentsA service that lets you buy crypto with fiat money, or sell crypto back to fiat.
An on-ramp is the entry point from traditional money into crypto: a service that accepts a bank transfer, card payment, or cash and sends crypto to your wallet. An off-ramp goes the other direction, converting crypto back to fiat.
On-ramps are typically regulated services that require identity verification (KYC). The fees and supported payment methods vary widely. Choosing the right on-ramp for your country and preferred payment method can make a significant difference to cost and speed.
Optimistic rollup
TechA Layer 2 that assumes transactions are valid by default and allows a challenge period to catch fraud.
An optimistic rollup is a type of Layer 2 that bundles many transactions off the main chain and posts the results back to the Layer 1. As the name suggests, it optimistically assumes those results are correct.
To keep this safe, there is a challenge window after each batch is posted. During this period, anyone can submit proof that a result was fraudulent, and if they are right, the bad batch is reverted and the cheater is penalized.
This design keeps things efficient because most batches are never challenged. The cost is that withdrawing funds back to the Layer 1 can take time, since the system waits out the challenge window first.
Optimistic rollups are a common way to scale Ethereum, lowering fees and increasing throughput while inheriting the base chain's security.
Oracleprice oracle
TechA service that feeds real-world data, such as prices, into smart contracts that cannot access it directly.
A blockchain cannot see anything outside itself. It does not know the price of an asset, the score of a game, or the temperature in a city. An oracle is the bridge that brings that outside information on-chain so smart contracts can use it.
The most common use is price feeds. Lending protocols, stablecoins, and exchanges all need reliable prices to decide things like when a loan should be liquidated, and oracles supply those numbers.
Oracles are a sensitive point in any system that relies on them. If an oracle reports a wrong or manipulated price, the contracts trusting it can be tricked, which has led to real exploits.
To reduce this risk, robust setups gather data from many independent sources and combine them, rather than trusting a single feed.
Over-collateralizationovercollateralization
DeFiBacking a loan with collateral worth more than the amount borrowed, to absorb price swings.
Over-collateralization means locking up collateral worth more than the value of the loan you take out. For example, you might deposit 150 dollars of crypto to borrow 100 dollars.
The extra cushion exists because crypto prices are volatile. If the collateral drops in value, there is still enough margin to cover the debt before the position becomes risky.
It is the standard model in DeFi lending because the protocol cannot chase a borrower for repayment the way a bank can. The collateral, held in a smart contract, is the only guarantee.
If prices fall far enough that the cushion is used up, the position is liquidated. Borrowers manage this by keeping their loan well below the maximum they could take.
P
Paymaster
TechA service that can pay transaction fees on a user's behalf, made possible by account abstraction.
A paymaster is a component that can cover the gas fees for a user's transaction, so the user does not have to hold the network's native token just to transact. It is enabled by account abstraction.
This solves a common pain point for newcomers. Normally you need some of a network's coin on hand to pay fees, even when you only want to move some other asset. A paymaster can remove that hurdle.
Apps can use paymasters in different ways, such as sponsoring fees to onboard new users, or letting users pay fees in a stablecoin instead of the native coin.
For everyday users, the result is a smoother experience where the friction of acquiring a separate fee token is reduced or hidden.
Phishingphishing attack
SecurityA scam that tricks you into revealing secrets or approving a transaction by pretending to be trustworthy.
Phishing is a form of scam where an attacker impersonates a trusted person, brand, or service to trick you into handing over secrets or approving something harmful.
In crypto, common phishing tactics include fake wallet or support sites that ask for your seed phrase, look-alike links sent by message or email, and fraudulent token claim pages that drain your wallet once you connect it or sign a transaction.
The key defenses are simple but strict: never enter your seed phrase into any website or app, never share it with anyone, and treat unexpected links and offers with suspicion. A legitimate service will never ask for your seed phrase.
Because blockchain transactions cannot be reversed, a successful phishing attack can mean a permanent loss, which is why caution beats convenience here.
Private key
Wallets & keysA secret number that proves ownership of a crypto address and authorizes transactions from it.
A private key is a large, randomly generated number that acts as the ultimate proof of ownership for a crypto address. Any transaction signed with a private key is accepted by the network as authorized. Whoever holds the private key controls the funds.
Private keys are generated by your wallet software and, in a non-custodial wallet, never leave your device. Your seed phrase is a human-readable backup of all the private keys in your wallet, so losing either means potentially losing access to your funds.
Proof of stakePoS
TechA consensus method where validators lock up crypto as collateral to earn the right to confirm transactions.
Proof of stake is a consensus mechanism where participants (validators) lock up, or "stake," the network's native token as collateral. They are then chosen to validate new blocks in proportion to their stake. Honest validators earn rewards; dishonest behavior results in their collateral being slashed.
Proof of stake uses far less energy than proof of work, since it replaces physical computation with economic commitment. Ethereum, Solana, and most newer blockchains use proof of stake or a variant of it.
Proof of workPoW
TechThe original blockchain consensus method, where miners spend computing power to earn the right to add blocks.
Proof of work is the consensus mechanism used by Bitcoin and several other early blockchains. Miners compete to solve a mathematical puzzle that requires a lot of computational effort. The first to solve it gets to add the next block and receive the block reward.
The "work" makes it expensive to cheat, because rewriting history would require redoing all that computation. The criticism is energy use, which led to the development of proof of stake as an alternative.
Public key
Wallets & keysThe part of your key pair that you share with others, used to verify signatures and derive your address.
A public key is mathematically derived from your private key and can be freely shared. It lets others verify that a transaction was signed by you without ever learning your private key. Your wallet address is typically a shortened, derived form of your public key.
Public and private keys form a cryptographic pair. The private key signs, and the public key verifies. Crucially, the math runs one way only: you can produce a public key from a private key, but you cannot work backward to recover the private key from the public one.
This asymmetric design is what lets you prove ownership and authorize transactions on an open network where everyone can see what you publish. Anyone can check that a signature is valid, but only the holder of the private key could have created it.
In everyday use you rarely handle the public key directly. You share your address, which is derived from it, and your wallet manages the rest behind the scenes.
R
Roadmapproject roadmap
MarketsA project's published plan of what it intends to build and when.
A roadmap is a project's stated plan for the future: the features, milestones, and goals it intends to deliver, often laid out over quarters or years.
It helps users and potential investors understand where a project is headed and judge whether the team has a clear, realistic direction.
A roadmap is a statement of intent, not a promise. Plans change, timelines slip, and some goals are never met, so it should be read with healthy skepticism.
Comparing what a project actually ships against its roadmap over time is a useful way to judge how reliable and capable the team is.
Rollupoptimistic rollup
TechA Layer 2 technique that bundles many transactions into a single proof submitted to the main chain.
A rollup is a type of Layer 2 that executes transactions on a separate chain, compresses them into a compact proof, and posts that proof to the base blockchain. This inherits the security of the main chain while dramatically reducing fees and increasing throughput.
There are two main types: optimistic rollups, which assume transactions are valid and allow a challenge window, and ZK (zero-knowledge) rollups, which use cryptographic proofs to verify batches instantly. Both achieve the same goal of scaling a blockchain without sacrificing security.
RPCRPC endpoint
TechA connection point that lets a wallet or app read from and send transactions to a blockchain.
RPC stands for remote procedure call. In crypto, an RPC endpoint is the connection point a wallet or app uses to talk to a blockchain, reading data like balances and broadcasting your transactions.
Behind the scenes, your wallet sends requests to a node through this endpoint. The node does the work of querying the chain or relaying your transaction to the network.
Most wallets come with default RPC endpoints, so you never have to think about it. Advanced users sometimes add custom endpoints to connect to a specific network or a faster provider.
Because an RPC endpoint sees your requests, using a trustworthy one matters. A malicious endpoint could show you false information, though it cannot move funds without your signature.
Rug pullrugpull
SecurityA scam where a project's creators abandon it and run off with investors' money.
A rug pull is a scam in which the people behind a crypto project suddenly abandon it and take the money, leaving holders with worthless tokens. The name comes from pulling the rug out from under investors.
A common version involves creating a token, hyping it to attract buyers, then draining the liquidity pool so the token can no longer be sold. Others simply vanish after raising funds.
Warning signs include anonymous teams with no track record, promises of guaranteed high returns, heavy hype with little substance, and tokens where the creators hold a large, unlocked share of the supply.
Rug pulls are most common among new, low-quality tokens and memecoins. Researching the team, the tokenomics, and whether liquidity is locked can reduce the risk, though it cannot eliminate it.
S
Satoshisats
BasicsThe smallest unit of Bitcoin, equal to one hundred millionth of a bitcoin.
A satoshi, often shortened to "sat," is the smallest unit of Bitcoin. One bitcoin is made up of 100 million satoshis, which allows very small and precise amounts.
The unit is named after Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Using sats makes it easier to talk about tiny values without long strings of decimals.
As a single bitcoin can be expensive, pricing things in sats can feel more intuitive, for example tipping a few thousand sats rather than a fraction of a bitcoin.
Wallets often let you display balances in either bitcoin or sats, depending on what you find clearer.
Scalabilityscalable
TechA network's ability to handle more transactions and users without becoming slow or expensive.
Scalability is a blockchain's ability to grow, handling more transactions and users without becoming congested, slow, or costly. It is one of the central challenges in crypto.
The difficulty is captured by the scalability trilemma, the idea that it is hard to maximize decentralization, security, and scalability all at once. Pushing hard on one often weakens another.
Several approaches aim to improve it. Layer 2 networks move activity off the base chain, sharding splits work across parts of a network, and various optimizations increase throughput directly.
For everyday users, better scalability shows up as faster confirmations and lower fees, especially during busy periods when an unscalable network would clog up.
Security token
SecurityA token that represents a regulated financial asset, such as shares or debt, on a blockchain.
A security token represents ownership of a regulated financial asset, such as equity in a company, a bond, or a share of real estate, recorded on a blockchain.
Because it represents a traditional security, it falls under securities regulation. That means issuance and trading must follow the same kinds of rules that govern stocks and bonds, including investor protections.
The appeal is bringing the efficiency of blockchains, such as faster settlement and easier transfer, to traditional assets, a trend often called tokenization.
Security tokens differ from utility and governance tokens precisely because of this regulatory status, which is why projects are careful about how they classify what they issue.
Seed phraserecovery phrase
Wallets & keysA list of words that backs up your wallet and can restore access to all its funds.
A seed phrase, usually 12 or 24 words, is the master backup of a self-custody wallet. From it, the wallet can regenerate all of its keys and addresses, so anyone who has the phrase can control the funds.
Write it down and store it offline, never as a photo or in a cloud note, and never type it into a website. If you lose the phrase and the device, the funds are gone; if someone else gets it, they can take everything.
Self-custodyself custody
Wallets & keysHolding your own crypto keys so you have full control of your funds.
Self-custody is the practice of holding the private keys to your own crypto, rather than leaving them with an exchange or other company. With self-custody, your assets are under your control at all times.
It is the core idea behind a non-custodial wallet. The benefit is independence and security from third-party failures; the responsibility is keeping your seed phrase safe, because there is no support line that can reset access for you.
Shardingshard
TechSplitting a blockchain into parallel pieces so it can process more transactions at once.
Sharding is a scaling technique that divides a blockchain into smaller parts, called shards, that can process transactions in parallel rather than every node handling everything.
The idea is borrowed from traditional databases. By spreading the work, the network as a whole can handle far more activity than a single chain processing every transaction in sequence.
The challenge is doing this without weakening security or making it hard for shards to communicate, since transactions sometimes need to cross between them. Getting that right is technically demanding.
Sharding is one of several approaches to scalability, often discussed alongside Layer 2 networks, and some major networks build it into their long-term roadmaps.
Sidechainside chain
TechA separate blockchain that runs alongside a main chain and connects to it through a bridge.
A sidechain is an independent blockchain that runs in parallel to a main chain and is linked to it by a bridge. Assets can move back and forth between the two, but the sidechain has its own rules and its own security.
Unlike a rollup, a sidechain does not post its transaction data or proofs back to the main chain. It secures itself with its own set of validators, which makes it faster and cheaper but means it does not inherit the main chain's security.
That independence is the key trade-off. You gain performance, but you are trusting the sidechain's own validator set rather than the larger base network.
Sidechains are useful for applications that need high speed and low fees and are comfortable with a separate security model.
Slashingslashed
SecurityA penalty on proof-of-stake networks that takes part of a validator's staked collateral for misbehavior.
Slashing is the punishment built into proof-of-stake networks for validators that break the rules. If a validator acts dishonestly or makes serious mistakes, the protocol destroys or confiscates part of its staked collateral.
The threat of slashing is what makes staking secure. Because validators have real money at risk, attacking the network or trying to cheat is expensive and self-defeating.
Common triggers include signing conflicting blocks or being offline so much that the validator fails its duties. Penalties range from small deductions to losing a large share of the stake in severe cases.
If you delegate your stake to a validator, its slashing can affect you too, which is why choosing a reliable validator matters.
Slippageslippage tolerance
DeFiThe difference between the price you expected for a trade and the price you actually got.
Slippage happens when the price of an asset moves between the moment you place a trade and when it executes. On a DEX, large trades relative to the size of a liquidity pool will move the price as they fill, causing slippage.
Most DEX interfaces let you set a slippage tolerance, which is the maximum percentage difference you are willing to accept. Setting it too low means your transaction may fail during volatile periods; too high and you may get a worse price than expected.
Smart contracton-chain contract
TechSelf-executing code stored on a blockchain that runs automatically when its conditions are met.
A smart contract is a program deployed on a blockchain that executes automatically when predefined conditions are satisfied. Once deployed, its code is public and runs exactly as written, with no intermediary needed to enforce it.
Smart contracts power DeFi protocols, NFT systems, DAOs, and more. Because the code cannot be changed once deployed (in most designs), bugs in smart contracts can be permanent and have led to significant hacks, which is why security audits are important.
Soft forksoftfork
TechA backward-compatible rule change that tightens what a blockchain accepts, without splitting it.
A soft fork is an upgrade that makes a blockchain's rules stricter while staying backward compatible. Nodes that have not upgraded still see the new blocks as valid, because anything allowed under the new rules was also allowed under the old ones.
This means a soft fork does not force a chain split the way a hard fork can. As long as a majority of the network adopts the tighter rules, the whole chain moves forward together.
Soft forks are often used to add features or close loopholes in a low-disruption way. The trade-off is that they are limited to changes that can be expressed as a tightening of existing rules.
For most users a soft fork passes by quietly, since wallets and balances are unaffected.
Stablecoinstable coin
PaymentsA crypto token designed to hold a steady value, usually pegged to a currency like the US dollar.
A stablecoin aims to keep a stable price, most commonly one to one with a fiat currency such as the US dollar. This makes it useful for payments, saving, and moving value without the volatility of assets like Bitcoin.
Different stablecoins keep their peg in different ways: some hold reserves of cash and bonds, others use crypto collateral or algorithms. Understanding how a given stablecoin is backed tells you a lot about its risk.
Stakingstake
DeFiLocking tokens in a proof-of-stake network to help validate transactions and earn rewards.
Staking means committing tokens to a blockchain network as collateral. Stakers (or delegators who back a validator) earn a share of newly issued tokens and transaction fees in return. The locked tokens can be slashed as a penalty if the validator acts dishonestly.
Staking rates and lock-up periods vary widely by network. It is a way to earn yield on holdings, but the tokens may be unavailable for a period and are subject to both market risk and protocol risk.
Swaptoken swap
DeFiExchanging one crypto asset for another, directly in your wallet.
A swap is a direct exchange of one cryptocurrency for another. Instead of selling to cash and buying again, you trade one asset straight for another in a single action.
In a modern non-custodial wallet, swaps happen through decentralized protocols, so you keep control of your funds throughout the trade rather than handing them to an exchange first. The wallet finds a route, shows you a quote, and settles the result back to your address.
Swaps can be within the same network, called same-chain, or between different networks, called cross-chain, which involves extra steps behind the scenes. The price is set by market conditions at the moment of the trade.
You typically pay a small protocol fee plus the network gas fee, and on larger trades you may also see slippage if the price moves while the swap fills.
T
Testnettest network
TechA practice version of a blockchain where developers test with worthless tokens before going live.
A testnet is a separate, parallel version of a blockchain used for testing. It behaves like the real network but its tokens have no value, so mistakes cost nothing.
Developers use testnets to try out smart contracts and applications safely before deploying them to the live network. Free test tokens are usually available from a faucet.
New users can also use a testnet to practice sending transactions and using a wallet without any risk to real funds, which makes it a good learning ground.
The live network, where real value moves, is called the mainnet. Assets on a testnet cannot be moved to the mainnet, since the two are entirely separate.
Throughputnetwork throughput
TechHow many transactions a blockchain can process in a given time, often measured per second.
Throughput is the rate at which a blockchain can process transactions, commonly expressed as transactions per second. It is a key measure of a network's capacity.
Higher throughput means a network can handle more activity at once without congestion. Low throughput leads to backed-up transactions and rising fees when demand spikes.
Throughput is closely tied to scalability and is part of why Layer 2 networks and other scaling techniques exist: they aim to increase how much a system can handle without weakening security.
Raw throughput numbers can be misleading on their own, since they may be measured under ideal conditions and do not capture decentralization or finality, which also matter.
Tickerticker symbol
MarketsThe short code used to identify a crypto asset, such as BTC for Bitcoin.
A ticker is the short symbol used to identify a crypto asset in wallets, exchanges, and price charts. Bitcoin's ticker is BTC, Ethereum's is ETH, and Solana's is SOL.
Tickers make assets quick to reference, much like stock symbols in traditional markets. They appear next to prices and balances throughout crypto apps.
One catch is that tickers are not unique or protected. Different projects can use the same or very similar symbols, and scammers sometimes copy a well-known ticker to impersonate a legitimate asset.
For that reason, it is safer to confirm an asset by its network and contract address rather than the ticker alone, especially before sending funds or trading something unfamiliar.
Tokencrypto token
BasicsA digital asset issued on a blockchain, representing value, access rights, or ownership.
In crypto, a token is any digital asset that lives on a blockchain. Native tokens like ETH and SOL are issued by the network itself to pay fees and incentivize validators. Other tokens are built on top of existing networks using smart contracts, such as stablecoins, governance tokens, and DeFi assets.
"Coin" and "token" are often used interchangeably in everyday speech, though technically "coin" refers to a network's native asset. What matters most is which network a token lives on, since that determines which wallet and which fees apply.
Tokenomicstoken economics
MarketsThe supply model and economic rules that govern how a token is created, distributed, and used.
Tokenomics (token economics) describes the rules and incentives built into a token's design. It covers total supply, how new tokens enter circulation (mining, staking rewards, team allocations), whether tokens are ever burned, and what the token is actually used for in the protocol.
Understanding tokenomics helps you assess long-term inflation pressure, how much of the supply is held by insiders and when it unlocks, and whether the token has genuine utility or is mainly speculative.
Total value lockedTVL
DeFiThe total worth of assets deposited in a DeFi protocol, used as a rough measure of its size.
Total value locked, usually shortened to TVL, is the combined value of all the crypto deposited into a DeFi protocol. It counts assets supplied to lending pools, liquidity pools, staking contracts, and similar.
TVL is a popular gauge of how much a protocol or even an entire network is being used. A higher TVL generally signals more user trust and activity.
It has limits, though. Because it is measured in value, TVL rises and falls with crypto prices even when nothing else changes, and the same deposited assets can sometimes be counted in more than one place.
Used carefully, TVL is a helpful comparison tool, but it is best read alongside other metrics rather than on its own.
TPStransactions per second
TechTransactions per second: a common measure of how fast a blockchain can process activity.
TPS stands for transactions per second, a simple measure of how many transactions a blockchain can confirm in one second. It is the most quoted figure for network speed.
Projects often advertise high TPS to show that their network can scale. A higher number suggests the chain can serve more users and applications without slowing down or getting expensive.
The figure deserves caution. Headline TPS is often a theoretical peak measured in ideal conditions, and a network optimized purely for high TPS may trade away decentralization or true finality to get there.
It is best read alongside other measures, since speed alone does not tell you how secure or decentralized a network is.
Transactioncrypto transaction
BasicsA record of an action on a blockchain, such as sending crypto or interacting with a smart contract.
A transaction is the fundamental unit of activity on a blockchain. It can represent sending tokens to an address, interacting with a smart contract, or approving a DEX to access your funds. Every transaction is broadcast to the network, included in a block, and permanently recorded.
Transactions require a fee (gas) paid to the network, and once confirmed they cannot be reversed. This is why verifying addresses and amounts carefully before sending is essential.
U
Utility token
TechA token whose main purpose is to provide access to a product, service, or feature within a platform.
A utility token is designed to be used for something specific within a platform, rather than primarily as an investment or a vote. It might pay for services, unlock features, or grant access to a network.
For example, a token could be required to pay fees on a particular service, to power transactions in an application, or to redeem for a product. Its value is meant to come from that usefulness.
The line between utility tokens and other categories is often blurry, and many tokens are bought speculatively regardless of their stated purpose.
Whether a token has genuine utility, or is mainly traded in hope of price gains, is a key question when evaluating a project.
V
Validatorblock validator
TechA node that stakes crypto as collateral and earns rewards for confirming transactions on a proof-of-stake network.
A validator is a participant in a proof-of-stake network that locks up tokens as collateral and is responsible for proposing and attesting to new blocks. In exchange, validators earn a portion of newly issued tokens and transaction fees.
If a validator behaves dishonestly or is offline too often, they risk having a portion of their stake slashed. Anyone can become a validator if they meet the minimum stake requirement, or delegate their stake to an existing validator to earn rewards without running the software themselves.
Vestingvest
MarketsA schedule that releases tokens gradually over time rather than all at once.
Vesting is a schedule that controls when tokens become available to their owners, releasing them in stages instead of all at the start. It is commonly applied to tokens allocated to a project's team, early backers, and advisors.
The goal is to align incentives. By locking tokens and unlocking them gradually, often over months or years, vesting discourages insiders from selling everything immediately and walking away.
For anyone evaluating a token, the vesting schedule matters. Large unlocks add new supply to the market and can put downward pressure on the price when they arrive.
Vesting details are usually laid out in a project's tokenomics, and checking when big unlocks happen is a useful part of due diligence.
Volatilityprice volatility
MarketsThe tendency of an asset's price to move sharply up or down over short periods.
Volatility measures how much and how quickly an asset's price fluctuates. Crypto markets are known for high volatility: swings of 10 percent or more in a single day are not unusual, especially for smaller assets with thinner trading.
Several things drive it, including the relatively young market, around-the-clock trading with no closing bell, and the influence of news and sentiment on assets that can be hard to value.
Volatility creates opportunity but also real risk, since prices can fall as fast as they rise. Stablecoins were created specifically to provide a low-volatility option within crypto for people who want to step out of the swings without leaving the ecosystem.
The practical responses are familiar ones: hold only what you can afford to lose, avoid decisions driven by short-term price moves, and spread risk rather than concentrating it.
W
Walletcrypto wallet
Wallets & keysA cryptographic identity on a blockchain, and the app or device you use to interact with it.
The word "wallet" is used in two related but distinct ways in crypto, and it helps to understand both.
In the strict technical sense, a wallet is a cryptographic identity on a blockchain: an address (your public identifier) paired with a private key (your proof of ownership). This identity exists on the blockchain itself, not in any app. Your funds are recorded against this address in the chain's ledger; the app doesn't hold them any more than your online banking app holds your cash.
In everyday usage, "wallet" also refers to the app or hardware device you use to manage that identity. The app stores your private key, signs transactions on your behalf, and shows you your balances. Think of it as the interface that lets you read and write to your on-chain account.
A non-custodial wallet app gives you full control: your private key lives only on your device. A custodial service holds the key for you, like a bank holds your account. The choice is between control and convenience.
Web3web 3
BasicsA vision of the internet built on blockchains, where users own their data, assets, and identity.
Web3 is a term for a version of the internet built on blockchains and crypto, where users control their own assets, data, and identity rather than relying on large central platforms.
The idea is often framed as a progression: an early read-only web, then today's interactive but platform-controlled web, and a Web3 where ownership and value move with the user. Your wallet acts as your login and your way to hold assets across apps.
In practice, Web3 covers DeFi, NFTs, DAOs, and decentralized apps generally. Supporters see more user control and openness; skeptics point to complexity, scams, and hype.
For a newcomer, the most concrete part of Web3 is simple: you use a wallet to interact directly with applications, instead of creating an account with each company.
Wei
TechThe smallest possible unit of Ether, used for precise on-chain calculations.
Wei is the smallest indivisible unit of Ether on Ethereum. One ETH is made up of a billion billion wei, an enormous number that allows extremely precise amounts.
Working in whole units this small means the network never has to deal with fractions, which keeps calculations exact and avoids rounding problems.
You will rarely see wei in everyday use, since wallets display friendly ETH or gwei values. Under the hood, though, the network records balances and amounts in wei.
It is named after Wei Dai, an early contributor to the ideas behind cryptocurrency, just as gwei and other units build on the same base.
Whitelistwhitelisted
SecurityA pre-approved list of addresses or people granted access to something, such as an early sale or feature.
A whitelist is a list of pre-approved participants who are granted access to something that is otherwise restricted, such as an early token sale, an NFT mint, or a withdrawal destination.
In token launches, getting on a whitelist often means earning a guaranteed spot to buy before the general public, frequently by completing tasks or joining a community early.
In wallet security, a withdrawal whitelist lets you pre-approve specific addresses so funds can only be sent to destinations you trust, which limits the damage if your account is compromised.
The term is increasingly replaced by "allowlist," which carries the same meaning but avoids the older wording. Both refer to a list of what is explicitly permitted.
Whitepaperwhite paper
MarketsThe technical document a crypto project publishes to explain its design, goals, and economics.
A whitepaper is the founding document of a blockchain project. It describes the problem being solved, the technical architecture, the consensus mechanism, tokenomics, and roadmap. Bitcoin's whitepaper, published by Satoshi Nakamoto in 2008, started the entire field.
Reading a whitepaper is one of the best ways to understand what a project actually does and whether its claims are technically coherent. The quality and specificity of a whitepaper can be a useful signal when evaluating a project.
Wrapped tokenWBTC
TechA token on one blockchain that represents an asset from another, backed one to one.
A wrapped token is a stand-in that lets an asset from one network be used on another. For example, wrapped Bitcoin lets Bitcoin's value be used inside Ethereum-based DeFi, with each wrapped token backed by real Bitcoin held in reserve.
The idea is one to one backing: for every wrapped token in circulation, one unit of the original asset is locked away. You can redeem the wrapped version to get the original back, which is what keeps the two prices in line.
Wrapping usually relies on a bridge or a custodian to hold the underlying asset. That means the wrapped token is only as trustworthy as whatever is backing it, and it inherits the risks of the bridge or custodian involved.
Wrapped tokens are common in DeFi because they let assets that would otherwise be stuck on their home network take part in lending, trading, and liquidity pools elsewhere.
Y
Yieldcrypto yield
DeFiThe return earned on crypto holdings, for example from staking, lending, or providing liquidity.
Yield in crypto refers to passive returns earned by putting assets to work: staking them to secure a network, lending them to borrowers, or providing liquidity to a DEX pool. Yields are expressed as an annual percentage rate (APR) or annually compounded rate (APY).
Yield farming is a strategy of actively moving assets between protocols to maximize returns. Higher yields usually come with higher risks, including smart contract vulnerabilities, token inflation, and liquidation risk in lending markets.
Yield farmingyield farm
DeFiActively moving crypto between DeFi protocols to chase the highest available returns.
Yield farming is the practice of putting crypto to work across DeFi protocols and shifting it around to capture the best returns on offer. Farmers lend, stake, or provide liquidity, often stacking several strategies at once.
A common form is liquidity mining, where a protocol rewards people who supply liquidity with extra tokens on top of the normal trading fees, to attract funds in its early days.
The headline yields can look very high, but they often come from newly issued tokens whose value can fall, and they carry layered risks: smart-contract bugs, impermanent loss, and the chance a token collapses.
It rewards attention and understanding. For most newcomers it is wise to treat eye-catching yields with skepticism and start small.
Z
ZK-rollupzk rollup
TechA Layer 2 that uses cryptographic proofs to verify batches of transactions instantly on the main chain.
A ZK-rollup is a type of Layer 2 that bundles transactions off-chain and submits a cryptographic proof, called a validity proof, to the Layer 1. The proof mathematically demonstrates that all the transactions in the batch were processed correctly.
Because the proof can be verified directly, there is no need for a challenge window. Once the proof is accepted, the batch is final, which allows faster withdrawals than optimistic rollups.
The name comes from zero-knowledge cryptography, which lets one party prove a statement is true without revealing all the underlying data. In a rollup, this proves the batch is valid compactly.
ZK-rollups are technically demanding to build but are seen as a strong long-term approach to scaling, combining low fees, high throughput, and quick finality.
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