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Glossary
All the terminology you need in one place.
Anti-Money Laundering (AML): A set of regulations that aim to prevent the use of financial systems for illicit activities.
API (Application Programming Interface): A set of rules, protocols, and tools that enable different software applications to communicate and share data with one another.
Automated Market Maker (AMM): A type of DEX that uses mathematical algorithms to determine token prices based on supply and demand.
BEP-20: A technical standard that determines how tokens are transferred and how data is accessed on the BNB Smart Chain.
Binance Coin (BNB): Binance Exchange's native cryptocurrency, used to pay fees for transacting and trading on the platform.
Bitcoin: The first decentralized, peer-to-peer cryptocurrency that operates on a public blockchain ledger and uses cryptography to secure and verify transactions.
Blockchain: A decentralized digital ledger that records transactions in a transparent, immutable and secure way.
BNB Chain: A merge of two separate chains established by Binance: the BNB Beacon Chain (formerly Binance Chain) and BNB Smart Chain (formerly BSC).
Bonding curve model: A dynamic model that incentivizes users to deposit tokens into a smart contract that pays out on a regular basis. This ensures that the LP staking tokens are replenished in the staking pool after distribution.
CeDeFi: A marriage of DeFi and CeFi that utilizes decentralized mechanisms (such as DEXes) but offers a level of support to users that is not typical of most DeFi.
CeFi: An intermediary between the fiat and crypto world that offers users some of the assurances of centralization (e.g. deposit insurance) while gaining exposure to the decentralized, blockchain-based financial world (DeFi).
Centralized Exchange (CEX): An exchange that facilitates transactions between buyers and sellers using the traditional order book approach (bid/ask price).
Coin: In the context of DeFi, a coin refers to a type of token that is used as a medium of exchange, similar to traditional currencies. Coins are often used as a base currency for trading pairs on decentralized exchanges and can be used to pay transaction fees on blockchain networks.
dApp (Decentralized Application): An application that runs on a decentralized network such as Ethereum, and is governed by smart contracts.
Decentralized Autonomous Organization (DAO): An organization that operates through smart contracts and is governed by its members.
DeFi (Decentralized Finance): A financial system built on a decentralized, blockchain-based infrastructure that allows for peer-to-peer transactions without intermediaries.
DeFi Trilemma: The challenge of balancing decentralization, security, and scalability in a DeFi protocol.
Digital Wallet: A digital wallet that holds tokens and allows for transactions on a blockchain network.
Embr Ecosystem: Embr’s growing suite of products, services, and technologies. Your gateway to a decentralized world.
ERC-20: A technical standard that determines how tokens are transferred and how data is accessed on the Ethereum blockchain.
Ethereum: A decentralized blockchain network that enables the development of smart contracts and decentralized applications.
Ethereum Improvement Proposal (EIP): It is a proposal submitted by developers to improve the Ethereum network.
Ethereum Virtual Machine (EVM): A software platform (like an OS) that allows developers to interact with the Ethereum blockchain to build and launch decentralized applications (DApps).
Fiat currency: A currency that is not backed by a physical asset, but by the “full faith and trust” of the government that issued it.
Fork: A change to the protocol of a blockchain network that creates a new version of the network.
Gas: The fee paid to miners for processing transactions on a blockchain network.
Initial Coin Offering (ICO): A new crypto project markets and sells an allocated amount of its total token supply directly to (usually accredited) investors, typically without the use of an exchange.
Initial DEX Offering (IDO): The process of launching a new token on a decentralized exchange (DEX).
Impermanent Loss: It is a temporary loss that occurs when liquidity providers in a pool provide liquidity for an asset that experiences a price change.
InterPlanetary File System (IPFS): A decentralized system for storing and sharing files.
Know Your Customer (KYC): A regulatory requirement that requires financial institutions to verify the identity of their clients.
Launchpad: A platform that facilitates the process of projects and companies listing new tokens for sale in initial offerings.
Layer 1: Refers to the underlying blockchain protocol layer that provides the fundamental rules and functions of the network. Examples of Layer 1 blockchains include Ethereum, Bitcoin, and Polkadot. Layer 1 blockchains are the base layer on which other protocols and applications, such as Layer 2 scaling solutions and DeFi protocols, are built.
Layer 2: Solutions that increase the transaction throughput of a blockchain network by offloading transactions to a secondary layer.
Lending Protocol: A DeFi protocol that allows users to lend and borrow tokens without the need for intermediaries.
Liquidity: The ability of an asset to be bought or sold without causing significant price changes.
Mining: The process of verifying and adding transaction records to a public ledger. Miners are typically compensated for their efforts with newly minted tokens.
Multi-sig: It is a security feature that requires multiple signatures to authorize a transaction.
Node: A computer that participates in the validation and processing of transactions on a blockchain network.
Non-Fungible Token (NFT): Unique digital assets that represent ownership of a specific item or piece of content, such as artwork, music, or collectibles, on a blockchain network. Unlike fungible tokens like cryptocurrencies, NFTs are not interchangeable with each other, as each NFT is one-of-a-kind and contains unique metadata that distinguishes it from other NFTs.
Nonce: A random or pseudo-random number that is used once in a cryptographic transaction to ensure that the transaction is not repeated (e.g. as part of a cyber-attack).
Oracles: A system that provides external data to smart contracts on a blockchain network.
Private key: A string of 64 alphanumeric characters that allows secure access to a digital wallet. The keyholder is the owner of the assets to which it grants access.
Proof of Stake (PoS): A consensus mechanism used to validate cryptocurrency transactions. As opposed to Proof of Work (PoW), compensation for validators is based on the number of native tokens held and is less energy-intensive.
Proof of Work (PoW): A consensus mechanism that requires participants to perform an intensive computational task (solving a mathematical puzzle) to validate transactions and add new blocks to the chain.
Scalability: The capability of a blockchain to handle a growing number of transactions and host an increasing number of nodes.
Slippage: The difference between the price of a token when a trade is submitted and the eventual execution price.
Stablecoin: A token that is backed by a non-volatile reserve asset (such as the US dollar), allowing it to maintain a steady value even when the market fluctuates.
Staking (traditional): A process whereby a token holder commits to ‘lock’ their tokens for a given period in return for a share of the network's rewards (similar to an interest-bearing deposit).
Staking (LP): A Liquidity Provider (LP) supplies a platform with a pair of currencies in return for a share of the platform’s proceeds (e.g. transaction fees, loan interest).
Token: A unit of value that represents a digital asset or utility on a blockchain network.
Tokenization: The process of creating a cryptographic token that is linked to the value of an existing asset (e.g. real estate), thus increasing its liquidity.
Total Value Locked (TVL): A term specific to the crypto universe that denotes the total value of assets deposited on a given platform.
Transactions per Second (TPS): A measurement of the speed of a blockchain network. It is calculated by dividing the number of transactions per block by the block time (time taken to create a new block).
For additional terms, lingo, and crypto-jargon, please visit:
https://coinmarketcap.com/alexandria/glossary
Last modified 14d ago