Glossary of Terms and Abbreviations
Aave: A decentralized finance protocol on Ethereum enabling lending and borrowing of cryptocurrencies using smart contracts.
Abbreviation: None.
Airdrop: Free distribution of tokens to wallet holders or users meeting specific criteria (e.g., holding a certain cryptocurrency or engaging with a platform) to incentivize adoption or reward community participation.
Abbreviation: None.
Block: A batch of transactions recorded on a blockchain, cryptographically linked to previous blocks to form a chronological chain.
Abbreviation: None.
Blockchain: A decentralized, distributed digital ledger that records transactions across a network of computers, ensuring transparency and immutability.
Abbreviation: None.
Burn-and-Mint: A process for transferring tokens across blockchains by “burning” (destroying) tokens on one chain and “minting” (creating) an equivalent amount on another to maintain total supply.
Abbreviation: None.
Byzantine Fault Tolerance (BFT): A consensus mechanism that allows a network to reach agreement on transactions despite some nodes being faulty or malicious (up to one-third). Variants include Practical BFT (PBFT) and Federated BFT (FBFT).
Abbreviation: BFT, PBFT, FBFT.
Centralized Exchange (CEX): A platform for trading cryptocurrencies managed by a central entity (e.g., Binance, Coinbase), requiring users to deposit funds.
Abbreviation: CEX.
Circulating Supply: The number of coins or tokens available for public trading or use, excluding locked, reserved, or unvested amounts.
Abbreviation: None.
Consensus Mechanism: A protocol used by a blockchain to agree on the validity of transactions and the state of the ledger (e.g., PoW, PoS, PoA).
Abbreviation: None.
Cryptocurrency: A digital or virtual currency secured by cryptography, typically operating on a blockchain (e.g., Bitcoin, Ether).
Abbreviation: Crypto.
Decentralized Application (dApp): An application running on a blockchain, powered by smart contracts, operating without centralized control.
Abbreviation: dApp.
Decentralized Exchange (DEX): A platform for trading cryptocurrencies using smart contracts, allowing peer-to-peer transactions without intermediaries (e.g., Uniswap).
Abbreviation: DEX.
Decentralized Finance (DeFi): Financial services (e.g., lending, borrowing, trading) built on blockchain protocols, eliminating traditional intermediaries.
Abbreviation: DeFi.
Delegated Proof-of-Stake (DPoS): A consensus mechanism where token holders vote for a small number of delegates to validate transactions and produce blocks.
Abbreviation: DPoS.
EIP-1559: An Ethereum upgrade (implemented 2021) introducing a base fee for transactions (burned) and optional priority fees, improving fee predictability and potentially making Ether deflationary.
Abbreviation: None.
ERC-20: Ethereum Request for Comment 20, a standard for fungible tokens on Ethereum, defining functions like transfer, balanceOf, and approve for interoperability.
Abbreviation: ERC-20.
Ether (ETH): The native cryptocurrency of the Ethereum blockchain, used to pay for transaction fees (gas) and staking in Proof-of-Stake.
Abbreviation: ETH.
Ethereum: A decentralized blockchain platform supporting smart contracts and dApps, with Ether as its native currency.
Abbreviation: ETH (for the currency).
Fungible Token: A token where each unit is identical and interchangeable (e.g., ERC-20 tokens like USDT), unlike non-fungible tokens (NFTs).
Abbreviation: None.
Gas Fees: Fees paid in ETH to execute transactions or smart contracts on Ethereum, compensating validators for computational resources.
Abbreviation: Gas.
Governance Token: A token that grants holders voting rights to influence a protocol’s development, such as upgrades or fund allocation.
Abbreviation: None.
Initial Coin Offering (ICO): A fundraising method where new tokens are sold to investors, often to fund blockchain project development.
Abbreviation: ICO.
Initial DEX Offering (IDO): A token sale conducted on a decentralized exchange, typically involving liquidity pools to raise funds.
Abbreviation: IDO.
Layer-1 (L1): The base blockchain protocol (e.g., Ethereum, Bitcoin) responsible for core consensus and transaction validation.
Abbreviation: L1.
Layer-2 (L2): Scaling solutions built on top of a Layer-1 blockchain (e.g., Optimism, Arbitrum) to process transactions off-chain while leveraging L1 security, reducing fees and congestion.
Abbreviation: L2.
Liquidity Mining: A DeFi mechanism where users earn token rewards by providing liquidity to protocols (e.g., liquidity pools on Uniswap).
Abbreviation: None.
Market Capitalization: The total market value of a cryptocurrency, calculated as price per unit × circulating supply.
Abbreviation: Market Cap.
Minting: The process of creating new tokens via a smart contract, often at launch or as rewards.
Abbreviation: None.
Node: A computer participating in a blockchain network, maintaining the ledger and validating transactions.
Abbreviation: None.
Non-Fungible Token (NFT): A unique, non-interchangeable token (e.g., ERC-721) representing digital assets like art or collectibles.
Abbreviation: NFT.
Oracles: Services or protocols that provide external data (e.g., price feeds) to smart contracts, enabling DeFi applications to interact with real-world information.
Abbreviation: None.
Proof-of-Authority (PoA): A consensus mechanism where pre-approved nodes validate transactions based on identity or reputation, often used in private blockchains.
Abbreviation: PoA.
Proof-of-Burn (PoB): A consensus mechanism where users destroy (burn) coins to gain the right to validate blocks or receive new tokens.
Abbreviation: PoB.
Proof-of-Capacity / Proof-of-Space (PoSpace): A consensus mechanism where validators use disk space to store cryptographic data, earning block rewards.
Abbreviation: PoSpace, PoC.
Proof-of-Elapsed-Time (PoET): A consensus mechanism using randomized wait times for block creation, typically in permissioned blockchains.
Abbreviation: PoET.
Proof-of-History (PoH): A Solana mechanism that creates cryptographic timestamps to optimize transaction ordering, often paired with PoS.
Abbreviation: PoH.
Proof-of-Stake (PoS): A consensus mechanism where validators stake cryptocurrency (e.g., ETH) to validate transactions and earn rewards, used by Ethereum since 2022.
Abbreviation: PoS.
Proof-of-Work (PoW): A consensus mechanism where miners solve computational puzzles to validate transactions and earn block rewards, used by Ethereum until 2022.
Abbreviation: PoW.
Slashing: A penalty in PoS systems where validators lose a portion of staked coins for malicious or faulty behavior (e.g., double-signing).
Abbreviation: None.
Smart Contract: Self-executing code on a blockchain that automates agreements or processes without intermediaries.
Abbreviation: None.
Solidity: The primary programming language for writing Ethereum smart contracts, used for ERC-20 tokens and dApps.
Abbreviation: None.
SPL Token: Solana Program Library token standard, equivalent to ERC-20 for fungible tokens on the Solana blockchain.
Abbreviation: SPL.
Stablecoin: A cryptocurrency pegged to a stable asset (e.g., USD, gold) to minimize price volatility (e.g., USDT, USDC).
Abbreviation: None.
Staking: Locking up cryptocurrency to participate in a PoS consensus mechanism, earning rewards for validating transactions.
Abbreviation: None.
Tokenomics: The economic design of a token, including supply, distribution, incentives, and utility within a project.
Abbreviation: None.
Total Supply: The total number of tokens created for a project, including circulating and locked tokens.
Abbreviation: None.
Validator: A node in a PoS or similar blockchain that verifies transactions and proposes blocks, often requiring staked cryptocurrency.
Abbreviation: None.
Vesting: A schedule for gradually releasing locked tokens to stakeholders (e.g., team, investors) to prevent market flooding.
Abbreviation: None.
Wallet: Software or hardware used to store private and public keys for managing cryptocurrencies (e.g., MetaMask, Ledger).
Abbreviation: None.
Whitepaper: A document outlining a blockchain project’s technology, goals, tokenomics, and roadmap.
Abbreviation: None.
Yield Farming: Earning token rewards by participating in DeFi protocols, such as providing liquidity or lending assets.
Abbreviation: None
Important: Information Only
The content above is for general information and education only. It is not financial, legal, tax, or investment advice. Do not rely on it for any decisions, including buying, selling, or trading cryptocurrencies. The information can become outdated or incorrect due to rapid changes. There is no guarantee on the accuracy, completeness, or timeliness of the content. You must verify information yourself. Cryptocurrencies and DeFi are highly volatile and risky. You could lose all your money. Blockchain platforms and smart contracts can have bugs, hacks, or failures. Always consult a qualified financial or legal advisor before participating in crypto activities. You are responsible for understanding and following laws in your country. Mention of specific projects, tokens, or platforms is not an endorsement or recommendation. Do Your Own Research (DYOR): Always research thoroughly and seek professional advice before engaging in crypto activities. Using this content is at your own risk.
