Crypto Glossary
Want to understand the crypto asset market more easily? Here you can find common terms in trading, on-chain technology, and the digital economy, explained in concise language to help you gradually build a clear knowledge system.
What is DeFi?
DeFi is short for 'Decentralized Finance' and refers to financial services provided through on-chain protocols. Users can participate on their own in exchanges, lending, staking, or liquidity management without fully relying on traditional financial intermediaries.
What is NFT?
NFT is a type of digital asset with a unique identifier, which can be used in scenarios such as digital collectibles, game items, membership certificates, and digital rights.
What is a smart contract?
A smart contract is a program deployed on a blockchain network. When preset conditions are met, the program can automatically execute transactions, allocate assets, or update on-chain data.
What is a consensus mechanism?
Consensus mechanism is a set of operating rules that help network participants confirm transactions and maintain data consistency.
What is proof of work?
Proof of work is a consensus method that competes for block confirmation rights through computing resources.
What is proof of stake?
Proof of stake is a consensus method that selects validators based on asset staking and network rules.
What is staking?
Staking is the act of locking or delegating a certain amount of crypto assets to validators to support network operation.
What is a node?
A node is a device or program connected to a blockchain network that can store data, forward transactions, verify information, or participate in network consensus.
What is hash rate?
Hash rate represents the capability of a network or mining machine to perform hash calculations within a certain period of time.
What is a protocol?
A protocol is a set of technical rules commonly followed by network participants, specifying how transactions are processed, how data is recorded, and how different functions operate.
What is a token standard?
A token standard is a set of uniform technical specifications that define how tokens are created, transferred, and interacted with.
What is ERC-20?
ERC-20 is a technical standard used for creating fungible tokens.
What is ERC-721?
ERC-721 is a non-fungible token standard that gives each token a unique identifier.
What is ERC-1155?
ERC-1155 supports multiple token types and can manage both fungible and non-fungible assets within the same contract.
What is an oracle?
An oracle is a service that connects a blockchain with external data, providing information such as prices, weather, or real-world events to smart contracts.
What is Layer 2?
Layer 2 is a scalability solution built on top of a base blockchain, used to improve network processing capacity and reduce usage costs.
What is zero-knowledge proof?
Zero-knowledge proof allows one party to prove that a statement or data condition is true without disclosing the specific information.
What is a Rollup?
A Rollup can aggregate multiple transactions for processing and then submit the compressed results to the base network.
What is a sidechain?
A sidechain is a network connected to a main blockchain but operates under independent rules, with assets or data able to transfer between the main chain and the sidechain through specific mechanisms.
What is cross-chain interoperability?
Cross-chain interoperability refers to the capability of different blockchains to exchange assets, data, and instructions.
What is a hard fork?
A hard fork is an upgrade to a blockchain protocol that is not backward compatible.
What is a soft fork?
A soft fork is a protocol upgrade that can generally remain partially compatible with old rules.
What is a genesis block?
The genesis block is the earliest block generated on a blockchain and serves as the starting point for all subsequent block records.
What is token burning?
Token burning is the process of sending some tokens to an address that can no longer be used, permanently removing them from circulation.
What is token unlocking?
Token unlocking refers to lifting transfer restrictions on certain tokens according to agreed times or conditions.
What is a vesting period?
A vesting period is a token phased release mechanism where participants can gradually obtain the corresponding tokens after a specific period.
What are real-world assets?
Real-world assets, usually abbreviated as RWA, refer to real assets or related rights mapped on the blockchain through tokenization.
What is a decentralized exchange?
Decentralized exchanges usually complete asset swaps through smart contracts, allowing users to participate in trades and manage on-chain assets themselves.
What is an automated market maker?
Automated market makers determine asset swap prices through liquidity pools and calculation rules.
What is a liquidity pool?
A liquidity pool is a collection of crypto assets stored in a smart contract that can provide funds for on-chain exchanges, lending, and other applications.
What is a liquidity provider?
A liquidity provider is a participant who deposits assets into the fund pool and may earn a portion of transaction fees or protocol rewards.
What is impermanent loss?
Impermanent loss is the value difference that liquidity providers may experience compared to holding assets individually after the price ratio of the assets in the pool changes.
What is a DEX aggregator?
A DEX aggregator compares the prices and liquidity of multiple decentralized trading markets and tries to find a more suitable exchange path.
What is a Gas fee?
A Gas fee is the network fee paid by users when executing on-chain transactions or calling smart contracts.
What is slippage?
Slippage is the difference between the expected transaction price and the actual transaction price.
What is a market order?
A market order is an order that is executed quickly at the currently available market price.
What is a limit order?
A limit order allows traders to pre-set the price at which they want to buy or sell.
What is an order book?
An order book records buy and sell orders in the market that have not yet been executed.
What is market depth?
Market depth reflects the number of orders available for execution at different price ranges.
What is volatility?
Volatility is used to describe the degree of change in an asset's price over a certain period.
What is the all-time high?
The all-time high, usually abbreviated as ATH, refers to the highest trading price of an asset in recorded market history.
What is the all-time low?
The all-time low, usually abbreviated as ATL, refers to the lowest trading price of an asset in recorded market history.
What is market capitalization?
The market capitalization of a crypto asset is usually calculated by multiplying the current market price by the circulating supply.
What is fully diluted valuation?
Fully diluted valuation is calculated based on the current price and the maximum supply of the token.
What is Proof of Reserves?
Proof of Reserves is a method to show the assets held by a platform and enhance the transparency of asset information.
What is a Sybil Attack?
A Sybil Attack is when a single entity creates a large number of fake identities or nodes to interfere with network voting, reward distribution, or governance processes.
What is a 51% Attack?
A 51% Attack occurs when an entity controls most of the network's computing power or validation weight, which may interfere with transaction confirmation and block ordering.
What is Social Finance?
Social Finance, usually abbreviated as SocialFi, is an application model that combines social interaction, content creation, community governance, and on-chain incentives.
What is Game Finance?
Game Finance, usually abbreviated as GameFi, is an application field that combines gaming mechanics with on-chain assets, digital ownership, and financial functions.
What is Decentralized Science?
Decentralized Science, usually abbreviated as DeSci, attempts to use blockchain to improve scientific collaboration, funding allocation, data sharing, and attribution of results.
What is a block explorer?
A block explorer is a tool used to query publicly available on-chain data.
What is an on-chain domain?
On-chain domains can convert complex addresses into more easily recognizable names.
What is decentralized storage?
Decentralized storage saves and transmits data through distributed nodes, reducing dependence on a single server.
The field of crypto assets is still continuously evolving, and some terms may have different meanings across different networks and protocols. Before using related products or services, one should further understand their operational rules, fee structures, and potential risks.
