Glossary index

Glossary

Clear, plain English definitions for protocol, DeFi, security, and infra terms you will see in Web3 jobs.

A

Account: A wallet or contract that owns assets and sends transactions.
General
Account Abstraction: Smart contract wallets with flexible rules and better UX.
Protocol
Address: Public identifier used to receive funds or interact.
General
Address Poisoning: Scam where attackers mimic your address to trick you.
Security
Admin Key: Privileged key with special control over a contract or system.
Security
Aggregator: Tool that routes orders or data across sources.
Product
Airdrop: Free token distribution to users or addresses.
Product
Altcoin: Any cryptocurrency other than Bitcoin.
General
AML (Anti Money Laundering): Controls and monitoring that prevent illicit fund flows.
Security
AMM (Automated Market Maker): On chain pools that set prices from token balances.
DeFi
Anon: Anonymous or pseudonymous participant in online communities.
General
API: Interface that lets programs call a service.
Infrastructure
API Key: Secret credential used to authenticate API requests.
Security
APR (Annual Percentage Rate): Yearly rate that does not include compounding.
DeFi
APY (Annual Percentage Yield): Yearly return that includes compounding.
DeFi
Arbitrage: Profit from price gaps across markets or pools.
DeFi
Asset: Resource with value that can be owned or transferred.
General
ATH (All-Time High): Highest price an asset has ever reached.
Market
ATL (All-Time Low): Lowest price an asset has ever reached.
Market

B

Backup: Redundant copy of critical data for recovery.
Security
Backup Phrase: Another term for recovery or seed phrase.
Security
Bagholder: Investor holding depreciated assets after a downturn.
Market
Base Fee: Protocol set minimum gas price per unit under EIP 1559.
Protocol
Base Layer (Layer 1): Main chain that provides security, data availability, and settlement.
Protocol
Bear Market: Prolonged period of declining asset prices and sentiment.
Market
Bearish: Expectation that prices will decline; negative market view.
Market
Beta: Pre-release phase for testing with real users.
Product
Block: Batch of transactions appended to the blockchain.
Protocol
Block Explorer: Web tool to inspect blocks, transactions, and addresses.
Infrastructure
Block Height: Number of blocks since genesis; position in the chain.
Protocol
Block Reward: Newly created coins and fees paid to the block producer.
Protocol
Blockchain: Append-only ledger of blocks secured by cryptography.
Protocol
Bonding Curve: Formulaic pricing mechanism based on token supply.
DeFi
Borrow: Obtain assets by posting collateral or using credit.
DeFi
Bridge: System to transfer assets or messages across chains.
Infrastructure
Bull Market: Sustained period of rising prices and optimistic sentiment.
Market
Bullish: Expectation that prices will rise; positive market view.
Market
Burn: Permanently remove tokens from circulation.
Protocol
Burn Address: Irrecoverable address used to destroy or renounce tokens.
Protocol
Burner Wallet: Temporary wallet for low-stakes use; limits risk exposure.
Security

C

CeFi (Centralized Finance): Centralized financial services built around crypto assets.
CeFi
CEX (Centralized Exchange): Custodial trading venue managed by a centralized operator.
CeFi
Chain: A blockchain network with its own consensus and state.
Protocol
Chain ID: Numeric identifier that distinguishes EVM networks.
Protocol
Chainlink: Oracle network that delivers off-chain data on-chain.
Infrastructure
Cliff: Initial period before vesting starts.
General
Cold Storage: Offline storage of keys to minimize attack surface.
Security
Cold Wallet: Wallet kept offline to minimize exposure to attacks.
Security
Collateral: Assets pledged to secure a loan or leveraged position.
DeFi
Composability: Ability to combine protocols like modular building blocks.
Design
Confirmation: Additional blocks that increase confidence a tx is final.
Protocol
Consensus: Process by which nodes agree on the chain’s state.
Protocol
Contract Address: Address where a smart contract is deployed and reachable.
Protocol
Copy Trading: Automatically mirroring trades executed by another account.
DeFi
Cosmos SDK: Framework for building appchains.
Protocol
Cross-Chain: Interacting or transferring across multiple blockchain networks.
Infrastructure
Custodial Wallet: Wallet where a third party holds and manages your keys.
CeFi
Custody: Safekeeping and control of assets on behalf of users.
CeFi

D

DAO (Decentralized Autonomous Organization): On-chain organization governed by tokenholders or members.
Governance
DApp (Decentralized Application): Application that uses smart contracts and wallets.
Product
DCA (Dollar-Cost Averaging): Investing fixed amounts at regular intervals regardless of price.
Market
Decentralization: Distribution of control and operation among many parties.
Protocol
DeFi (Decentralized Finance): Open financial protocols built on blockchains.
DeFi
Deposit: Move funds into a protocol, account, or position.
DeFi
Derivative: Instrument whose value derives from an underlying asset.
DeFi
DEX (Decentralized Exchange): Exchange using smart contracts and pools or order books.
DeFi
DEX Aggregator: Router that splits orders across multiple DEXes for best price.
DeFi
Diamond Hands: Holding through volatility with strong conviction.
Market
Digital Asset: On-chain representation of value, rights, or access.
General
Digital Signature: Cryptographic proof that a message was authorized by a key holder.
Security
Dust: Tiny token amount, often uneconomical to move.
General
Dusting Attack: Sending tiny amounts to deanonymize or trick users.
Security
DYOR (Do Your Own Research): Verify claims independently before investing or using a product.
General

E

ENS (Ethereum Name Service): Human-readable names mapped to addresses and records.
Infrastructure
EOA (Externally Owned Account): Account controlled by a private key; initiates transactions.
Protocol
Escrow: Funds held by a trusted party until conditions are met.
General
ETH: Native asset of the Ethereum network used to pay fees.
Protocol
Ethereum: Programmable blockchain for smart contracts and applications.
Protocol
EVM (Ethereum Virtual Machine): Runtime that executes smart contracts on EVM chains.
Protocol
Exchange: Venue where assets are traded between participants.
Market
Exit Liquidity: Later buyers enabling insiders to sell at higher prices.
Market
Exit Scam: Project operators disappear with user funds or promises unfulfilled.
Security

F

Faucet: Service that dispenses test tokens for development.
Infrastructure
Fee: Amount charged by a network or service for an action.
General
Fiat: Government-issued currency like USD or EUR.
General
Finality: Point at which a block is effectively irreversible.
Protocol
Flash Loan: Uncollateralized loan repaid within a single transaction.
DeFi
Fork: Protocol split creating new rules or chain history.
Protocol
Foundry: Modern Ethereum development toolkit.
Infrastructure
Free Mint: NFT mint with zero mint price; users pay only network fees.
NFT
Front-Run: Acting on knowledge of pending orders to gain advantage.
DeFi
FUD (Fear, Uncertainty, Doubt): Negative sentiment or rumor that undermines confidence.
Market
Full Node: Node that fully verifies and stores blockchain state.
Infrastructure

G

Gas: Unit measuring computational work in EVM transactions.
Protocol
Gas Fee: Price paid for gas consumed by a transaction.
Protocol
Gas Limit: Maximum gas a transaction is allowed to consume.
Protocol
Gas Price: Price per unit of gas a user is willing to pay.
Protocol
Genesis Block: First block of a blockchain; root of the chain’s history.
Protocol
Governance: Processes for proposing, deciding, and executing changes.
Governance
Governance Token: Token granting voting or proposal rights in governance.
Governance
Grant: Funding provided to support work without repayment.
Product
Gwei: Denomination of ETH equal to 1,000,000,000 wei.
Protocol

H

Halving: Scheduled reduction of block rewards to control issuance.
Protocol
Hard Cap: Maximum amount that can be raised or minted.
Market
Hardware Wallet: Device that stores keys offline and signs securely.
Security
Hash: Fixed-size digest produced by a cryptographic hash function.
Security
Hash Rate: Aggregate computational power securing a PoW network.
Protocol
Health Factor: Metric indicating how close a position is to liquidation.
DeFi
HODL: Long-term holding regardless of short-term volatility.
Market
Hot Wallet: Internet-connected wallet for convenience with higher risk.
Security

I

ICO (Initial Coin Offering): Fundraising by selling newly issued tokens to investors.
DeFi
Impermanent Loss: Value loss from price divergence while providing liquidity.
DeFi
Inflation: Increase in token supply or general price level over time.
Market
Interoperability: Ability for systems to work together across chains and apps.
Infrastructure
IPFS: Peer-to-peer, content-addressed storage and distribution network.
Infrastructure

J

JSON‑RPC: Standard RPC interface for Ethereum nodes.
Infrastructure

K

Key Management: Practices and tools to secure, rotate, and recover keys.
Security
Keystore File: Encrypted JSON file containing a private key.
Security
KYC (Know Your Customer): Identity verification required by compliance and risk policies.
Compliance

L

L1 (Layer 1): Base chain handling consensus, data, and settlement.
Protocol
L2 (Layer 2): Scaling layer that inherits security from a base L1.
Protocol
Layer 2 (L2): Scaling networks built atop Layer 1.
Protocol
Leverage: Use of borrowed funds to amplify exposure and returns.
DeFi
Limit Order: Order to trade at a specified price or better.
DeFi
Liquid Staking: Staking with receipt tokens usable in DeFi.
DeFi
Liquidity: Ease of trading without causing significant price moves.
DeFi
Liquidity Pool: Smart contract reserves enabling automated swaps and fees.
DeFi
Liquidity Provider (LP): Participant supplying assets to a pool in exchange for fees.
DeFi
Lockup: Period during which tokens cannot be transferred.
DeFi
LP Token: Token representing a share of a liquidity pool.
DeFi

M

Mainnet: Primary network where transactions have real economic value.
Protocol
Margin: Borrowed funds used to increase position size and leverage.
DeFi
Market Cap: Token price multiplied by circulating supply.
Market
Market Order: Order to execute immediately at the best available price.
DeFi
Max Supply: Maximum number of tokens that can be issued.
Market
Maximal Extractable Value (MEV): Value captured from transaction ordering, inclusion, and censorship.
DeFi
Mempool: Pool of pending transactions awaiting inclusion in a block.
Infrastructure
MEV: Miner/Maximal Extractable Value from ordering.
DeFi
Miner: Participant producing blocks and securing PoW networks.
Protocol
Mining: Producing blocks via proof of work to secure a network.
Protocol
Mint: Create new tokens or NFTs and record them on-chain.
Protocol
Mnemonic: Human-readable word list that backs up a wallet’s seed.
Security
Mobile Wallet: Wallet application running on a smartphone.
Product
MPC (Multi‑Party Computation): Cryptography for shared key operations.
Security
Multichain: Architecture spanning multiple blockchains or rollups.
Infrastructure
Multisig: Wallet requiring multiple signatures to authorize actions.
Security

N

Native Token: Primary asset used for fees and incentives on a chain.
Protocol
Network: Group of nodes connected to exchange data and maintain a chain.
Protocol
Network Fee: Fee charged by the network to process transactions.
Protocol
NFA (Not Financial Advice): Disclaimer that information is not investment advice.
General
NFT (Non-Fungible Token): Unique token representing an individual asset or claim.
NFT
Node: Participant running software to validate, store, and relay data.
Infrastructure
Non-Custodial: Service that never controls user funds or private keys.
Security
Nonce: Per-account counter ensuring each transaction is unique and ordered.
Security

O

Off-Chain: Operations occurring outside the blockchain state.
Infrastructure
On-Chain: Data and execution recorded directly on the blockchain.
Protocol
Open Source: Code available for use, study, modification, and distribution.
Design
Optimistic Rollup: Assumes correctness unless disputed.
Protocol
Oracle: Service that brings external data and events on-chain.
Infrastructure
Order: Instruction to buy or sell under specified conditions.
DeFi
Order Book: List of buy and sell orders organized by price levels.
DeFi
OTC (Over-The-Counter): Direct trade between counterparties outside of exchanges.
Market

P

P2P (Peer-to-Peer): Direct communication or exchange between participants without intermediaries.
Protocol
Paper Hands: Selling early due to fear or volatility.
Market
Paper Wallet: Physical print or written record of keys or seed phrase.
Security
Peg: Targeted exchange rate linking an asset to another value.
DeFi
Permissionless: Open access—no approval needed to use or build.
Protocol
Perpetuals: Derivatives without expiry; funding aligns price to spot.
DeFi
Phishing: Deceptive attempt to trick users into revealing secrets.
Security
Pool: Shared funds used for trading, lending, or staking.
DeFi
Portfolio: Collection of assets held by a user or entity.
Product
Pre-Mine: Token allocation minted before public launch.
Protocol
Pre-Sale: Token sale to select buyers before a public offering.
Market
Price Impact: Execution slippage from trade size versus available liquidity.
DeFi
Private Key: Secret key that enables signing and control of funds.
Security
Proof of Reserves: Attestation that a custodian holds assets it claims.
Security
Proof of Stake (PoS): Consensus where validators secure the chain with staked tokens.
Protocol
Proof of Work (PoW): Consensus secured by computational work to produce blocks.
Protocol
Protocol: Set of rules defining network or application behavior.
Protocol
Public Key: Key used to verify signatures and derive addresses.
Security
Pump and Dump: Coordinated price spike followed by insiders selling.
Market

Q

Quorum: Minimum participation required to validate a decision.
Governance

R

Recovery Phrase: Human-readable backup of wallet keys (seed phrase).
Security
Reserve: Assets set aside to back liabilities or stabilize systems.
DeFi
Roadmap: Planned milestones and timelines for a project.
Product
Rollup: Layer 2 that executes off-chain and posts data to L1.
Protocol
Rug Pull: Developers withdraw liquidity or abandon a project with funds.
Security
Rust: Systems language used in many L1/L2 protocols.
Protocol

S

Satoshi: Smallest unit of Bitcoin, equal to 0.00000001 BTC.
General
Satoshi Nakamoto: Pseudonymous creator of Bitcoin and author of its whitepaper.
General
Scam: Fraudulent scheme designed to steal funds or data.
Security
Seed Phrase: Mnemonic words encoding a wallet’s master private key.
Security
Self-Custody: You control private keys and assets, not a custodian.
Security
Sequencer: Orders transactions in rollups.
Infrastructure
Service Fee: Charge collected for providing a service or transaction.
Market
Sharding: Partitioning state or processing to scale throughput.
Protocol
Sidechain: Independent chain bridged to a main chain for transfers.
Protocol
Signature: Mathematical proof binding a signer to a specific message.
Security
Signer: Entity that authorizes transactions using a private key.
Security
Slashing: Penalty reducing stake for validator misbehavior or downtime.
Protocol
Slippage: Difference between expected and executed trade price.
DeFi
Slippage Tolerance: Maximum price deviation a user accepts before canceling a trade.
DeFi
Smart Contract: Programmable code that runs on a blockchain.
Protocol
Snapshot: Off-chain voting system using token balances at a block.
Governance
SNARK: Succinct Non‑interactive ARgument of Knowledge.
Security
Solidity: Contract programming language for EVM chains.
Security
Spam Token: Worthless or malicious token sent to clutter wallets.
Security
Stablecoin: Token designed to maintain a stable value via a peg.
DeFi
Staking: Locking tokens to help secure a network and earn rewards.
Protocol
STARK: Scalable Transparent ARgument of Knowledge.
Security
Supply: Number of tokens outstanding—circulating, total, or fully diluted.
Market
Supply Cap: Maximum number of tokens that can ever exist.
Market
Sweep: Rapidly buy multiple NFTs in a collection or consolidate funds.
NFT
Synthetic Asset: Token that tracks the value of another asset or index.
DeFi

T

Taker: Trader who removes liquidity by matching existing orders.
DeFi
Testnet: Public network for testing without real economic value.
Infrastructure
TGE (Token Generation Event): Initial creation/distribution of tokens.
General
Ticker: Short symbol representing a token or asset (e.g., ETH).
Market
Token: Digital unit representing value, rights, or access on-chain.
Protocol
Token Burn: Permanent removal of tokens from circulation.
Protocol
Token Grant: Allocated tokens subject to vesting or lockups.
Product
Token Supply: Total number of tokens outstanding or possible.
Market
Token Upgrade: Process to migrate a token to improved logic or standard.
Protocol
Tokenomics: Economic design of a token.
General
TPS: Transactions per second a network can process.
Infrastructure
Trading: Buying and selling assets to manage risk or profit.
Market
Transaction: Signed message that changes blockchain state.
Protocol
Transaction Fee: Fee paid to include a transaction in a block.
Protocol
Transfer: Movement of assets between accounts or chains.
Protocol
Treasury: On‑chain or off‑chain reserves managed by a project or DAO.
Governance
TVL (Total Value Locked): Value locked in a protocol.
DeFi
Two-Factor Authentication: Second verification step beyond password or key.
Security

U

UI: User Interface — visual layer users interact with.
Design
Under-Collateralized: Loan backed by collateral worth less than liability.
DeFi
Unlock Schedule: Timeline for locked tokens to become transferable.
Product
Upgradability: Patterns for safely changing contracts.
Security
Upgradable Contract: Smart contract whose logic can be upgraded via a proxy.
Protocol
Utility Token: Token granting product access or in‑app utility.
Product
UX: User Experience — overall ease, clarity, and satisfaction.
Design

V

Validator: Node that proposes/validates blocks.
Protocol
Vault: Product or contract that automates asset management.
DeFi
Vesting: Time‑based release of tokens or equity.
General
Volatility: Magnitude of price fluctuation over time.
Market
Volume: Amount traded of an asset over a period.
Market
Voting Power: Weight of a participant’s influence in governance.
Governance

W

Wallet: Key management and transaction signing.
Product
WalletConnect: Protocol to connect wallets to apps via QR or deep link.
Infrastructure
Watch-Only Wallet: Wallet that tracks balances without private keys.
Security
Web3: Applications built on decentralized networks and cryptographic primitives.
General
WETH: Wrapped ETH — ERC‑20 representation of ETH.
Protocol
Whale: Entity holding or moving very large amounts of assets.
Market
Whitelist: List of addresses allowed to participate in an action.
Product
Whitepaper: Technical document describing a project’s design and rationale.
Product
Withdrawal: Removal of funds from a protocol, wallet, or exchange.
DeFi
Wrapped Token: Tokenized representation of another asset on the same or other chain.
Infrastructure
Write Function: Contract method that changes state and costs gas.
Protocol

X

XPUB (Extended Public Key): HD wallet root public key.
Security

Y

Yield: Return generated by an asset or strategy.
DeFi
Yield Farming: Earning tokens by providing liquidity.
DeFi
YOLO: Risky “you only live once” trade or decision.
Market

Z

Zero Address: The all‑zero address used as a burn or null target.
Protocol
Zero-Knowledge: Cryptography proving statements without revealing underlying data.
Security
ZK (Zero‑Knowledge): Cryptography that proves facts without revealing data.
Security
ZK Proof: Cryptographic proof verifying correctness with zero knowledge.
Security
ZK Rollup: Uses zero‑knowledge proofs for validity.
Protocol