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Glossary
51 crypto terms, defined without the sales pitch. If a project uses a word here to sound impressive, now you can check whether it is.
A
Address poisoning
A scam in which attackers send tiny transactions from an address that looks like one you've used, hoping you'll copy…
Airdrop
A distribution of free tokens to wallets, usually to reward early users or bootstrap a community. Unsolicited tokens…
APR
Annual percentage rate: the yearly return without compounding. APY is always equal to or higher than APR for the same…
APY
Annual percentage yield: the yearly return including compounding. In crypto, a high APY paid in a protocol's own…
B
C
Circulating supply
The number of tokens that are unlocked and can be traded right now. It excludes tokens still locked in vesting…
Cliff
A period at the start of a vesting schedule during which no tokens unlock. When the cliff ends, a lump sum often…
Cold storage
Keeping private keys entirely offline, usually on a hardware wallet or paper backup. It is the standard way to protect…
Contract address
The on-chain address that identifies a specific token or smart contract. Tickers can be copied by anyone; the contract…
Crypto wallet
Software or hardware that stores the private keys controlling your blockchain addresses and lets you sign…
D
DAO
Decentralized autonomous organization: a group that coordinates decisions and a treasury through on-chain voting. In…
Decentralized exchange (DEX)
An exchange that runs on smart contracts, letting users trade directly from their wallets without a company holding…
E
F
G
GameFi
Games that integrate blockchain tokens and NFTs into their economies, letting players own, trade or earn assets. The…
Gas fees
The fee paid to process a transaction on a blockchain, usually paid in the network's native token. Gas prices rise…
Governance
The process by which a protocol's rules and treasury are changed, often through token-weighted votes on proposals.…
H
Hardware wallet
A physical device that stores private keys offline and signs transactions internally, so the keys never touch your…
Honeypot
A token contract designed so buyers can buy but cannot sell, or can only sell at a punishing tax. The chart looks…
Hot wallet
A wallet connected to the internet, such as a browser extension or mobile app. Convenient for daily use and small…
I
L
Layer 2
A network built on top of a base blockchain (layer 1) such as Ethereum, processing transactions more cheaply and…
Leverage
Trading with borrowed funds to increase position size. 10x leverage means a 10% move against you can wipe out your…
Liquidation
When a leveraged position or loan is forcibly closed because the collateral is no longer enough to cover it. Lending…
Liquidity
How easily an asset can be bought or sold without moving its price much. Deep liquidity means large trades barely move…
Liquidity pool
A smart contract holding two or more tokens that traders swap against on a decentralized exchange. Liquidity providers…
M
Market cap
Token price multiplied by circulating supply. It is a quick measure of what the tradeable portion of a token is valued…
Max supply
The hard cap on how many tokens can ever exist, if the token has one. Bitcoin's is 21 million. Many tokens have no max…
Multisig
A wallet that requires several signatures out of a group (for example, 3 of 5) to approve a transaction. Projects use…
N
O
P
Perpetual futures (perps)
Futures contracts with no expiry date, letting traders take leveraged long or short positions. A funding rate paid…
Phishing
Tricking someone into revealing secrets or signing a malicious transaction, usually through fake websites, DMs or ads…
Play-to-earn
A game model where players earn tokens or NFTs with market value. Many early play-to-earn economies depended on new…
Private key
The secret number that proves ownership of a blockchain address and signs its transactions. Lose it and you lose…
R
S
Seed phrase
A list of 12 or 24 words that can regenerate every private key in a wallet. Anyone who has it controls the funds. No…
Self-custody
Holding your own crypto keys instead of leaving funds with an exchange or custodian. Nobody can freeze your funds, and…
Slippage
The difference between the price you expect when you submit a trade and the price you actually get. It grows with…
Smart contract
Code deployed on a blockchain that executes automatically according to its rules. Smart contracts power tokens,…
Smart contract audit
A review of a project's code by a security firm looking for bugs and dangerous permissions. An audit lowers risk but…
Stablecoin
A token designed to hold a steady value, usually one US dollar. Stablecoins can be backed by cash and treasuries held…
Staking
Locking tokens to help secure a proof-of-stake network or to participate in a protocol, usually in exchange for…
T
Token approval
Permission you grant a smart contract to spend a specific token from your wallet. Unlimited approvals to a malicious…
Token burn
Permanently removing tokens from circulation by sending them to an address no one controls, or by destroying them…
Token unlock
The moment previously locked tokens become transferable. Unlocks increase the supply that can be sold, so traders…
Tokenomics
The economic design of a token: how many exist, who received them, how new tokens are issued, when locked tokens…
Total supply
The number of tokens that currently exist, including locked ones, minus any that have been burned. It sits between…
Total value locked (TVL)
The dollar value of assets deposited in a DeFi protocol's smart contracts. It is a measure of size, not revenue or…
V
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