Crypto glossary – important terms to navigate web3
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The glossary provides you with definitions for the most important terms to navigate the web3 landscape.
Navigating conversations and understanding key concepts in web3 sometimes requires its own terminology. In this regard, web3 is not just a technological shift, but also a cultural one.
This guide will provide you with the most essential terms to decode the language and become a web3 citizen. It is tailored to provide you with clear and concise definitions for the unique terms that define this industry.
Dive in, discover, and enhance your fluency in the unique lexicon of the web3 industry. (-:
If you want to contribute to the glossary, have a look on Github.
Glossary a-z
Airdrop
Distribution of free tokens, usually to promote a product or incentivise early usersAltcoin
Alternative coin, any cryptocurrency other than BitcoinAMM
Automated Market Maker, popular mechanism among decentralized exchanges (DEXes) involving liquidity pools instead of an orderbook-based systemAnon
Anonymous, entity that wishes to remain anonymous or pseudonymousBeacon Chain
Ethereum’s proof-of-stake (PoS) consensus layerBridge
Service that transfers tokens between multiple blockchains (cross-chain)BUIDL
Term to describe the web3 building ethos, even despite a bear market, inspired by HODLCeFi
Centralized finance, the “traditional” finance sector, in contrast to DeFi (decentralized finance)CEX
Centralized Exchange, app for swapping tokens run by a company, often used for fiat exchange; in contrast to DEX (Decentralized Exchange)Cypherpunks
Cypher + punks, movement originating in the early 90s, emphasizing the need for privacy in the digital age, enforced by cryptographyDAO
Decentralized Autonomous Organization, blockchain-based organizations that are owned and governed by their members via tokensDApp
Decentralized Application, blockchain-based services that use smart contracts in their backend and thus have a distributed nature, without the need for intermediariesDeFi
Decentralized Finance, general term for decentralized services in the financial sector, that are permissionless and globally available, e.g., DEXes (decentralized exchanges) or lending protocolsDegen
Degenerate, term for a person that is deeply involved in crypto or a specific sector, e.g., DeFi DegensDEX
Decentralized Exchange, blockchain-based app for swapping tokens that use smart contracts to be permissionlessDiamond Hands
Holding a digital asset through very volatile timesDYOR
Do Your Own Research, principle of self-verification instead of trusting othersEIP
Ethereum Improvement Proposal, a process to describe standards for the Ethereum platformERC
Ethereum Request for Comments, form of EIP to specify application layer standards; the most popular ones are ERC20 for fungible tokens and ERC721 for non-fungible tokensEVM
Ethereum Virtual Machine, the environment in which all Ethereum accounts and smart contracts live, the EVM defines the rules for computing a new valid state from block to blockExchange
An application that allows users to buy and sell crypto assetsExit Scam
Scenario in which a project or a part of a team steals the investors’ money and leavesExplorer
Webpage that displays information about the transaction history of a blockchainFaucet
Service that dispenses free tokens, usually for test networksFlippening
Term to describe a pivotal change in price or perception, e.g., when the market cap of a token exceeds the one of another tokenFOMO
Fear Of Missing Out, term to describe the feeling of not being included in something, e.g., a crypto investment or newsFork
Split of a blockchain or project due to technical issues or a disputeFUD
Fear, Uncertainty and Doubt, the opposite of FOMOGas
Term for the fee that Ethereum transactions cost; it is used to reward validators and prevents malicious use of the blockchainGenesis Block
The first block recorded in a blockchainGm
Good morning, form of greetings in crypto communities; due to the global nature of web3 it can be used at any time of the dayHash
Function that can be used to map data of arbitrary size to fixed-size values, e.g., for encryption, cryptographic hash functions are used in many parts of the web3 industryHODL
A frequent term referring to a strict buy-and-hold strategy, became famous after a misspelling in the bitcointalk forum in 2013ICO
Initial coin offering, the process of selling tokens when launching a new crypto project, inspired by the initial public offering (IPO) for stocks.JOMO
Joy Of Missing Out, converting FOMO into a positive feelingKYC
Know Your Customer, a process to verify the identity of customers; often used by centralized exchanges or entitiesLayer 1
Base blockchain architecture that serves as the foundation for other layers, also called mainnet, e.g., EthereumLayer 2
Built on top of layer 1, usually for scaling purposes, e.g., OptimismMinting
Process of creating new token(s)Mixer
Decentralized Application that “mixes” tokens to cover their transaction history, used for private transactionsNFT
Non-Fungible Token, a type of token that is not interchangeable or divisible, in contrast to fungible tokens; often used for digital collectiblesNode
An instance holding a copy of the blockchain, it is connected to other nodes, synchronizing the blockchain and thus forming the networkOG
Original Gangster, a person who was very early involved in crypto or a specific projectOracle
Data bridge to bring real-world information onto the blockchainP2P
Peer-to-peer, referring to a transaction between two people without other (central) parties involvedRollups
Popular type of layer 2, scaling solution that uses transaction bundling (“rolling up”) transactions before publishing them to the main chainRug Pull
Scenario in which a team abandons a project and/or removes its liquidity, similar to exit scamsSBTs
Soul-Bound-token, type of NFT that is non-transferrableSmart contract
Programs that run on the blockchain that follow the "if this then that" logic, they execute themselves when certain conditions are metSnapshot
Record of a blockchain at a particular block height, also the name of a popular DAO voting toolSolidity
Smart Contract Programming Language, created for the Ethereum blockchain but popular for other chains as wellStablecoin
A cryptocurrency that is pegged to another asset, mostly USDStaking
Process of locking tokens to contribute to validation in a proof of stake blockchainToken
Representation of a digital asset on a blockchainTVL
Total Value Locked, equivalent of USD locked in a blockchain or protocol, often used as an indicator in DeFi, e.g. in lending protocolsValidator
Virtual entity participating in the consensus of a proof of stake blockchain, they participate in producing blocks and validating transactionsWAGMI
Acronym for “We're All Gonna Make It”, expression used to show an optimistic attitude about the future of web3Whale
An entity holding a large amount of cryptocurrency, sometimes even a significant part of a projectWhitepaper
Document that is released with new crypto projects to explain the details of the project.ZKP
Zero-Knowledge-Proof, cryptographic mechanism to verify an information without revealing it, often used for scaling solutions of privacy applications