Web3 Glossary

web3 glossary

Airdrop 

A marketing strategy in which cryptocurrency projects distribute their native tokens straight to their customers’ wallets in order to raise awareness and acceptance.

Alpha

Important or insider knowledge, notably about the value of digital assets such as cryptocurrencies and NFTs; a measure of an investment’s return over and above that of the market or other benchmark.

Altcoin

Formerly used to describe any cryptocurrency that wasn’t Bitcoin; however, altcoin is now used to describe any new cryptocurrency with a low market valuation.

Alts

An abbreviation for altcoins.

Ape

Someone who invests significantly in a cryptocurrency or stock, or the act of investing excessively in a cryptocurrency or stock. This might be a response to excitement and FOMO, or it can be done without a thorough understanding of the asset. It’s worth noting, though, that this is often a self-assigned phrase with no negative meaning. Is this a Planet of the Apes allusion? Perhaps an allusion to monkeys’ incredible physical strength? The beginnings are a little hazy, but one thing is certain: apes work well together.

ATH 

Stands for All-Time High (noun) is the highest price ever paid for an asset.

ATL 

Stands for “All Time Low” and refers to the lowest price an asset has ever had.

Bear market

A period of fall in a financial market is referred to as a bear market.

Bearish 

Refers to having a gloomy opinion of a market or asset’s worth, akin to a bear market. If you’re bearish on a cryptocurrency, you think its price will fall over time.

Bitcoin

World’s first decentralised, peer-to-peer digital money, founded in 2009 by Satoshi Nakamoto.

Block

Collection of transactions that have been published to the blockchain. Every block carries information about the block before it, allowing them to be linked together.

Blockchain

Decentralised digital ledger that allows users to store and transmit data without the need for a central authority. Blockchains are the foundational technology for cryptocurrency systems such as Bitcoin and Ethereum.

Block Explorer

A tool for viewing information on a blockchain, including as transactions, wallet addresses, market caps, and hash rates.

Bridge

A protocol that allows different blockchains to communicate with one another, allowing data, coins, and other information to be transferred.

Bull market

The period in which market prices are increasing.

Bullish

Having an optimistic opinion that a market or asset will grow in price, is akin to a bull market. If you’re a Bitcoin bull, you think the currency’s value will rise over time.

Burn

The act of withdrawing tokens from a cryptocurrency’s circulating supply by transferring them to an inaccessible wallet address is known as burning.

Centralised

A hierarchical organisation in which power and control are concentrated among a small set of decision-makers.

CEX – Centralized Exchange

A cryptocurrency exchange controlled by a centralised firm or organisation: Coinbase, Gemini, and Kraken, for example.

Coin 

A cryptocurrency developed on its own native blockchain and designed to serve as a store of value and medium of exchange inside that ecosystem. Ex: BTC, ETH, etc.

Collateral

Any asset that is accepted as collateral for a loan, such as real estate or a digital asset like an NFT.

Cold wallet

A device that stores cryptocurrencies offline. Cold wallets are either physical devices or sheets of paper that carry a user’s private keys. Cold wallets are considered a safer way of keeping cryptocurrencies since they are not linked to the internet.

Consensus

The condition of agreement among the nodes on a blockchain. For new transactions to be confirmed and new blocks to be added to a blockchain, consensus is required.

Consensus Mechanism

the mechanism through which nodes on a blockchain agree on a transaction or the network’s state. Ref: Proof of Stake and Proof of Work.

Cryptocurrency

A digital asset meant to be used as a means of trade and exchange. Unlike centralised banks or governments, cryptocurrency is borderless, safe, and maintained by blockchains.

DAO – Decentralized Autonomous Organization

An entity that is managed by its users and is built on open-source technology. DAOs are often focused on a single project or objective, and they substitute the old hierarchical processes of legacy organisations for blockchain-based principles.

Dapp – Decentralized Application 

A blockchain-based application built on open-source code. Dapps live independently of centralised organisations or individuals, and they often reward tokens to incentivise users to keep them up to date.

Data 

Any information entity on the internet, such as name, age, location, interests, browsing history, and so on. Web3 intends to secure this sensitive information and return control to the user.

Due Diligence 

Practise of performing your own study before investing in a cryptocurrency, stock, or other asset. It’s critical to do your own due diligence rather than relying on what someone else says or does.

Decentralized

A system that runs without the supervision of a central person or authority, instead relying on a peer-to-peer network.

Degen 

Derived from the phrase “degenerate gambler.” While degen still refers to those who make dangerous bets, it may also apply to anybody who works in the crypto and financial industries. This is a self-assigned word, similar to “ape,” and does not have a negative meaning. Degens are proud folks who like trading crazy call options on GME, buying the dip before paying their bills, and aping into shitcoins on occasion.

Decentralized Finance 

An ecosystem of peer-to-peer financial instruments based on public blockchains that do not need the usage of banks. DeFi applications are designed to be open and networked, enabling them to work together.

DEX – Decentralized Exchange 

A blockchain-based peer-to-peer cryptocurrency exchange. Instead of an intermediate person or centralised organisation, a DEX is managed by its users and smart contracts. Ex: Uniswap, 1inch, Sushiswap, etc.

Diamond Hands

An expression that implies you are highly optimistic on a certain asset and have no intention of selling despite market turbulence.

Difficulty

The amount of computational power required to validate transactions and mine blocks on a proof-of-work blockchain.

Difficulty Bomb

The process of making a proof-of-work blockchain more difficult to use in order to encourage users to switch to a different consensus method (such as proof-of-stake in the case of Ethereum).

DYOR stands for “Do Your Own Research.”

This term, like DD, is used to urge consumers to do their own research about an asset before investing in it.

Ethereum Improvement Proposal (EIP).

A common framework for submitting a new feature to the Ethereum community.

Ethereum Request for Comments (ERC)

A standard smart contract framework that Ethereum-based smart contracts are built on.

Ethereum

Ethereum is a decentralised application platform built on top of a public blockchain. Ethereum is a turing complete language that allows users to create and deploy sophisticated, self-executing smart contracts on the blockchain.

Fiat

A currency (like US Dollar) introduced as a legal tender and is supported and regulated by a government entity.

FOMO

FOMO stands for “Fear Of Missing Out.” A sensation of anxiety coming from the loss of an opportunity. This generally happens when investors acquire an asset after it has already seen a significant price gain, expecting to get in and out before a downturn occurs.

Fork

Changing the protocol of a blockchain is called forking it. It results in a soft fork when the modifications are small. When the modifications are more fundamental, a hard fork may occur, resulting in the development of a second chain with its own set of rules.

Fractionalising

To fractionalize the process of securing an NFT in a smart contract and then breaking it into smaller pieces that are distributed as fungible tokens. This decreases the cost of ownership and enables a community to own artwork and other digital assets.

FUD

Fear, Uncertainty, and Doubt (FUD) news about an asset that seems to be unfavourable but turns out to be erroneous or exaggerated.

Full node

A full node is a blockchain node that records the whole history of the blockchain as well as validates and relays transactions.

Fungible 

Interchangeable with anything of a similar kind.

Gas

On the Ethereum blockchain, gas is the cost paid by a user to complete a transaction or execute a smart contract. This cost is determined by the transaction’s complexity as well as the network’s current demand.

Genesis Block

A blockchain network’s very first block is known as the Genesis Block.

Gwei

Gwei is an ether denomination that is used to calculate Ethereum gas pricing. 1 ether = 10^9 gwei

Hard Fork 

A hard fork is a major modification to a blockchain that is incompatible with the present protocol and necessitates the creation of a new chain.

Hashing

Hashing is the process of taking any size input and turning it into a fixed-length fingerprint. Using a unique identifying code, hashing enables a collection of data to be encrypted, saved, and remembered. This is the foundation of blockchain technology, enabling for the safe verification and storage of data and transactions.

Hash rate

The pace at which a computer can create guesses to a cryptographic problem is known as hash rate, or hash power. On a proof-of-work blockchain, the hash rate may also refer to the total amount of power consumed by the whole network.

HODL

A phrase that means “hold” and is commonly interpreted as an abbreviation for “Hold On for Dear Life.” This phrase originated as a mistake on the Bitcointalk.org forum, when a member indicated that he was “HODLING” his bitcoin as the price fell. The misspelling became popular quickly and is still in use today.

ICO – Initial Coin Offering

The sale of tokens to the general public in order to generate funds for a crypto-based business is known as an ICO. ICOs are a kind of crowdfunding that is comparable to a typical company’s initial public offering (IPO).

IEO – Initial Exchange Offering

An initial exchange offering, like an initial coin offering, or ICO, is a technique of selling tokens to generate funds, but with more regulation. An IEO is operated by an existing cryptocurrency exchange, unlike an ICO, which sells new tokens directly to the public. IEOs aim to make the ICO process more safe by partnering with a well-known and recognised exchange.

Light node

A blockchain node that just downloads enough data from the blockchain to process and validate transactions is known as a Light Node. Light nodes, unlike full or master nodes, do not record the whole history of a blockchain.

Liquidity

The ease with which an item may be purchased, sold, or exchanged in a specific market or on an exchange can be termed as liquidity.

Liquidity Pool

A pool of user-provided money that are locked inside a smart contract to make trading on a DeFi platform easier. 

Market Cap

The overall worth of an asset based on its current market price is known as its market cap. The market capitalization of a cryptocurrency is calculated by multiplying the price of a single coin by its circulating supply.

Master Node

A master node is a blockchain node that validates and transmits transactions, records the blockchain’s entire history, and may vote, control the network, and perform other specialized roles.

Metaverse

A simulated digital environment that combines augmented reality (AR), virtual reality (VR), blockchain, and social media principles to create areas for rich user interaction that mirror the actual world.

Mining

Mining is the process of confirming transactions, arranging them into blocks, and then adding blocks to the blockchain under a Proof of Work system. Miners are those who participate in this procedure.

Minting

Minting is the process of confirming and certifying info on the blockchain, such as domain ownership.

To the moon

This term suggests that the value of an asset will rise to the point that it will literally reach the moon. This is practised by shills during a bull market.

Moonboy

Moonboy is a nickname used to describe excessively enthusiastic social media “financial gurus” who are continuously emphasizing how a specific asset (mostly cryptocoins) is “heading to the moon!”

NFT

A non-fungible token (NFT) is a digital certificate of authenticity that is used to allocate and verify ownership of a single digital or physical item. NFTs are not convertible with each other, unlike fungible tokens.

NFT domains

NFT Domains are blockchain-based domain names that enable users to establish their Web3 username.

NGMI

The acronym NGMI stands for “not going to make it.” This term is used to indicate that a project or asset has a low likelihood of becoming valued. This may also be aimed against a specific person, notably someone who has made a disastrous investment or transaction.

No-coiner

No-coiner is a word used to describe someone who does not own any cryptocurrencies or is inexperienced with cryptocurrency in general.

Node

Any device that is linked to a blockchain network is referred to as a node. Different nodes have different degrees of responsibility and may be used to verify transactions, maintain the blockchain’s history, transmit data, and perform other tasks. Nodes join together to construct the network’s architecture since blockchains are dispersed peer-to-peer networks.

Oracle

Oracle is a service that provides data from the outside world to smart contracts. Because smart contracts can’t access data outside the blockchain, they depend on oracles to retrieve, validate, and deliver external data.

P2P

A dispersed network of two or more computers that connect directly without the need of a central server or organisation.

Private Key

A private key is an alphanumeric passcode that may be used to withdraw funds from a blockchain wallet and to approve digital transactions. Because these private keys are lengthy and difficult to recall, wallets usually pair them with a recovery phrase.

Proof of stake

Proof of Stake (PoS) is a consensus process in which validators, or nodes, stake a certain amount of bitcoin on the blockchain in order to validate transactions and mint blocks. If a validator confirms a fraudulent transaction, they will lose a piece of their investment.

Proof of work

Proof of Work (PoW) is a consensus process in which miners are required to solve challenging mathematical problems in order to validate transactions and mint blocks. When a miner solves a challenge properly, they acquire permission to mint the next block and collect the block reward.

Public Key

This is an alphanumeric code that acts as the address for a blockchain wallet, comparable to a bank account number.

Pump and dump

A pump-and-dump strategy is one in which a cryptocurrency or other asset is pumped up, causing many people to acquire it and drive up its price. Those that hyped the asset then sell their interests when the price increases for a brief period of time. This causes a quick selloff, with everybody who did not sell losing money.

Rug Pull

Rug pulls a scam when a crypto enterprise takes the cash entrusted in its system and runs with them. Rug pulls may also happen in assets with a centralised ownership structure. 

Rollup

Rollup is a scaling technique that tries to increase transaction throughput while lowering costs by batching several transactions off-chain and then sending them as a single transaction to the main chain.

Satoshi

Satoshi is the lowest unit of Bitcoin, equaling 0.00000001 bitcoin. 

Seed Phrase

A seed phrase is a set of words that is used as a master password to access a cryptocurrency wallet. Because a single wallet may hold numerous accounts, each with its own private key, a seed phrase makes it simple to log in to all of them using the same password.

SHA-256

The Secure Hashing Algorithm (SHA) is a collection of cryptographic hashing algorithms developed by the National Security Agency (NSA). SHA-256 takes an input of data and creates a hash, which is a lengthy series of letters and numbers. This hash is then used to represent the data in a safe manner.

Sharding

Sharding is a technique for breaking down a network’s nodes into smaller groups (shards) in order to improve scalability. These shards may then achieve a consensus on behalf of the whole network, eliminating the requirement for each node to execute each transaction.

Shill

The practice of extensively advertising a cryptocurrency, stock, or other asset in order to boost acceptance and, as a result, enhance its price. This is mainly accomplished via social media spamming.

Shitcoin

Shitcoin is a cryptocurrency with questionable foundations and little to no practical use.

Sidechain

A sidechain is a separate blockchain that is used to unload transactions off the main chain in order to improve scalability or add new features.

Slippage

Between the moment an order is made and the time it is filled, the price of a cryptocurrency may vary. The gap between a cryptocurrency’s advertised price and the price at which a deal actually executes is referred to as slippage.

Smart Contract

On a blockchain, a smart contract is a self-executing code. Smart contracts eliminate the need for an intermediary and eliminate the need for the parties involved to trust one another.

Soft Fork

A soft fork is a blockchain upgrade that is backwards compatible. These modifications do not need the formation of a new chain, unlike a hard fork.

Solidity

Ethereum’s native programming language, Solidity, is primarily used to create smart contracts.

Stablecoin

A stablecoin is a token whose value is linked to the value of another asset. Stablecoins are normally backed by a fiat currency, such as the US dollar, but they may also be backed by tangible assets such as precious metals.

Testnet

The testnet is a software environment that simulates the mainnet blockchain and is used to test network updates and smart contracts before they are deployed to the mainnet.

TLD

The final component of a domain name, or the portion that comes after the “dot” sign, is known as the TLD. (Ex: .nft, .eth, etc.)

Token

Tokens are used to represent digital and physical assets, as well as to interact with decentralised applications (dapps).

TPS

TPS stands for Transactions Per Second, which is the amount of transactions a blockchain can process per second and is used to gauge its computing capability.

Total Value Locked

Total Value Locked (TVL) is a measurement of the assets locked within a smart contract for a dapp, commonly represented in USD.

WAGMI

“We’re All Gonna Make It,” a popular phrase in crypto and trading circles that denotes friendship and optimism.

Wallet

The private keys of blockchain assets and accounts are stored in a wallet, which can be a software program or a hardware device. A blockchain wallet, unlike a typical wallet, does not store the currencies or tokens itself. Instead, they save the private key that certifies a digital asset’s ownership.

Wallet Address

Wallet Address, also known as a public key, is an alphanumeric code that acts as a wallet’s address, comparable to a bank account number. 

Web1

Web1 is the earliest version of the internet, sometimes known as the “read-only web.” Web1 was defined by information-based static webpages. User involvement and user-generated material were minimal.

Web2

The “read-write web,” which began in the 1990s, is distinguished by user-generated content and enhanced user interfaces. As a result, blogs and social media platforms were born. Web2 put a greater focus on user experience and interoperability across various apps and websites, resulting in the large network of linked websites and services we are acquainted with today.

Web3

Web3 is the next generation of the internet, which will make use of blockchain technology, open-source apps, and data and information decentralisation. Web3 aspires to take control of the web away from monopolistic tech giants and give people back control of their data and content. The “read-write-trust web” is another name for it.

Wei

Wei is the lowest ether denomination, named after Wei Dai, a cypherpunk and cryptocurrency pioneer. 1 ether = 10^18 gwei

51% attack

An assault in which one entity or group gets control of more than 50% of a network’s nodes or mining power. This enables the organisation to cause network disruption by blocking particular transactions, double-spending crypto, and engaging in other malicious behaviour.