Crypto glossary

A

Airdrop

Free token distribution to wallets that meet some on‑chain criteria — usually past usage, holding, or governance participation. Some are massive (Uniswap, Arbitrum) and some are vapour. See airdrops & rewards.

Altcoin

Any cryptocurrency that isn't Bitcoin. The umbrella covers everything from Ethereum to obscure forks — useful as a category, useless as a quality signal.

AMM (Automated Market Maker)

The pricing engine inside a DEX. Instead of matching buyers and sellers, an AMM uses a math formula (e.g. x·y=k) over a pool of two tokens. Price moves automatically as the pool ratio shifts.

APY / APR

Annual yield. APR is the headline rate; APY compounds it. In DeFi the published number rarely lasts — early movers earn it, later entrants get diluted.

Approval

A signed permission letting a contract spend a token from your wallet. Phishing sites trick users into infinite approvals — review and revoke at revoke.cash.

B

Base

An Ethereum L2 by Coinbase. Cheap fees, massive memecoin volume, USDC‑native. Currently one of the busiest consumer chains.

Bear market

Sustained price decline. Liquidity dries up, projects fade, and tourists leave. Builders use it to ship; that's where most cycle winners are made.

Block

A batch of transactions confirmed together. Blocks chain backwards via hashes, hence "blockchain." Bitcoin: ~10 minutes per block. Solana: ~400 ms.

Bridge

A protocol that moves a token from one chain to another. The largest historical hacks have been bridge hacks — assume bridge risk is real and prefer canonical bridges.

BTC (Bitcoin)

The original cryptocurrency. Capped at 21 million. Most narratives in crypto orbit it — when BTC moves, alts move harder.

Bull market

Sustained price rise with broad participation. Easy money turns everyone into a genius. The hard part is keeping the gains.

C

CEX (Centralised Exchange)

An exchange that custodies your funds — Coinbase, Kraken, Binance. You don't control the keys; the exchange does. Convenient, regulated in many jurisdictions, but "not your keys" applies.

Chain

A specific blockchain — Ethereum, Solana, Base, Polygon. Each has its own rules, fees, wallets, and ecosystem. See multi‑chain wallets.

Cold storage

Keys held offline on a hardware device or paper. The standard for any meaningful balance. See cold storage guide.

Custody

Who holds the keys. Self‑custody = you do. Custodial = an exchange does. Most thefts and bankruptcies in crypto history happened at the custodian layer.

D

DAO (Decentralised Autonomous Organisation)

A community‑governed entity using on‑chain voting. Some run real treasuries; many are vibes with a multisig.

DApp (Decentralised App)

An app whose backend is a smart contract on a public chain. Frontend looks like a website; backend can't be silently changed by the operator (in theory).

DeFi (Decentralised Finance)

Lending, trading, derivatives, yield — all running on smart contracts instead of banks. Permissionless, transparent, and unforgiving of mistakes.

DEX (Decentralised Exchange)

An on‑chain exchange where you trade from your own wallet against a pool. No accounts, no KYC, no intermediary. See DEX trading.

DYOR

"Do Your Own Research." Cope phrase used to wave away due diligence. Take it seriously — the lazy version is following someone's lead.

E

ERC‑20

The Ethereum standard for fungible tokens — USDC, UNI, LINK, almost everything. Same standard runs on every EVM chain (Base, Arbitrum, Polygon).

ETH (Ether)

Native asset of Ethereum. Used to pay gas on the L1 and many L2s. The largest smart‑contract platform by liquidity and TVL.

EVM (Ethereum Virtual Machine)

The execution environment for Ethereum smart contracts. Many other chains (Base, Polygon, Arbitrum, BNB Chain) are EVM‑compatible — same wallets, same tooling.

F

Floor (NFT)

The lowest listed price in a collection. Treated as the spot price. Easy to manipulate with wash trades — never the only metric.

FOMO

Fear of missing out. The single most expensive emotion in crypto. The cure is a written plan you wrote when calm.

Fork

A copy of an existing protocol — code or chain. Hard fork = new chain. Soft fork = backward‑compatible upgrade. Memecoin forks are usually fork‑and‑rename.

G

Gas

The fee paid to validators/miners to include your transaction. Priced in the chain's native token. ETH gas spikes in volatile markets; Solana gas is fractions of a cent.

Genesis

The first block of a blockchain. Often hardcoded with a timestamp message — Bitcoin's references a 2009 newspaper headline.

H

Halving

Bitcoin's roughly four‑year event where block rewards drop by 50%. Cuts new supply. Historically correlates with bull cycles.

Hardware wallet

Dedicated device that signs transactions offline. Ledger, Trezor, Keystone, Coldcard. The single biggest security upgrade most users can make.

HODL

Hold long term, ignore the noise. Originally a typo of "hold" in a 2013 forum post; now a strategy.

I

Impermanent Loss

The opportunity cost of providing liquidity to an AMM versus just holding. Real, often misunderstood, sometimes more than the trading‑fee yield earned.

IDO / ICO

Initial DEX/Coin Offering — public token sale. The 2017 ICO era was mostly scams; modern launches use vesting, but the same mechanics apply.

L

L1 (Layer 1)

A standalone blockchain with its own consensus and security — Bitcoin, Ethereum, Solana.

L2 (Layer 2)

A chain that batches transactions and posts proofs back to an L1. Inherits L1 security, but with cheaper fees and faster blocks. Examples: Arbitrum, Optimism, Base.

Liquidity

How easily an asset can be traded without moving the price. Thin liquidity = high slippage. Most memecoin rugs are an exit‑liquidity problem.

LP (Liquidity Provider)

A user who deposits two tokens into a pool to earn trading fees. Earns yield, takes on impermanent loss.

M

Mainnet / Testnet

Mainnet = the live network with real value. Testnet = the practice version with fake tokens. Always know which you're on.

Market cap

Price × circulating supply. Headline metric, easy to game. FDV (fully diluted) tells you what it would be if every token unlocked.

Memecoin

A token whose value driver is attention, not utility. Sometimes wins big, usually round‑trips to zero. See memecoins explained.

Mint

The act of creating new tokens or NFTs. Often the first opportunity to acquire — and the highest‑risk window for scams.

Multisig

Wallet that requires multiple signatures to send. 2‑of‑3, 3‑of‑5, etc. Used by DAOs, treasuries, and security‑conscious individuals.

N

NFT (Non‑Fungible Token)

A token where each unit is unique — art, profile pics, in‑game items, music, tickets, identity. See NFTs & collectibles.

Node

A computer running the chain's software. Validators produce blocks; full nodes verify them; light nodes use cryptographic proofs to trust the network.

Nonce

A transaction's sequence number. Used to prevent replays and order transactions. "Nonce stuck" usually means an earlier tx is pending.

O

On‑chain / Off‑chain

On‑chain = recorded on the blockchain, public, verifiable. Off‑chain = anywhere else (CEX databases, Discord, your spreadsheet).

On‑ramp

Service that converts fiat (card, bank) into crypto. See crypto on‑ramps.

Oracle

A bridge that brings off‑chain data (prices, weather, sport scores) on‑chain so contracts can use it. Chainlink is the dominant one.

P

Permit / Permit2

EIP standards letting users authorise spending via a signed message instead of a separate on‑chain approval. Saves gas, also a phishing vector if signed blindly.

Phantom / MetaMask

The dominant browser/mobile wallets. Phantom for Solana (and now multi‑chain). MetaMask for Ethereum and EVM.

Phishing

Fake sites or messages that trick users into signing malicious transactions. The #1 cause of self‑custody losses. See cold storage.

PoS / PoW

Proof‑of‑Stake / Proof‑of‑Work. Two main consensus families. PoW uses electricity (Bitcoin). PoS uses staked tokens (Ethereum post‑Merge, Solana, most modern chains).

R

Rug pull

Project team drains liquidity or sells holdings, leaving holders with worthless tokens. The dominant memecoin failure mode.

RPC (Remote Procedure Call)

The endpoint your wallet uses to talk to the chain. Public endpoints are free; private ones (Alchemy, Infura, Helius) are faster and more reliable.

S

Seed phrase

Twelve or twenty‑four words that derive every key in your wallet. Anyone with the phrase has the funds. Never type it into a website. Never photograph it. Never email it.

Shitcoin

Pejorative for a token with no fundamentals. Used affectionately about your own bags, dismissively about everyone else's.

Slippage

The difference between the quoted and executed price on a DEX. Set the tolerance; on volatile coins set it wider, but never blanket‑high or sandwich bots eat the difference.

Smart contract

Code deployed to a chain that anyone can call. The "thing the DApp talks to." Immutable by default; some have admin keys (which is its own risk).

SOL (Solana)

High‑throughput L1, sub‑cent fees, sub‑second finality. Currently the dominant memecoin and consumer‑app chain by activity.

Stablecoin

A token pegged to a fiat currency (USDC, USDT, DAI). Used to park value without leaving crypto, settle trades, and move dollars cross‑border.

Staking

Locking tokens to help secure a PoS network. Earns yield, can be slashed if your validator misbehaves.

T

Tokenomics

The supply schedule, distribution, vesting, and incentives of a token. The single most underweighted factor by retail buyers.

TVL (Total Value Locked)

Dollar value of assets deposited into a protocol. Useful for ranking but mercenary capital inflates it.

V

Validator

The PoS node that produces and confirms blocks. Stakes tokens as collateral; earns rewards; can be slashed.

Vesting

Time‑locked release of tokens to insiders or investors. A "fully vested" token has no more cliff unlocks coming. Check the schedule before buying.

W

Wallet

Software (or hardware) that stores keys and signs transactions. Doesn't actually "hold" coins — coins live on the chain; the wallet holds the access. See multi‑chain wallets.

Whitelist

A list of addresses pre‑approved for a sale or mint. Often gated by community participation or holdings.

Wrapped token

A representation of one asset on another chain — wBTC on Ethereum, wETH on Solana. Backed 1:1 by the original via a custodian or bridge.

Y

Yield farming

Moving capital between DeFi protocols to chase the highest yield. Can be very profitable; can also be how exit‑scams collect deposits.

Related reading