Web3 Glossary

Decoding the Language of Web3

Welcome to our comprehensive guide, helping you navigate the intricacies of the Web3 ecosystem.

This glossary provides a broad understanding of essential terms and concepts commonly encountered in the Web3 ecosystem. Keep in mind that the Web3 space is highly dynamic, and new terms and concepts may emerge regularly. Feel free to refer back to this guide to clarify any Web3-related terminology as you navigate this exciting and rapidly evolving field.

If you have any feedback or would like to suggest additions to this glossary, please don't hesitate to share your insights through the provided form.

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A​

• ABI (abrv) - Application Binary Interface, is represented in JSON format and specifies how to encode and decode data from a particular smart contract.

• Address (noun) - A unique set of alphanumeric characters that refers to a specific storage slot on a network you can use to send and receive cryptocurrency.

• Airdrop (noun, verb) - The distribution of tokens directly to users' wallets by crypto projects often for meeting certain participation criteria (i.e., being active in a community, holding a certain number or type of token(s), holding a token for a certain period of time).

• Algorand (noun) - A layer 1 blockchain founded in 2019 that utilizes the Proof of Stake (PoS) consensus mechanism. Its native token is ALGO and is used for staking and paying transaction fees. Its networks include MainNet, TestNet, and BetaNet.

• Algorithm (noun) - A set of rules/instructions used to solve a problem or conduct a computation.

• Allowlist (noun) - Pre-approved list of users or wallets that are allowed to perform some restricted action (e.g. withdrawal funds only to wallets on the Allow List).

• Alpha - Insights (noun) - Early insights or information about a project or opportunity that the rest of the market hasn't found out about yet.

• Alpha - Version (noun, adjective) - The first version or look of a product released by their team.

• Altcoin (noun) - Shorthand for “alternative coins” and simply means cryptocurrencies other than Bitcoin and Ethereum.

• Anchor (noun) - Programming language for Solana Programs.

• Ape (verb) - To rush ("ape in") and invest heavily into a token without much knowledge of the asset.

• API (abrv) - Application Programming Interface is a connection between two computers that allows them to communicate with each other. It also specifies how two software components should interact.

• Arbitrum (noun) - A layer 2 scaling solution for Ethereum that was founded in 2019. It utilizes ETH to pay for transaction fees, and its networks include Arbitrum Mainnet and Rinkeby Testnet.

• Archive Nodes (noun) - Node that has data since genesis block.

• ATH (abrv) - All-time high (record for the highest sale price of a token).

• ATL (abrv) - All-time low (record for the lowest sale price of a token).

• Auction (noun, verb) - A sales event where buyers place a bid on an asset or service.

• Authority (noun) - The entity who is able to sign a transaction on chain to make changes to an on-chain program, token account, etc.

• Avalanche (noun) - A layer 1 blockchain founded in 2020 that is built on Proof of Stake (PoS). It's native token is called AVAX. Its network include Mainnet and Fuji.

B​

• Bear Market (noun) - An extended period of time when a market's price decreases.

• Beta - Version (adj) - The early version of an app or a program. It is usually a version of a program that is made available for testing and getting user feedback.

• Bid Price (noun) - The highest amount a buyer is willing to pay for a cryptocurrency token or NFT.

• BNB Smart Chain (noun) - Originally named Binance Smart Chain, BNB Smart Chain is a layer 1 blockchain founded in 2020 which runs parallel with the Binance Chain. It utilizes the Proof of Staked Authority (or PoSA) consensus mechanism, and its native token, called BNB, is used for staking and paying transaction fees. Its networks include BSC Mainnet and BSC Testnet.

• Binary code (noun) - A two-symbol (0 and 1) system that represents a text or any other data.

• Bitcoin (noun) - The first ever cryptocurrency on a Proof of Work (PoW) blockchain which was created in 2009 by Satoshi Nakomoto (a pseudonymous person).

• Block (noun) - A block in a blockchain network is like a link in a chain. In the field of cryptocurrency, blocks resemble records that store valid transactions like a page of a record book and are hashed and encrypted into a hash tree or Merkle tree.

• Block Explorer (noun) - A website/tool that allows users to browse information about blocks and transactions on a specific blockchain.

• Block Size (noun) - The amount of data regarding a transaction that a single block can carry.

• Block Time (noun) - The average time miners or validators take to create a new block.

• Blockchain (noun) - A distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format.

• Bridge (noun) - A bridge connects two chains and allows NFT, tokens, and other arbitrary data to be transferred between them.

• BUIDL (verb) - A term derived from the word "Build," which is similar to the term "HODL," and refers to the building and contributing to the blockchain and cryptocurrency ecosystem.

• Bull Market (noun) - A financial market in which prices are increasing or are expected to rise.

• Burn (verb) - To destroy or remove one or more tokens out of supply.

C​

• CC0 (abrv) - "No Rights Reserved" option in the Creative Commons toolkit - waiving all copyright and similar rights and dedicating those to the public domain so that others may add, modify, or otherwise freely build upon the work without restriction.

• Celo (noun) - A layer 1 blockchain founded in 2020 that is built on Proof of Stake (PoS) that is designed to support stable coins. It's native token is called CGLD. Its primary network is MainNet.

• CEX (abrv) - Centralized Exchange, an off-chain program for buying, selling, trading, or swapping on-chain assets.

• Cloud (noun) - A network of servers that can be accessed over the internet.

• Cluster (noun) - Set of validators collaborating to process transactions and maintain ledger integrity.

• Coin (noun) - A single unit of currency that can be traded or exchanged.

• Cold Wallet (noun) - A wallet that is offline, hardware, or paper, not connected to the internet in any way and usually air-gapped.

• Collateral (noun) - An asset that is used as a guarantee that someone will repay a loan which he or she took.

• Consensus (noun) - A method for achieving agreement, trust, and security across a decentralized computer network.

• Cope (verb) - To deal with and attempt to overcome problems or difficulties.

• Cross-Chain (noun) - Activity that allows several blockchains to communicate with one another by exchanging information/data.

• Cryptocurrency (noun) - A digital asset that is encrypted using cryptography and is built on the blockchain technology.

• Cryptography (noun) - The practice/method of exchanging secure and encrypted messages between two or more parties is known as cryptography.

• Custodial Wallet (noun) - A third party such as an exchange or custodian is responsible for the account/wallet private keys, assets, and overall security and functionality.

D​

• DAO (abrv) - Decentralized Autonomous Organization, sometimes called a decentralized autonomous corporation, is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government.

• dApps (noun) - A decentralized application is a computer application that runs on a decentralized computing system. DApps have been popularized by distributed ledger technologies such as the Ethereum blockchain, through the use of smart contracts.

• Decentralized (adj) - No unique owner, operator, or single point of failure.

• DeFi (noun) - Decentralized finance is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments. Instead, it utilizes smart contracts on blockchains (e.g., Ethereum).

• Degen (adj) - Degenerate, a user who engages in complex strategies (often in DeFi) to enhance the probability of profit.

• DEX (abrv) - Decentralized Exchange, an on-chain program for buying, selling, trading, or swapping on-chain assets.

• Diamond Hands, 💎🙌 (noun, verb) - Holding onto ones tokens/assets despite external market conditions.

• Discord (noun) - A community-management platform that allows for sharing information across a network of individuals. Commonly used to manage crypto communities.

• Drop (noun, verb) - (see Airdrop)

• Due Diligence (noun) - Research performed on a particular project, token, NFT, or dApp (often referred to as DD).

• DYOR (abrv) - Do your own research.

E​

• Eat Glass (verb) - Term used to describe developers treading new territory and grinding through new or difficult content.

• EIP (abrv) - Ethereum Improvement Proposals represent decision making protocols for Ethereum protocols and standards.

• Endpoint (noun) - The network-specific address of a server that is used to make requests to a blockchain.

• ENS (abrv) - Ethereum Naming Service.

• Epoch (noun) - A period of time defined by a blockchain in which new blocks are created.

• ERC (abrv) - Ethereum Request for Comments is an application level standard application level standards for Ethereum (e.g. ERC-20 is a common protocol for deploying fungible tokens on Ethereum).

• Escrow (noun) - A type of on-chain smart contract wallet where assets are stored and held until certain conditions are met.

• ETH (noun) - Ether, the native cryptocurrency on the Ethereum blockchain. ETH is used to pay for transaction fees.

• Ethereum (noun) - An open-source and decentralized layer 1 blockchain, which was founded in 2015. Its native cryptocurrency is ETH, which is used for staking and paying transaction fees. Its networks include Ethereum Mainnet, Ropsten Testnet, Rinkeby Testnet, Kovan Testnet and Goerli Testnet.

• EVM (abrv) - Ethereum Virtual Machine defines the rules for computing on Ethereum, enabling developers to launch and execute smart contracts.

• Exchange (noun) - A business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies.

F​

• Fantom (noun) - A layer 1 blockchain founded in 2018 that is built on Proof of Stake (PoS), using an asychronous consesus mechanism to support scalability and security. It's native token is called FTM. Its primary network is MainNet.

• FDV (abrv) - Fully Diluted Valuation, calculated by multiplying the current market price of a token by its max supply.

• Fiat (noun) - Fiat money is a type of money that is not backed by any commodity such as gold or silver, and typically declared by a decree from the government to be legal tender.

• Flip/Flippen(ing) (verb, noun) - When a token or asset passes the market cap of another more established asset (commonly referred to in the idea of Ethereum flippening Bitcoin).

• FOMO (abrv) - Fear of Missing Out.

• Fork (verb, noun) - A change to a blockchain or program's protocol that results in two blockchains or programs sharing a common previous history.

• Fractionalization (noun) - The process of sub-dividing an asset into multiple pieces. Commonly used for dividing a single non-fungible token into many fungible tokens (that collectively represent the original NFT).

• Frens (noun) - Friends.

• FUD (abrv) - Fear, Uncertainty and Doubt.

• Full Nodes (noun) - Support the network by storing full blockchain data and serving it upon request.

• Fungible Token (noun) - An on-chain asset that has a quantity greater than 1 and those assets have no discernable or unique traits that differentiate one from another.

G​

• Gas (noun) - The cost associated with computational effort required to perform a transaction on a blockchain.

• Generative Art (noun) - Combination of art and code that uses randomization and algorithms to generate a set of unique designs with varying rarity based on a common set of initial designs or design layers.

• GM (abrv) - Good morning.

• GMI (abrv) - Gonna Make It.

• Gnosis (noun) - A layer 2 stable payments blockchain founded in 2017, designed for fast and inexpensive transactions. Any contract that works on the Ethereum mainnet can be redeployed to the Gnosis chain. It's primary network is MainNet.

• Gwei (noun) - 1 billionth of an Ether.

H​

• Hackathon/Hacker House (noun) - In-person meeting of developers and other community members to work collaboratively to solve one or more common objectives.

• Harmony (noun) - A layer one blockchain, launched in 2019, whose purpose is to provide an efficient, secure and scalable blockchain through their Effective Proof of Stake mechansim. Its token is called "One" and networks include the Mainnet and Testnet.

• Hash Rate (noun) - Amount of computing power being used by a Proof of Work network.

• Hashing (verb) - Compression of on-chain data.

• HODL (verb) - "Hold" or maintain a position.

• Hot Wallet (noun) - A wallet that is networked or connected to the internet in some way (mobile, web).

I​

• ICO (abrv) - Initial Coin Offering or Initial Currency Offering is a type of funding using cryptocurrencies. It is often a form of crowdfunding, although a private ICO which does not seek public investment is also possible.

• IDO (abrv) - Initial DEX Offering.

• IP (abrv) - Intellectual Property.

• IRL (abrv) - An abbreviation for the term, in real life.

• IYKYK (abrv) - If you know, you know.

L​

• Lamport (noun) - The smallest denomination of a SOL (1 billionth of 1 SOL).

• Layer 1 (L1) (noun) - A main network that refers to a blockchain that defines protocol rules (e.g. Bitcoin, Ethereum, Solana).

• Layer 2 (L2) (noun) - A program or technology that exists on top of a Layer 1 blockchain, often created to accomplish something that may not be easily achievable by its parent layer 1 (e.g. increase speed or functionality).

• LFG (abrv) - Let's F*N go!

• Light Nodes (noun) - Do not have the entirety of the current blockchain state and depends on a full node, useful for low memory and computational devices.

• Liquidity (noun) - A measure for how easily an asset can be converted to another (usually cash but also common for Layer 1 tokens).

• Liquidity Pool (noun) - A smart contract that facilitates a decentralized funded pooling of multiple assets to ensure those assets can easily be traded for each other.

• Liquidity Provider (noun) - A person or entity that deposits one or more assets to a liquidity pool, often in exchange for some type of earned benefit (e.g. fee collection, token drop).

• Looks Rare (phrase) - Rarity is often a driver of value in this space. Used ironically.

M​

• Market Cap (noun) - Market cap is calculated by multiplying the current price of a token by its circulating supply.

• Merkle Trees (noun) - A data structure used in blockchains to ensure data is encoded securely and can be efficiently utilized.

• Metaverse (noun) - A network of 3D virtual worlds.

• Mining (noun) - The process of performing cryptographic computations to solve a problem first in exchange for token rewards. Used in Proof-of-Work chains.

• Mint (verb) - To manifest new tokens onto a blockchain.

• Moon (verb) - Refers to a strong belief that certain cryptocurrency is soon going to rise significantly in price.

• Multi-Party Computation (noun) - This is done by randomizing the individual secrets. There are always more than 3 endpoints across servers or mobile devices and those secrets are never shared. The endpoints participate in a decentralized wallet creation protocol and the public key that corresponds to the set of the individual private shares (3) gets computed. Whenever a signature is requested for a tx, the quorum (of endpoints, will be 3 or more) are a part of a distributed signature process where each endpoint validates the transaction and policy and then signs the transaction.

• Multi-Sig (noun) - Like MPC, Multi-Sig eliminates a single point of failure but the issues with Multi-Sig lie in interoperability and being protocol agnostic. Not all cryptocurrencies or DAOs support Multi-Sig as each protocol requires a wallet provider to implement different code. New wallets would need to be created to modify quorums and refresh any keys. This was established when it was just BTC as a currency that was around, and has posed different challenges for different protocol layers. Due to some of the limitations with Multi-Sig it can be difficult to securely support new assets and the management of multiple implementations across different chains can be difficult to stay on top of.

N​

• NFA (abrv) - Not financial advice.

• NFT (Non-Fungible Token) (abrv) - An on-chain asset that has a quantity of 1, which has unique traits that differentiate it from any other.

• NGMI (abrv) - Not gonna make it.

• Node (noun) - A server or computer running blockchain-specific software used for connecting to and interacting with that blockchain.

• Non-Custodial Wallet (noun) - A wallet that is fully controlled by the user (whether an end user or institutional user) making the user responsible for the security of the wallet, private keys, and assets stored in the wallet.

O​

• Optimism (noun) - A layer two blockchain, functioning on top of Ethereum, which was founded in 2019 with the intent of processing transactions quicker and less expensive. Optimism’s networks include Mainnet, Goerli and Kovan, though Kovan is planned to be deprecated after August 15th, 2022.

P​

• P2E (abrv) - Play to Earn, concept in gaming that rewards users with some value in exchange for completing certain in-game tasks.

• PFP (abrv) - Profile picture.

• Polygon (noun) - A layer 2 blockchain founded in 2020 built on the Proof of Stake (PoS) consensus mechanism. The native token on Polygon is called MATIC and is used for staking and paying transaction fees. Its networks include the Polygon mainnet and Mumbai testnet.

• Private Key (noun) - A private key is a secret number that is used in cryptography, similar to a password. In cryptocurrency, private keys are also used to sign transactions and prove ownership of a blockchain address.

• Proof of Authority (noun) - PoA, In PoA-based networks, transactions and blocks are validated by approved accounts, known as validators.

• Proof of History (noun) - PoH, A consensus mechanism that relies on an internal clock to track the passage of time.

• Proof of Stake (noun) - PoS, a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain.

• Proof of Work (noun) - PoW, a form of adding new blocks of transactions to a cryptocurrency's blockchain. The work, in this case, is generating a hash (a long string of characters) that matches the target hash for the current block. The crypto miner who does this wins the right to add that block to the blockchain and receive rewards.

• Public Key (noun) - A unique cryptographic public identifier for an on-chain account.

• Pump and Dump (noun) - Scheme by which market manipulators systematically inflate the price (pumping) of a cryptocurrency or NFT (often through the use of misleading social media campaigns) with the intent of selling (dumping) the asset and taking quick profits.

R​

• Rent (noun) - The cost to store data on a blockchain.

• RPC (abrv) - Remote Procedure Call. Effectively a service that connects a client (or user) to a server (or blockchain).

• Rug (noun) - A crypto project that acts unethically towards its community. Most commonly interpreted as abandoning a project with all community funds.

S​

• Satoshi (noun) - The smallest denomination of Bitcoin (100M Satoshis equal 1 Bitcoin). Named after Satoshi Nakomoto (Bitcoin founder).

• Seed Phrase (noun) - Derived in 2013, this was invented as a way to translate access keys into words and the mnemonic phrase was born. A seed phrase is a master access key to your cryptocurrency wallet. Seed phrases also serve as a backup of your wallet. The seed phrase represents both access key and instruction for the wallet on how and which accounts to set up.

• Ser (noun) - "Sir". It is a way to respectfully introduce oneself or perhaps share an alternative point of view.

• SHA-256 (noun) - Cyrptographic encryption type that translates data into a 256 bit value.

• Sharding (verb) - The process of splitting a blockchain into multiple smaller pieces. Each piece is called a 'shard'.

• Shill (verb) - A person or group of people promoting a particular cryptocurrency to create excitement for it.

• Sidechain (noun) - A separate blockchain network that runs in parallel to a main chain and allows for exchanges with the main chain via a 2-way peg.

• Slippage (noun) - The difference in price between the expected price of a trade and the actual execution price of that trade.

• Smart Contract (noun) - On-chain programs with pre-defined rules to govern how users and tokens interact with program when certain conditions are met.

• Smart Contract Wallet (noun) - these wallets are accessed and controlled via smart contract code and two types are supported; externally owned accounts that are accessed via a private key or seed phrase and contract accounts that are controlled via smart contract. These are more similar to a traditional finance app and include features such as; multi-signature authorization, account freezing, transaction limits, 2FA, allow listing, and guardians.

• SOL (noun) - Solana, the primary cryptocurrency on Solana blockchain.

• Solana (noun) - A layer 1 blockchain founded in 2020 that is built on a concept called Proof of History (PoH) to enable scaling and affordability. Its native token is called SOL. Its network include Mainnet-Beta, Testnet, and Devnet.

• Solidity (noun) - Solidity is an object-oriented programming language for writing smart contracts. It is used for implementing smart contracts on various blockchain platforms, most notably, Ethereum.

• SPL (abrv) - Solana Program Library, which includes the on-chain Solana Token Program among others.

• Stable Coin (noun) - Cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities.

• Staking (noun) - The process of locking digital assets on-chain, usually in exchange for earning some type of incentive (e.g. interest, token yield, etc.). Staking often comes with some type of risk--in proof-of-stake, validators' stake is at risk if the validator confirms illegitimate transactions.

T​

• Terra (noun) - An open-source blockchain created in 2018 that utilizes the Proof-of-Stake consensus. In May, 2022, a new Terra chain emerged with the new Pheonix-1 Main network launching on May 27.

• Token (noun) - Virtual currency token or a denomination of a cryptocurrency. It represents a tradable asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes.

• Tokenomics (noun) - The economic details of a token project, including information about supply, inflation/deflation, or other mechanisms that may impact the value of an asset in the future.

• TPS (abrv) - Transactions Per Second.

• Transaction (noun) - A user-signed event on-chain that calls one or more on-chain programs to be executed.

• TVL (abrv) - Total Value Locked.

U​

• Up only (adj) - A term commonly used to portray that a project or cryptocurrency will continue to succeed.

• Utility (noun, adj) - Often used to describe the functionality of a cryptocurrency or NFT.

V​

• Validator (noun) - A server that participates in a blockchain's consensus mechanism. Validators are responsible for processing transactions and verifying the state of a blockchain.

W​

• WAGMI (abrv) - We're all gonna make it / We are gonna make it.

• Wallet (noun) - A crypto wallet is used to sign transactions and store the private keys that are used to interact with the blockchain network. A wallet contains a public key (this is the wallet address) and the private keys needed to complete and sign transactions. Control of the private key means control of the assets.

• Web3 (noun) - Web3, also known as Web 3.0, is an idea for a new iteration of the World Wide Web that incorporates decentralization and self-custody of assets. It is often contrasted with Web 2.0, wherein data and content are centralized in a small group of companies sometimes referred to as "Big Tech".

• Wei (noun) - The smallest denomination of Ether (there are 1e18 wei in 1 Ether).

• wen (adv) - When. Often used ironically to prod a when something significant might happen for a project (e.g., wen mint? wen airdrop? wen moon?).

• Whale (noun) - An individual or entity holding a large amount of a cryptocurrency that can impact market prices.

• Whitelist (noun) - Pre-approved list of users or wallets that are allowed to participate in some type of event (e.g., mint a new NFT or partipicate in an IDO).