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Reference

Crypto glossary

52 crypto terms defined in plain English. Many link straight to a full guide.

A

Address
A string of characters that acts like an account number for receiving crypto. Derived from your public key.
Airdrop
A distribution of free tokens to wallets, often used to reward early users or bootstrap a new project.
Altcoin
Any cryptocurrency other than Bitcoin. Short for "alternative coin".
AMM
Automated Market Maker. A type of decentralized exchange that uses liquidity pools and a formula instead of an order book.
APY / APR
Annual Percentage Yield / Rate. The yearly return on staking, lending or yield farming, with or without compounding.

B

Bear market
A prolonged period of falling prices and negative sentiment.
Block
A bundle of transactions added to the blockchain together, linked to the block before it.
Block reward
New coins (plus fees) paid to whoever produces a new block, as an incentive to secure the network.
Bridge
A tool that moves assets or data between two different blockchains. Historically a common target for hacks.
Bull market
A sustained period of rising prices and optimism.

C

CEX
Centralized Exchange. A company-run platform for buying and selling crypto, holding funds on your behalf.
Cold wallet
A wallet kept offline for maximum security, such as a hardware device.
Consensus mechanism
The method a network uses to agree on the valid state of the blockchain, e.g. Proof of Work or Proof of Stake.

D

DAO
Decentralized Autonomous Organization. A community-governed entity that runs on smart contracts and token voting.
DeFi
Decentralized Finance. Financial services like trading and lending rebuilt on public blockchains without intermediaries.
DEX
Decentralized Exchange. A peer-to-peer marketplace for swapping tokens directly from your wallet.

F

FDV
Fully Diluted Valuation. A coin’s price multiplied by its maximum eventual supply.
Fiat
Government-issued currency like the US dollar or euro, not backed by a commodity.
Fork
A change to a blockchain’s rules. A hard fork can split one chain into two.

G

Gas
The fee paid to process a transaction or smart contract on a network like Ethereum.
Gwei
A small denomination of ether (one-billionth of an ETH) commonly used to price gas.

H

Hash
The fixed-length output of a one-way cryptographic function, used to secure and link blocks.
Hot wallet
A wallet connected to the internet — convenient but more exposed than cold storage.

I

Impermanent loss
The opportunity cost a liquidity provider can suffer when pooled asset prices diverge.

K

KYC
Know Your Customer. Identity checks that regulated exchanges must perform on users.

L

Layer 1
A base blockchain such as Bitcoin or Ethereum that settles its own transactions.
Layer 2
A network built on top of a Layer 1 to make it faster and cheaper, e.g. rollups.
Liquidity
How easily an asset can be bought or sold without moving its price.
Liquidity pool
A pot of two or more tokens that powers trading on an AMM and earns fees for providers.

M

Market cap
A coin’s price multiplied by its circulating supply — a measure of relative size.
Mempool
The pool of pending, unconfirmed transactions waiting to be included in a block.
Mining
Using computational work to validate transactions and produce blocks in Proof of Work systems.

N

NFT
Non-Fungible Token. A unique, indivisible token representing ownership of a specific item.
Node
A computer running blockchain software that helps validate and relay the network’s data.

O

Oracle
A service that feeds real-world data, such as prices, to smart contracts.

P

Private key
The secret that controls your funds and signs transactions. Never share it.
Proof of Stake
A consensus mechanism where validators lock up coins to earn the right to produce blocks.
Proof of Work
A consensus mechanism where miners expend energy to secure the network.
Public key
The shareable counterpart to your private key, used to derive your address.

R

Rollup
A Layer 2 that bundles many transactions and posts a compressed proof to the base chain.

S

Seed phrase
A 12–24 word backup that can restore an entire wallet. Guard it carefully.
Smart contract
Self-executing code on a blockchain that runs exactly as written.
Stablecoin
A cryptocurrency designed to hold a steady value, usually pegged to a fiat currency.
Staking
Locking up coins to help secure a Proof of Stake network in return for rewards.

T

Token
A crypto asset issued on an existing blockchain, as opposed to a coin with its own chain.
Tokenomics
The economics of a token: its supply, distribution, incentives and utility.
TVL
Total Value Locked. The amount of assets deposited in a DeFi protocol.

V

Volatility
The degree to which a price swings up and down over time.

W

Wallet
Software or hardware that stores your keys and lets you manage crypto.
Web3
A vision of a decentralized, user-owned internet built on blockchains.
Whitepaper
A document outlining a project’s purpose, design and technology.

Y

Yield farming
Moving crypto between DeFi protocols to maximise returns from fees and incentives.