Glossary – Web3 is Going Just Great

4: "4" is shorthand used to dismiss something as "FUD, fake news, attacks, etc." This is a reference to a list of resolutions published by Binance CEO Changpeng "CZ" Zhao in January 2023, where he included "4. Ignore FUD, fake news, attacks, etc. In the future, would appreciate if you can link to this post when I tweet '4'. 🙏" The practice has been adopted by crypto Twitter more broadly, sometimes used to dismiss purported "FUD", but sometimes to make fun of people who appear to be trying to dismiss serious concerns. (Twitter)
51% attack or majority attack: an attack on a blockchain made possible when a single person or group gains control of over 50% of a blockchain’s hashing power, enabling them to block new transactions from being confirmed as well as change the ordering of new transactions. It also allows the malicious agents to essentially rewrite parts of the blockchain and reverse their own transactions, leading to an issue known as double spending. (CoinDesk)
address: the string of characters used to identify a cryptocurrency wallet. On Ethereum, these are 42-character strings beginning with 0x, but different blockchains use different address formats.
address poisoning / address spoofing / zero-transfer attack: an attack in which scammers create a crypto wallet address that shares characters (typically beginning and end characters) with a user's wallet address, then sends transactions to the target user's other wallets. The attack capitalizes on the fact that users often copy-and-paste addresses from previous transactions rather than entering them anew, and so can mistake a similar-looking scam address for their intended target address and erroneously send funds to it. (CoinMarketCap)
airdrop: a distribution of a cryptocurrency token or an asset like an NFT, usually for free, to numerous wallet addresses. Airdrops are primarily implemented as a way of gaining attention and new followers, resulting in a larger user-base and a wider disbursement of coins. (Wikipedia)
algorithmic stablecoin: stablecoins that attempt to maintain their target value by implementing various market incentives and mint/burn techniques. These are distinct from asset-backed stablecoins, which ostensibly maintain reserves of U.S. dollars or other assets to back their price
allowlist / whitelist: an access list that guarantees a person the opportunity to mint a given NFT. This is used to prevent a mad dash to mint NFTs, a style of minting that is often gamed by bots for popular projects.
altcoin: "alternative" cryptocurrencies; that is, cryptocurrencies that aren't Bitcoin
annual percentage rate / APR: the rate of return on an investment, not including the effect of compounding interest (Wikipedia)
annual percentage yield / APY: the rate of return on an investment, including the effect of compounding interest (Wikipedia)
apes: typically referring to the popular Bored Apes Yacht Club NFT project, "apes" has also become a slang term to refer to NFTs in general (regardless of what they depict)
artificial intelligence / AI: a very broad term applied to applications including machine learning, natural language processing, and — increasingly — large language models like GPT
audit: a process in which an individual or company checks a blockchain-based project for flaws in its code, as well as tries to determine the legitimacy of the project based on other factors (identity of its creators, etc.)
augmented reality / AR: an interactive experience that combines the real world and computer-generated content (Wikipedia)
bad debt: debt that is no longer possible to be recovered (Investopedia)
Bitcoin maximalist / Bitcoin maxi: people who believe that Bitcoin is the only digital asset that will be needed in the future, and that all other digital currencies (and, in some cases, all other currencies) are inferior (Investopedia)
blockchain: a blockchain is a type of distributed database that is often decentralized across many different servers. Entries can be added to a blockchain, but typically can't be changed or erased without enormous difficulty and disruption to the network. There are many different blockchains; some of the best known include Bitcoin and Ethereum. (Wikipedia)
bridge: a blockchain bridge is a method of allowing different blockchains to interoperate, allowing users to use tokens in a currency tied to one blockchain to operate on another. (CoinMarketCap)
bug bounty: typically referred to funds distributed to ethical hackers in exchange for them privately disclosing software bugs to the company, crypto projects have taken to using the term "bug bounty" to also refer to ransom that is offered to hackers who have successfully stolen money, in exchange for them returning the funds and usually with promises that the affected platform won't seek prosecution
burning: the process in which users remove tokens from circulation. This can apply to various assets including cryptocurrencies, where it is done to reduce the number of coins in circulation, or to NFTs, where it makes the NFT impossible to ever trade again. The process of burning involves sending the token to a wallet address that is unable to send tokens, permanently locking it there. (Investopedia)
coin: a specific cryptocurrency (e.g. Bitcoin, Ethereum, Dogecoin)
cold wallet: a cryptocurrency wallet that is not Internet-connected, in contrast to a "hot wallet"
DAO / decentralized autonomous organization: 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 (Wikipedia)
dApp / decentralized app: a computer application that runs on a decentralized computing system (Wikipedia)
decentralized exchange / DEX: cryptocurrency exchanges that enable peer-to-peer exchanges of crypto assets without a centralized intermediary
DeFi / decentralized finance: 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, and instead utilizes smart contracts on blockchains. Types of DeFi platforms include crypto exchanges, loan platforms, investment and savings accounts, and insurance providers. (Wikipedia)
degen: short for "degenerate", the term refers both to the strategy of taking enormous risks without much information, as well as the people who employ that strategy
deployer: a contract deployer is the wallet address responsible for creating a smart contract. While some might use a personal wallet to deploy a contract, for most projects the deployer is a dedicated crypto wallet created for that purpose.
derivative: derivatives trading involves making trades based on the price behavior of an underlying asset, such as a crypto token, without necessarily holding the asset itself. There are multiple types of derivatives, including futures and options. (Wikipedia)
disgorgement: giving up something (such as profits illegally obtained) on demand or by legal compulsion (Wikipedia)
double-spending: a potential flaw in a cryptocurrency in which the same single digital token can be spent more than once (Wikipedia)
double-your-money scam: an online scam in which people are convinced to send a sum of money with the promise that they'll receive twice as much back. In some cases, the scammers will actually double a small amount of money paid as a "test" transaction to convince people to transfer a larger sum; in other cases, the scammers don't send any amounts back. The scam often relies on impersonating wealthy and influential individuals such as Elon Musk or Vitalik Buterin.
doxing: discovering the identity of pseudonymous cryptocurrency traders, often those running a project. The term "self-doxing" is the process of disclosing one's own identity (often in hopes of lending legitimacy to a project). Projects where the developers' identities are known are often described as "fully-doxed". In the crypto space, the term is not typically used with the negative meaning that it has elsewhere.
Dutch auction: an auction which begins with a high asking price which lowers over a set time period. With NFTs, collectors can buy at any price point as the price decreases, but often have to weigh whether to wait in hopes of buying at a lower price against the likelihood a collection with a limited number of NFTs will sell out.
DYOR (do your own research): a common phrase in the crypto communities. Proponents would say that it is used to tell people they should verify everything themselves and not take advice from those who may not have their best interests in mind. Critics would point out that it's often used to dodge answering tricky questions, or imply someone doesn't know what they're talking about.
exchange-traded fund / ETF: a type of investment fund offered on traditional financial exchanges, which offer exposure to various assets. In the crypto world, ETFs offer investors using traditional brokerages exposure to various cryptocurrencies or crypto derivatives without needing to trade crypto directly. Cryptocurrency ETFs have been the subject of protracted regulatory battles.
fiat: government-issued legal tender—what most of us know as "money"
flash loan: unsecured loans that don't require collateral from the borrower. Funds are borrowed, used, and returned all within one transaction, and they are typically used to provide leverage in arbitrage opportunities. They have also become a common entry point for hackers to exploit flaws in various DeFi protocols. (Radix)
floor price: the lowest price at which any NFT in a collection can be bought
FOMO / fear of missing out: the fear that if one doesn't buy in to a crypto project, they may later regret it
forced liquidation / "getting liquidated": when a user takes out a leveraged position and can no longer meet the margin requirements for the position, they lose their initial capital in the position in what is known as forced liquidation, or "getting liquidated". Because of crypto's volatility, and the frequency of price manipulation attacks on the ecosystem, this can happen very suddenly. Events in which some users are liquidated and lose their positions, which then lowers the price further, which then causes others to be liquidated are referred to as "cascading liquidations".
fork: creating a new version of a blockchain or project based on an existing one. This is sometimes done when starting an entirely new project that is similar to one that already exists, to take advantage of the work that's already been done. It is also the term used when a blockchain needs to make a change to functionality, either to add new features or to fix security bugs—in this case, nodes must change over to the new version, or the chain will split into two separate chains with the same history, but different data going forward. (Wikipedia)
freezing: a process in which a centralized exchange, platform, or token issuer prevents an asset from being traded, usually because it has been identified as stolen or otherwise linked to illicit activity. This also sometimes refers to the process of preventing an entire wallet from transacting on a platform. There is effectively no way for third parties to completely prevent a person from trading a specific asset, but when major exchanges freeze trading for an asset or wallet it makes it substantially harder for that asset to be sold or traded.
front-running: in crypto, front-running is a strategy in which bots scan the pool of pending transactions — known as the "mempool" — for information about trades that are about to be processed. Using this information, they can configure their own transactions in order to profit from upcoming transactions.
FUD (fear/uncertainty/doubt): in normal usage, "FUD" is a strategy to influence perception by disseminating negative and dubious or false information and a manifestation of the appeal to fear. (Wikipedia). Crypto projects and people within the ecosystem often use the term much more broadly to describe and dismiss any criticism or tough questions about their projects.
gas: gas fees are the transaction fees required to perform any transaction on the Ethereum blockchain: minting, buying an NFT, etc. (Wikipedia)
gm: an abbreviation for "good morning" that has become signature crypto slang (NFT ska)
governance token: tokens that represent a person's stake in the governance of a project, usually granting them voting powers
hardware wallet: a type of cold wallet (non-Internet-connected wallet) where cryptocurrency is stored on a physical device much like a flash drive (but often with additional features)
hashrate: the total combined computational power that is being used to mine and process transactions on a proof-of-work blockchain. Hashrate refers to the number of hashes that can be calculated per second, and the total hashrate of the network is typically measured in exahashes per second (EH/s). (CoinDesk)
hodl: a misspelling of "hold" that has also been said to be an acronym representing "hold on for dear life". It is used among cryptocurrency users to refer to holding on to their crypto assets, sometimes beyond reason (Investopedia)
hot wallet: a cryptocurrency wallet that is connected to the Internet, which allows the currency to be quickly accessed for trading and spending
ICO / initial coin offering: a crypto industry equivalent to an initial public offering (IPO). In an ICO, a quantity of cryptocurrency is sold to speculators or investors in exchange for legal tender or other (generally established and more stable) cryptocurrencies such as Bitcoin or Ether. The tokens are promoted as future functional units of currency if or when the ICO's funding goal is met and the project successfully launches. (Wikipedia)
impairment charge: an accounting term used to describe a drastic reduction or loss in the recoverable value of an asset (Investopedia)
KYC / know your customer / know your client: procedures to verify the identity of a customer or client in a business relationship. Within the cryptocurrency space, this typically means verifying the real-life identity of a person behind a cryptocurrency wallet, or the identities of people running a project. (Wikipedia)
layer 2 / L2: a protocol built on top of an existing blockchain network, usually with the intention of increasing transaction speeds and/or scalability (Binance)
liquidity pool: funds locked in a smart contract, which facilitate trading and lending in a given exchange (Binance)
long: investing in a way to earn a profit if the value of an asset rises—essentially, betting that the price of an assets will go up (Wikipedia)
market capitalization: the total (ostensible) value of all tokens for a given cryptocurrency. These values should be taken with a hefty grain of salt, as they are considerably larger than the total value that could be realized if holders of a currency decided to try to cash out.
maximal extractable value / miner extractable value / MEV: profits made by miners and validators by manipulating how they structure blocks, such as by including, excluding, or reordering transactions (CoinDesk)
memecoin / shitcoin: cryptocurrency that originated from an Internet meme or has some other humorous characteristic. Examples include Dogecoin, Shiba Inu, and other dog-themed coins. (Wikipedia)
metaverse: a marketing buzzword largely used to refer to technologies that already exist, such as massively multiplayer online worlds and virtual or extended reality. Metaverse projects sometimes, but not always, seek to incorporate cryptocurrencies and NFTs for in-game trading and "ownership" of purchasable items including avatar clothing and plots of "land"
mining / validating: cryptocurrency mining is the process of validating blockchain transactions, and obtaining new cryptocurrency as a reward (Wikipedia)
mining pool: the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block (Wikipedia)
minting: the process of creating new tokens on a blockchain. This often refers to users creating NFTs, but also refers to the addition of other tokens, such as increasing the quantity of a cryptocurrency in circulation
multi-signature wallet ("multisig"): a type of crypto wallet that requires two or more private keys to perform certain tasks (CoinDesk)
NFT / non-fungible token: a non-interchangeable unit of data stored on a blockchain that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. (Wikipedia)
ngmi / not going [to] make it: slang to suggest that a person or group will not be successful in crypto due to a bad decision or poor judgment (NTFska)
oracle: third-party service that connects smart contracts with the outside world, primarily to provide data to the chain about off-chain information (Wikipedia)
oracle manipulation attack: by manipulating the source of data about an external asset that's feeding in to a smart contract, an attacker can force unexpected behavior from a project. For example, if someone can manipulate an oracle providing the price of an asset to appear very low, they can "trick" the contract into providing them an oversized number of shares of that asset in a swap. (Consensys)
oracle problem: the surprisingly complex issue of ensuring accurate data is entered into a system built on a blockchain, and therefore that the data can be trusted not only to be unchanged after it is recorded, but to be accurate to begin with (Chainlink blog)
orange pill: a reference to the Matrix's red and blue pills, "taking the orange pill" is a metaphor for seeing the "truth" that Bitcoin (represented by an orange ₿) is the way of the future
peg: specified price for the rate of exchange between two assets. In the case of stablecoins, coins are often pegged to fiat currencies—for example, one Tether is pegged to one U.S. dollar. (CoinMarketCap)
permit phishing: an attack in which the perpetrators convince their victims to sign malicious crypto transactions that use the "permit" functionality, which then allows the attackers to siphon funds from the associated crypto wallets (SlowMist)
phishing: a type of social engineering where an attacker sends a fraudulent message designed to appear to be from a legitimate source, such as a trusted company like a bank. Phishing is intended trick a victim into actions including revealing sensitive information, authorizing transactions, or installing malicious software (Wikipedia)
pig butchering / shāzhūpán: a type of scam in which scammers strike up a friendship or romance with the victim before convincing them to put money into their scheme. The scam is called "pig butchering", or shāzhūpán, because the scammers "fatten up" their victims by earning their trust, before "butchering" them (taking their money). (ProPublica)
play-to-earn / P2E: a game mechanic in which players are rewarded with cryptocurrency tokens or other blockchain-based items (Protocol)
Ponzi scheme: a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own. (Wikipedia)
privacycoin: cryptocurrencies that preserve anonymity by obscuring the flow of money across their networks, making it difficult to work out who sent what to whom (CoinDesk)
private key: a generated passphrase that grants access to assets including cryptocurrencies and NFTs. A compromised private key allows an attacker to steal all assets belonging to the person or group with that private key.
proof of stake: a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. Examples of proof-of-stake blockchains include Avalanche, Ethereum, and Solana. (Wikipedia)
proof of work: a class of consensus mechanisms for blockchains in which one party (the prover) proves to others (the verifiers) that a certain amount of a specific computational effort has been expended. Examples of proof-of-work blockchains include Bitcoin and Monero. (Wikipedia)
pumping (and dumping): pumping (and then dumping) involves artificially inflating the price of a token or project with false or misleading information, allowing those behind it or who got in early to then "dump" the coin—that is, cash out before the price tanks
real world assets / RWAs: "real world assets" in crypto are tokens that correspond to tangible items that exist off-chain, such as luxury items, real estate, or even traditional financial assets
re-entrancy attack: a re-entrancy attack repeatedly withdraws funds from a smart contract and transfers them to an unauthorized contract until the funds have been exhausted (Alchemy))
remittance: a transfer of money from someone working abroad, back to family in their home country to provide household income (Wikipedia)
remote procedure call gateway / RPC gateway: remote procedure call (RPC) interfaces allow web clients and other systems to communicate with blockchain nodes
right-clicker: a pejorative term for people who are skeptical of or otherwise don't "get" NFTs. It refers to the fairly common point by NFT skeptics, that someone seeking to obtain the artwork purchased by an NFT holder could simply right-click and save the file to their computer.
rug pull: when a development team suddenly abandons a project and takes all the money (Binance)
safu: a crypto meme in which the word "safu" is used instead of "safe". For example, "all funds are safu".
sats / Satoshis: a "sat" is the smallest unit of Bitcoin that can be used in a transaction on the Bitcoin blockchain, and is equivalent to 0.00000001 BTC. Named for Satoshi Nakamoto, Bitcoin's pseudonymous creator, the unit is often used when discussing small monetary amounts to avoid possible confusion introduced by many leading 0s. The phrase "stacking sats" has also become common slang used to refer to accumulating Bitcoin.
seed phrase: a secret series of words that function as a password to a cryptocurrency wallet, giving access to the currency or other assets associated with that wallet (Coinbase)
short: investing in a way to earn a profit if the value of an asset falls—essentially, betting that the price of an assets will go down (Wikipedia)
sidechain: a blockchain that runs alongside a main chain, and is connected via a bridge. They often are used to perform transactions off the main chain to help with scalability and speed issues. (Ethereum.org)
signing: in crypto, "signing" a transaction or a message means verifying cryptographically that you are the operator of a cryptocurrency wallet sending that transaction or message
slippage: the difference between price when a trade is entered and the price when the trade is executed (Coinbase)
smart contract: a computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement (Wikipedia)
spot market: the market for crypto assets where the asset is traded for immediate delivery. Spot contracts are contrasted with futures contracts, which are based on the asset being delivered at a designated point in the future. "Spot price" refers to the current price of an asset on a spot exchange. (Investopedia)
stablecoin: cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (Wikipedia)
staking: a strategy to earn rewards on cryptocurrency or other assets by locking up the assets in a way that supports the blockchain network (The Motley Fool)
Sybil attack: an attack or exploitation of a computer system in which a person creates many pseudonymous identities to gain disproportionate control or influence in the system (Wikipedia)
tax loss harvesting: the practice of selling investments that have not performed well, using the loss to offset taxes on gains in other investments
token swap / token migration / token fork: a process in which a project migrates from using one token to using a new one. There are several reasons a project might do this, including to restore a snapshot of a project from before when a hack occurred, to try to restore users' original holdings and to drop the value of the stolen tokens to 0.
total value locked / TVL: the overall estimated value* of crypto assets deposited in a decentralized finance (DeFi) protocol (CoinDesk)
transaction: a transaction is an operation published to the blockchain that often — but not always — involves transferring cryptocurrency assets
tumbler / mixer: a cryptocurrency tumbler (or cryptocurrency mixing service) is a service offered to mix potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source (Wikipedia)
wallet: a place where the keys to access one's cryptocurrency and other holdings (such as NFTs) are stored. These are sometimes physical devices similar to flash drives, or they can also be software-based.
wallet drainer: wallet drainers are scam-as-a-service organizations that sell their fraudulent services to clients who want to operate scams. Usually taking payment as a percentage of the funds successfully stolen by a client using their software, these services create phishing websites and deploy malicious contracts to facilitate thefts.
wash trading: the process of selling an asset between two wallets secretly owned by the same person (or by two people working together). This is often done to artificially inflate the price of an asset by making it appear to be in demand, and is also sometimes done to obtain rewards for transactions offered by some platforms. It's also done by some platforms and services to make the service look more popular than it actually is. (Fortune)
web3 / web 3.0: an idea for a new iteration of the World Wide Web based on the blockchain, which incorporates concepts including decentralization and token-based economics (Wikipedia)
whale: a person who has invested a large amount into cryptocurrencies or other blockchain-based assets. The term is also used to refer to a person who holds a large proportion of assets within a given project.
whitehat: a security researcher who operates ethically to identify vulnerabilities and report them to the project. In crypto, whitehats are known to execute known exploits on projects that are actively being exploited in order to safeguard the funds until they can be returned to a secure address belonging to the project operators.
wrapped token: a wrapped token (often denoted with a lowercase "w" before the token abbreviation, like wETH for wrapped Ethereum) is a token that is pegged to the value of the original currency, and able to be used on other blockchains. (Binance)
yield aggregator: projects that aggregate multiple yield farms under one project, aiming to maximize yield by drawing from several sources (CoinGecko)
yield farming: lending or staking cryptocurrency in exchange for interest and other rewards