100 Essential Web3 Terms and Concepts for Beginners

Navigating the Cryptocurrency Space: Essential Terms to Know

When engaging in the cryptocurrency community, it's vital to memorize these standard terms. I've curated 100 fundamental terms from A to Z.

1-10

• ATH — All-Time High;
• Aggregators — Aggregators; Explanation: Innovative decentralized token swapping platforms that integrate liquidity pools from various platforms to secure optimal trading prices for users.
• APY — Annual Percentage Yield: The effective annual return rate accounting for compound interest.
• Arbitrage — Arbitrage; Purchasing tokens on a lower-priced platform and selling them on a higher-priced one.
• APR — Annual Percentage Rate: The actual annual return rate excluding compound interest.
• AMM — Automated Market Makers: Algorithm-driven automated trading systems.
• AML — Anti-Money Laundering: Preventing the legitimization of illegally obtained funds.
• AMA — Ask Me Anything: A standard communication approach between project teams and users.
• BD — Business Development: 1. Managing partner communications and maintaining strong leader relationships; 2. Public relations, actively targeting user acquisition.
• Byzantine Generals Problem — As more participants record transactions, achieving network consensus becomes increasingly difficult.

11-20

• Impossible Trinity — Decentralization, Scalability, Security. No consensus mechanism achieves all three perfectly.
• Super Mario — Projects with high team control, causing dramatic price chart fluctuations.
• Genesis Block — The initial and earliest constructed block.
• Collateral — Assets pledged to secure debt repayment.
• CEX — Centralized Exchange: Users deposit digital assets to an exchange for centralized management.
• CEFI — Centralized Finance: Includes banks, financial institutions, exchanges, etc.
• veToken — Vote-Escrowed Token Model: Token holders lock tokens to gain protocol-specific rights like governance. Examples: CRV, BAL, YFI.
• Governance (Token Model) — Governance tokens grant voting rights in protocols. Voting power is calculated via token-weighted (proportional to holdings) or time-weighted (favoring longer locks). Examples: Curve, Compound, ENS.
• Token-Weighted Voting — Greater decision weight for holders with more governance tokens.
• Time-Weighted Voting — Enhanced rights for those locking governance tokens longer. Examples: UNI, COMP, ENS.

21-30

• Doxx — Disclosure; short for "documents," indicating non-anonymous projects. Undoxx means anonymous.
• DYOR — Do Your Own Research: A standard disclaimer.
• Floor Price — The minimum price for an NFT.
• DAO — Decentralized Autonomous Organization: Blockchain-based organizations running autonomously via smart contracts, without central control.
• DEX — Decentralized Exchange: Users retain full asset control within wallets or smart contracts.
• DEFI — Decentralized Finance.
• DAPP — Decentralized Application: Open-source software operating on decentralized networks.
• EVM — Ethereum Virtual Machine: A decentralized cloud server executing uploaded contracts automatically.
• ERC-1155 — An Ethereum NFT standard enabling limited-quantity and reusable NFT minting.
• ETF — Exchange-Traded Fund: Acquiring a Bitcoin ETF resembles buying a Bitcoin index.

31-40

• ERC-721 — An Ethereum NFT standard where each minted NFT is unique.
• ERC-20 — A token standard allowing developers to create custom tokens on Ethereum.
• FUD — Fear, Uncertainty, Doubt.
• Fair Launch — Equal participation opportunities during token issuance.
• GAS WAR — Elevated on-chain transaction fees due to project competition.
• HODL — Holding Bitcoin for three years defines a holder.
• Dutch Auction — An auction with decreasing prices.
• IMO — In My Opinion.
• ITO — Initial Twitter Offering: First-time token sales conducted on Twitter.
• IEO — Initial Exchange Offering: First-time sales of exchange tokens.

41-50

• IPFS — Decentralized Distributed Storage Protocol.
• IGO — Initial Game Offering: First sale of game assets.
• INO — Initial NFT Offering: First public NFT sale.
• IFO — Initial Fork Offering: First issuance of forked coins, created by splitting chains like Bitcoin or Ethereum under new rules.
• IDO — Initial Digital Assets Offering: Invitation-based token sales guaranteeing principal security via bounty tasks, rewarding users without direct fundraising.
• ICO — Initial Coin Offering: First token sale.
• Interaction — Using a launched project before token issuance.
• Machine Gun Pool — Vault strategies automatically shifting mining power among same-algorithm coins to maximize profits.
• KYC — Know Your Customer: Identity verification typically involving name, ID, and phone checks.
• Air Coin — Tokens lacking real value backing.

51-60

• Cross-Chain Bridge — Facilitates asset transfers between different blockchains.
• Open a Ticket — Typically refers to creating a dedicated Discord channel for support issues.
• Single-Sided Liquidity Pool — Single-token staking, often termed liquidity pool staking on DEXes; ideal for long-term investors and blue-chip tokens to minimize price drop risks.
• Limit Order — Order placed at the current price.
• Circulating Market Cap — Tradable tokens at a given time multiplied by price.
• Quantitative Trading — Replacing human decisions with advanced mathematical models.
• Meme Coin — Tokens triggering FOMO (fear of missing out).
• Fed Dove — Fed members favoring gentle foreign and military approaches.
• Pegging — Transaction actions based on the counterparty's moves.
• Fed Hawk — Individuals or groups upholding national interests through tough measures.

61-70

• Fed Rate Hike — Interest rate increases. Opposite: rate cut.
  1. For individuals: Encourages bank savings, reducing market money circulation.
  2. For companies: Higher loan interest rates deter borrowing.
• MOD — Moderator.
• NFA — Not Financial Advice.
• OTC — Over The Counter (off-exchange trading).
• PR — Public Relations: Startup team communication and promotion throughout financing.
• POS — Proof of Stake: Rewards based on token holdings.
• POW — Proof of Work: Consensus mechanism where more work yields greater rewards, e.g., GPU mining.
• Paper Hand — Sellers exiting too early, unable to hold.
• PND — Pump and Dump.
• Block Height — Number of blocks in the main chain; essentially total blockchain blocks.

71-80

• Liquidation — DeFi protocols allow collateral purchase when its value nears or falls below debt.
• Block Header — Contains header details like previous block hash (PreHash), current hash (Hash), timestamp, etc.
• Block Body — Stores detailed block data, including transactions or other records.
• Full Node Wallet — Bitcoin-core wallet syncing all blockchain data, using high storage for full decentralization.
• Cold Wallet — Crypto wallet offline and internet-disconnected.
• Public Key — Comparable to a bank card number.
• Private Key — Private key = bank card number + PIN. Never share. (Often complex strings, hence mnemonic phrases.)
• Mnemonic Phrase — Most crypto wallets manage private keys via mnemonic phrases.
• Hot Wallet — Private keys stored in network-accessible locations.
• Real Yield — DeFi protocols generating actual yields, not from token issuance.

81-90

• RWA — Risk-Weighted Asset: Bank asset categorization with risk coefficients for weighted asset calculation.
• Rug Pull — Exit scam.
• Rebase — Token supply adjustment.
• ROI — Return on Investment: Returns ratio. ROI = (Pre-tax profit / Total investment) × 100%.
• SFYL — Sorry For Your Loss: Sympathy for significant losses or missed opportunities.
• Double Spend — Malicious attempts to spend the same tokens with multiple recipients.
• Timestamp — Data proving existence before a specific point, verifiable.
• Slippage — Difference between expected and actual transaction prices.
• SocialFi — Social Finance.
• STO — Security Token Offering: Issuing tokenized securities.

91-100

• TPS — Transactions Per Second.
• To The Moon — Token price surging dramatically.
• Position — The first established trading position.
• Candy — Free tokens distributed during ICOs.
• Miss Out — Selling too early amid rising prices.
• Whale — Individuals or institutions holding large crypto/NFT amounts.
• WL — Whitelist.
• Impermanent Loss — Temporary loss from significant price fluctuations between staked tokens; potentially worse than not staking.
• Greed Index — Market sentiment scale 0-100, 100 being most greedy.
• Fear Index — Market sentiment scale 0-100, 0 being most fearful.

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