Airdrop

Free distribution of tokens to wallet addresses as reward for early adoption, holding assets, or completing on-chain tasks.

Altcoin

Any cryptocurrency other than Bitcoin. Includes Ethereum, Solana, XRP, and thousands of other digital assets.

AMM

Automated Market Maker — DEX protocol using math formulas to price assets instead of an order book. Uniswap is the most popular AMM.

Bear Market

Prolonged period of declining prices, typically 20%+ drop from highs. Accompanied by negative sentiment and reduced volume.

Block

Unit of data recording a set of transactions on a blockchain. Each block cryptographically links to the previous one.

Blockchain

Distributed ledger where data is stored in linked blocks maintained across a network of computers with no central authority.

Bridge

Protocol for moving assets between different blockchain networks. E.g. bridging ETH from Ethereum mainnet to Arbitrum L2.

Bull Market

Sustained price increase and positive sentiment. Generally 20%+ rise from recent lows with widespread buying.

CEX

Centralized Exchange — crypto trading platform operated by a company (Binance, Coinbase). Requires KYC, holds custody.

Cold Wallet

Crypto wallet storing private keys offline. Maximum security against hacking. Examples: Ledger, Trezor hardware wallets.

DAO

Decentralized Autonomous Organization — governed by smart contracts and token holders voting with no central leadership.

DApp

Decentralized Application — software built on blockchain running autonomously via smart contracts without central servers.

DeFi

Decentralized Finance — financial services on blockchain without intermediaries. Includes lending, trading, yield farming.

DEX

Decentralized Exchange — peer-to-peer trading with no central operator. Users trade directly from wallets. E.g. Uniswap.

DYOR

Do Your Own Research — reminder to independently verify information before making any financial or investment decisions.

ETF

Exchange-Traded Fund — financial product tracking an asset. Bitcoin spot ETFs let traditional investors gain BTC exposure.

Fiat

Government-issued currency not backed by a commodity (USD, EUR). Baseline for measuring crypto prices and market caps.

FUD

Fear, Uncertainty, Doubt — negative or misleading info spread to cause panic selling. Often unfounded bearish narratives.

Gas Fee

Cost to execute a transaction or smart contract, paid in native token (ETH on Ethereum, SOL on Solana).

Halving

Bitcoin event cutting block mining reward in half every ~4 years, reducing new BTC supply entering circulation.

Hard Fork

Permanent protocol change creating a separate blockchain. Famous: Bitcoin Cash from Bitcoin, Ethereum Classic from ETH.

Hot Wallet

Crypto wallet connected to the internet. Convenient but less secure. Examples: MetaMask, Trust Wallet, exchange wallets.

ICO

Initial Coin Offering — fundraising method selling new tokens to early investors. Similar to IPO but less regulated.

Impermanent Loss

Temporary loss for AMM liquidity providers when price ratio of deposited tokens changes after deposit.

KYC

Know Your Customer — identity verification required by centralized exchanges to comply with anti-money laundering regulations.

L1

Layer 1 — base blockchain protocol (Bitcoin, Ethereum, Solana). All other layers are built on top of L1 infrastructure.

L2

Layer 2 — secondary protocol on L1 for scalability and lower fees. Examples: Arbitrum, Optimism, ZKsync, Polygon.

Liquidity

Ease with which an asset can be bought or sold without significantly affecting its price. High liquidity = narrow spreads.

Mempool

Memory Pool — waiting area for unconfirmed transactions before validators include them in a block.

MEV

Maximal Extractable Value — profit validators extract by reordering, inserting, or censoring transactions in blocks.

Metaverse

Virtual shared space combining physical and digital reality. In crypto: blockchain-based worlds like Decentraland.

NFT

Non-Fungible Token — unique digital asset representing ownership of specific item, artwork, collectible on the blockchain.

Node

Computer participating in a blockchain network by storing the ledger and validating transactions per consensus rules.

On-Chain

Activity that occurs directly on the blockchain and is permanently recorded. Opposite of off-chain activity.

Oracle

Service providing real-world data to smart contracts. Chainlink is the most popular oracle network for DeFi protocols.

P2P

Peer-to-Peer — direct transactions between participants without intermediary. Fundamental design of Bitcoin.

Private Key

Secret cryptographic key proving ownership of crypto. Used to sign transactions. Never share your private key.

Proof of Stake

Consensus where validators create blocks based on staked crypto as collateral. Used by Ethereum post-Merge.

Proof of Work

Consensus where miners solve math puzzles to validate transactions. Used by Bitcoin. Energy-intensive but secure.

Public Key

Address derived from private key for receiving crypto. Safe to share — like a bank account number.

RWA

Real-World Assets — tokenized traditional assets (real estate, bonds, commodities) brought onto blockchain.

Seed Phrase

12 or 24-word recovery phrase backing a crypto wallet. Anyone with your seed phrase controls your funds.

Slippage

Difference between expected and actual trade price. Higher for large trades in low-liquidity markets.

Smart Contract

Self-executing code on blockchain enforcing agreement terms automatically when conditions are met.

Stablecoin

Cryptocurrency pegged to stable asset (usually USD). Examples: USDT, USDC, DAI. Avoids volatility.

Staking

Locking crypto to support Proof of Stake network operations in exchange for rewards.

Token

Digital asset created on top of existing blockchain, relying on its infrastructure for operation.

TVL

Total Value Locked — total USD value deposited in a DeFi protocol. Key metric for protocol size.

Vesting

Schedule gradually releasing tokens to team, investors over time, preventing immediate sell pressure.

Wallet

Software or hardware storing private keys for sending, receiving and managing cryptocurrency assets.

Web3

Next internet evolution built on blockchain emphasizing decentralization and permissionless user ownership.

Whale

Large crypto holder able to significantly influence market prices through their buying or selling.

Whitepaper

Technical document describing a project's technology, tokenomics, team and roadmap. Essential pre-investment reading.

Yield Farming

Providing liquidity or staking in DeFi protocols to earn rewards, often in the protocol's native token.

Zero-Knowledge

Cryptographic method proving knowledge of info without revealing it. Key technology behind ZK-rollups.