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WEB3 LINGO

Web3 Dictionary

 
Disclaimer: This is an evolving dictionary and more words will be added to it as and when additional articles are published.

Airdrops

A marketing technique that involves unsolicited transferring of crypto or NFTs to wallet addresses.

Aggregator

A company or organization that collects information about different businesses from a variety of sources and puts them together in one place.

Annual Percentage Yield (APY)

APY accounts for compound interest gained over and beyond your initial investment.

Artificial intelligence (AI)

The technology by which machines are programmed to think, process, and perform certain actions like humans.

Assets

Digital representation of value that can be stored, traded, transferred.

Back-end Code

Parts of a code or application allowing it to function wherein access isn’t given to users.

Block

Continuously expanding list of ordered records, linked using cryptography.

Block Reward

The amount of crypto you receive for successfully mining a block of that cryptocurrency.

Blockchain Technology

A structure that stores transactional records of users in multiple archives.

Bot

A network-based autonomous program that can communicate with other users or systems.

Borrowing

Borrowing is the process of availing a loan by using your cryptocurrency holdings as collateral.

Chain

A chain is a substructure built upon an existing blockchain to aid transactions.

Codebase

A collection of source codes required to build any application or software systems.

Coding Statements

A syntactic component of programming language that dictates a specific task to be carried out.

Coin

A type of digital currency that is usually connected to its own blockchain.

Computational Puzzles

A moderately hard mathematical puzzle, the answer to which can be arrived at in a reasonable amount of time.

Cold wallet

A physical device that stores your cryptocurrency offline.

Conviction voting

Conviction voting relies on the collective preferences of the community and utilises time as a resource. The more time members spend keeping their vote the same, the more influence their vote has on various ideas that are now being considered.

Cryptocurrency

A digital currency that is independent of a central authority like banks and government and acts as a medium of exchange.

Cryptography

A method used to guard transactions between two nodes on a blockchain network.

Databases

A framework of data stored on a computer system that is accessible through multiple ways.

Data String

A series of characters used in computer programming, which can include letters, digits, punctuations and special characters.

Dark DAOs

Dark DAOs are decentralized organizations that secretly purchase on-chain votes.

Decentralized Apps

Online applications that run on a blockchain through smart contracts, outside the reach of a single authority.

Decrypt

To make visible a certain piece of data or information by decoding it.

Digital Vaults

An online platform that collects and maintains digital assets in a secured way.

Domain

Addresses on the internet either sharing a common suffix or an organization.

Encrypt

Concealing data or information by transforming it into a code.

Impermanent loss

Impermanent loss occurs when the price of the tokens in a liquidity pool changes, causing the value of the tokens held by liquidity providers to shift.

Incentivized liquidity

It refers to the process of incentivizing users to provide liquidity to a deFi protocol by offering them rewards through tokens or other incentives.

Fiat Currency

A form of currency that is legally issued by the government.

Flash loan

Flash loans are uncollateralized loans with no borrowing restrictions in which a user borrows money and returns it in one transaction.

Forked

Forks, in the context of blockchains, are technical occurrences that take place when a blockchain divides into two distinct branches.

Gas Fees

A transaction fee for the blockchain that is applicable on every transaction. It is given to the network validators in exchange for the service of validation.

Governance token

A governance token is a cryptocurrency that lets its users vote on the administration of a blockchain project.

Hash

An algorithm that transforms any given amount of input to a fixed amount of output by the way of computation.

Hot Wallet

A digital wallet to store your digital assets such as, crypto and NFTs, that can be accessed online.

Initial Coin Offerings

An uncontrolled method of raising money for cryptocurrency ventures.

L1 blockchain

‘L1 (layer 1) blockchains’ are primary blockchain systems within their ecosystem.

L2 blockchain

A ‘L2 (layer 2) blockchain’ network enhances the scalability and efficiency of a blockchain protocol by operating on top of it.

Lazy minting

When an NFT is accessible off-chain and only becomes minted after a sale occurs, it’s called lazy minting.

Lending

The process of depositing cryptocurrency to be lent to borrowers in exchange for recurrent interest payments is known as lending.

Lending protocol

A 'lending protocol' is a decentralized platform that allows users to borrow and lend cryptocurrency, evading the need for a centralized authority.

Mainnet

A term used to describe a fully functional, operational blockchain network.

Metadata

The kind of data that provides information about other data without actually revealing its contents.

Mine

A process of computational work handled by the nodes in the network; primarily used to secure transactions.

Mining

A process whereby special networks are used to generate new cryptocurrencies and also verify transactions.

Minting

The process of publishing a unique digital asset (like an NFT) on a blockchain that can then be bought or sold.

Multi-sig wallets

Digital wallets that require multiple signatures to authorize a transaction.

Native Token

Online applications that run on a blockchain through smart contracts, outside the reach of a single authority.

Non-fungible tokens (NFTs)

Non-fungible tokens (NFTs) are cryptographic assets on a blockchain that can be distinguished from one another by their distinctive identifying codes and data.

NFT project

An NFT project is a distinctive collection of NFTs (non-fungible tokens) produced on a large scale.

NFT roadmap

An NFT Roadmap is a document that outlines the objectives and tactics of an NFT project you're considering to convey its long-term worth.

Nodes

Stakeholders on a blockchain network whose devices are licensed to authorize transactions and keep the network secure.

Non-custodial wallets

Wallets which give you complete authority over your private keys.

Non-fungible Tokens

A record on the blockchain for a particular digital or non-digital asset.

Open Account Trading

A kind of trading where commodities/services are promised and delivered before the payment is done for the same.

Open Source

A method of storing documentation on the blockchain network in an entirely transparent way.

Oracles

Oracles are independent structures that link smart contracts on blockchain networks to external systems of the real world.

Peer-to-peer Network

A network of linked computers that share the same powers and responsibilities for data processing.

Private Key

A secure code that allows a user to make cryptocurrency transactions and validate ownership of their holdings.

Proof of stake

A mechanism to process crypto transactions and create new blocks in any blockchain.

Public Key

A public key is a set of characters that represent your wallet/account, enabling you to receive transactions.

Quadratic voting

In a process known as quadratic voting, users assign votes to indicate the degree of their preferences rather than merely their direction.

Reputations

The digital portrayal of an entity’s status on a particular domain.

Rollups

Rollups are layer 2 scaling techniques that carry out transaction processes away from the primary blockchain network while still posting the transaction data onto layer 1.

Rug pulls

Rug pulls are dishonest strategies used by developers to abandon a venture and abscond with investor money.

Seed phrase

A series of words created by your cryptocurrency wallet that lets you access the crypto linked to that wallet.

Self-custodial wallets

Wallets where a third party stores your private keys.

Shadow voting

In the process of shadow voting, by borrowing a governance token to vote with and then returning it to the lender, a token holder without an economic stake in the protocol casts a shadow vote, weakening the DAOs.

Sharding

A process of breaking down data from a blockchain network into smaller bits called 'shards' to improve scalability and throughput.

Sidechain

A sidechain is a different blockchain network linked to a parent blockchain by a two-way peg.

Smart contract

A program stored on a blockchain, used for the execution of an agreement in a decentralized manner.

Slippage

Slippage is the difference between the predicted and actual exchange rates.

Smart contract wallet

A crypto wallet managed by a smart contract.

Snapshot

Snapshot is a type of off-chain voting system created for DAOs that are built on multiple blockchain platforms.

Social Recovery Wallets

Social recovery wallets are smart contract- integrated wallets that provide users access to their stolen assets even if they misplace their keys.

Social Engineering

The use of fraudulent activities to persuade someone to reveal private or sensitive information that could be misused maliciously.

Stablecoins

Cryptocurrencies in which the value of the cryptocurrency is pegged, or tied to that of another currency or financial meter.

Staking

Staking is a method by which cryptocurrency owners voluntarily participate in validating transactions on the blockchain.

Timestamps

Digital evidence of the time of occurrence of a particular event.

Tokens

Digital assets built on particular blockchains.

Token gating

A verification method through which access is provided to spaces, events, etc. to people possessing particular assets in their wallets.

Throughput

The volume of material moving via a system or process.

Two-way peg

A two-way peg is a mechanism that allows the transfer of digital assets back and forth, between the mainnet and the sidechain.

Validators

Computer systems are devoted to sustaining a blockchain’s integrity.

Unified Payments Interface (UPI)

A system that powers multiple banking accounts and merges banking features to be made available at one place.

Tokenization

Process of transforming sensitive data into non-sensitive data in the form of tokens.

Wallet

A wallet permits users to store and manage their cryptocurrencies.

White Paper

An informational document presented by an organization/ institution, highlighting the features of a solution, product, or service that it plans to provide.

Yield aggregators

Yield aggregators are platforms or protocols that allow investors to automatically find and invest in the best yield opportunities across multiple deFi platforms.

Yield farming

Yield farming is depositing your cryptocurrencies into a pool with other users to gain incentives or interest.
 
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