Stablecoin & crypto terms

A cryptographic identifier (typically a string of letters and numbers) used to send, receive, and store cryptocurrency on a blockchain. Public addresses are visible to all; private keys controlling them must stay secret.

A distribution of tokens to existing wallet holders, often used to bootstrap a new protocol, reward early users, or signal community membership. Eligibility usually depends on past on-chain activity.

A stablecoin that maintains its peg through automated supply mechanisms (mint/burn, rebasing, or seignorage) rather than holding 1:1 reserves. Historically risky; the 2022 Terra UST collapse remains the cautionary tale.

Any cryptocurrency other than Bitcoin. The term spans tens of thousands of assets across categories from layer-1 protocols to memecoins.

The highest price a cryptocurrency has ever traded at, denominated in USD or another reference currency. ATL is the equivalent low.

A third-party report — typically from a major accounting firm — confirming that a stablecoin issuer’s published reserves match what they claim. Less rigorous than a full audit but more rigorous than self-reporting.

A formal review of smart contract code or financial reserves by a specialised firm. Audited code has fewer (but never zero) exploitable bugs; audited reserves have higher trust in their peg backing.

A batch of transactions added to a blockchain at regular intervals. Blocks are cryptographically linked to each other, forming the “chain.”

A distributed, append-only ledger maintained by many independent computers (nodes). Each new block of data is cryptographically linked to the previous one, making the history tamper-evident.

Software that lets users move assets between two different blockchains. Bridges carry concentrated risk — they are historically the most attacked piece of crypto infrastructure (Wormhole, Ronin, Nomad incidents).

The permanent removal of tokens from circulation by sending them to an address with no known private key. Often used to reduce supply, control inflation, or honour a tokenomics rule (e.g. Ethereum’s EIP-1559 base-fee burn).

Central Bank Digital Currency — a digital form of a national fiat currency issued directly by a central bank. Distinct from privately issued stablecoins; ~130 countries are in some stage of CBDC research or pilot.

A trading venue operated by a single company (Binance, Coinbase, Kraken). Users deposit funds into the exchange’s custody to trade. Convenient but introduces counterparty risk.

Storing cryptocurrency private keys on a device that has never connected to the internet (hardware wallet, paper, air-gapped computer). Highest security; lowest convenience.

An asset locked in a smart contract to back a loan or stablecoin issuance. If the borrower can’t repay or the collateral’s value drops too far, it’s liquidated.

The rule set a blockchain uses to agree on the order of transactions. Bitcoin uses Proof of Work (mining); Ethereum, Solana, Cardano and most newer chains use Proof of Stake (staking).

Holding and securing cryptocurrency on someone’s behalf. Self-custody = you hold the keys; third-party custody = an exchange, broker, or bank holds them for you. Each has different risk profiles.

Financial services — lending, trading, derivatives, insurance — built entirely on smart contracts, with no central operator. Open access, but no recourse if something goes wrong.

A trading venue running entirely on smart contracts (Uniswap, Curve, dYdX). Users never give up custody. Slippage and gas fees are common downsides versus CEX trading.

The percentage of total crypto market capitalisation held by a single asset. BTC dominance — typically reported — sits in the 40-60% range and reflects how much capital is in Bitcoin versus everything else.

Ethereum Improvement Proposal — the formal process by which changes to Ethereum’s protocol are proposed, debated, and adopted. EIP-1559, EIP-4844 are well-known examples.

The Ethereum token standard for fungible tokens (one unit is interchangeable with another). USDC, USDT, LINK and most ICO tokens follow this standard.

The Ethereum standard for non-fungible tokens (NFTs) — each token is unique. Used for digital art, collectibles, gaming items, and tokenised real-world assets.

Government-issued currency (USD, EUR, GBP, JPY) not backed by a physical commodity. Crypto uses “fiat” to distinguish from on-chain assets; “fiat-on-ramp” means converting traditional money into crypto.

A change in a blockchain’s rules. Soft forks are backwards-compatible upgrades; hard forks create a separate chain (Ethereum/Ethereum Classic, Bitcoin/Bitcoin Cash).

The fee paid to have a transaction processed on a blockchain. On Ethereum, gas is denominated in gwei (a billionth of an ether); high network demand pushes gas prices up.

An event coded into Bitcoin (and a few similar chains) that cuts the block reward miners receive by 50%, roughly every four years. Historically associated with price expansions in the year following.

The total computational power securing a Proof-of-Work blockchain. Measured in hashes per second; Bitcoin’s hash rate currently sits in the exahash (EH/s) range, the highest in any decentralised network.

Originally a 2013 typo of “hold” on a Bitcoin forum, now an investing philosophy: buy and hold through volatility rather than attempting to time short-term moves. Sometimes back-explained as “Hold On for Dear Life.”

Initial Coin Offering — a token sale event used by early Ethereum-era projects to raise capital. Largely replaced by IDOs, airdrops, and regulated security token offerings post-2018.

A base-layer blockchain that doesn’t rely on another for security: Bitcoin, Ethereum, Solana, Cardano. Layer 1s compete on throughput, decentralisation, and security tradeoffs.

A protocol built on top of a Layer 1 to inherit its security while delivering faster or cheaper transactions. Examples include Arbitrum and Optimism on Ethereum, Lightning on Bitcoin.

The forced sale of a borrower’s collateral when its value falls below a required ratio. Liquidations cascade in volatile markets; tracking them is a key data point on Coinglass and similar dashboards.

A smart contract holding pairs of tokens used by automated market makers (Uniswap, Curve) to enable trading. Anyone can provide liquidity and earn a share of trading fees.

Current price × circulating supply. The primary ranking metric in crypto, but a poor measure of true value when significant supply is locked or illiquid.

A cryptocurrency whose value derives from cultural moment and community rather than technical innovation or revenue. Dogecoin and Shiba Inu are the canonical examples; high volatility is the norm.

The Proof-of-Work process of running specialised hardware to solve cryptographic puzzles, securing the network and earning newly issued coins as a reward. Bitcoin mining is now industrial-scale.

Creating new tokens. For NFTs, “mint” is the act of buying directly from the contract at issuance. For stablecoins, mint means deposit collateral → receive new tokens.

A unique token on a blockchain. Each NFT is distinct from every other and has provable scarcity. Use cases extend beyond digital art to gaming items, identity, and tokenised assets.

A computer running blockchain software. Full nodes validate every transaction; light nodes verify only relevant parts. More nodes = a more decentralised, censorship-resistant network.

A service that brings off-chain data on-chain so smart contracts can react to real-world events (asset prices, weather, sports scores). Chainlink is the largest oracle network.

A stablecoin’s target value — typically 1 USD. “Depegging” means trading meaningfully off the target (e.g. USDC briefly trading at $0.87 in March 2023 due to Silicon Valley Bank exposure).

The secret cryptographic value that proves ownership of an address and authorises spending. Losing or leaking a private key means losing control of every coin associated with it.

A consensus mechanism where validators lock up (“stake”) tokens for the right to confirm transactions and earn rewards. Lower energy footprint than Proof of Work; used by Ethereum, Solana, Cardano, and most newer chains.

The original consensus mechanism where miners compete to solve cryptographic puzzles. High energy use but proven security; Bitcoin remains the dominant Proof-of-Work chain.

The software rules a blockchain or decentralised application runs by. “The Ethereum protocol” or “the Aave protocol” — both are bodies of code anyone can interact with.

The assets backing a stablecoin. Tether, USDC, and PayPal USD each publish breakdowns: typically T-bills, cash, repo agreements, and sometimes Bitcoin. Composition and audit rigour vary widely.

Re-using staked ETH or other staked assets to secure additional protocols, earning multiple rewards but compounding slashing risk. EigenLayer popularised the concept on Ethereum.

Off-chain assets — Treasury bills, real estate, gold, private credit — represented as tokens on a blockchain. The fastest-growing crypto category in 2024-2026; major issuers include Ondo, Maple, BlackRock’s BUIDL.

A list of 12 or 24 plain English words that can fully restore a crypto wallet. Anyone with the seed phrase has total control of the wallet’s contents; treat it like a master key.

The difference between the price you expected on a trade and the price you actually got. Larger on thin order books or in DEX trades against shallow liquidity pools.

Code that runs on a blockchain and executes automatically when conditions are met. Underpins DeFi, NFTs, and most non-Bitcoin crypto activity.

A cryptocurrency designed to maintain a stable value, typically pegged 1:1 to a fiat currency (USD, EUR). The largest by market cap are USDT, USDC, and DAI.

Locking tokens to help secure a Proof-of-Stake network in exchange for rewards. Annualised yields range from 1% to 20%+ depending on the chain and lockup terms.

Circulating supply = tokens actually trading. Total supply = all tokens minted so far. Max supply = the protocol-defined upper limit (if any). Bitcoin’s max supply is 21M; many altcoins have no cap.

The dollar value of all assets locked inside a DeFi protocol’s smart contracts. A primary growth metric for DeFi; DefiLlama publishes industry-wide TVL data.

A unit of value on a blockchain. Native tokens (BTC, ETH, SOL) are essential to the chain itself; non-native tokens (USDC, UNI, LINK) are issued via smart contracts on top of a host chain.

Representing a real-world asset — a treasury bill, a share, a piece of property — as a token on a blockchain. The intersection of crypto rails and traditional finance.

The Proof-of-Stake equivalent of a miner. Validators stake tokens, propose and verify blocks, and earn rewards. They can be slashed (penalised) for misbehaviour.

Software (or hardware) that stores private keys and lets users sign transactions. Hot wallets are internet-connected (MetaMask, Phantom); cold wallets are not (Ledger, Trezor).

The founding document of a crypto project, outlining its purpose, design, and tokenomics. Bitcoin’s 2008 whitepaper by Satoshi Nakamoto remains the most-cited.

The interest or rewards earned by deploying capital into a crypto product — staking, lending, liquidity provisioning. Higher yields almost always come with higher risk.

Moving capital between DeFi protocols to maximise yield, often using leverage. Profitable in bull markets, prone to smart contract risk and impermanent loss in volatile periods.

A Layer-2 scaling technique using zero-knowledge proofs to compress many transactions into one validity proof posted to the base chain. zkSync, Starknet, and Scroll are leading examples.