Dictionary

Web3 Project


0-9

  • 51% Attack

    When over half of the proof-of-work power is manipulated by a single entity, they can change the verified version of the blockchain. This can enable a bad actor to create false trades for cash and walk away before the false chain is realized and the correct chain is reestablished.

A

  • Airdrop

    The process of sending coins and NFTs to wallets to create awareness of a certain project or cryptocurrency.

  • Alpha

    The first phase or release of a particular software, product, cryptocurrency, or NFT.

  • Altcoin

    A term for cryptocurrencies outside of bitcoin (and sometimes also other than ethereum), such as solana, dogecoin, and many others.

  • Ape In

    Rapidly investing in a new cryptocurrency or NFT project without thoroughly vetting and researching the product. Usually caused by investor FOMO or hype generated surrounding the product.

B

  • Bear Market

    A trend of general price decline across an entire market of assets.

  • Bitcoin

    The original cryptocurrency/blockchain which functions as a type of digital currency where a record of transactions is kept and new units of currency are generated by computing the solutions to mathematical problems, operating independently of a central bank.

  • Block

    A grouping of transactions on a given blockchain that are verified together and then added to the chain, cementing them permanently as recorded and verified.

  • Blockchain

    A chain of transaction “Blocks” that have been verified according to the protocol of a given blockchain. Each blockchain is unique in how it issues coins, verifies transactions, and adds to the chain.

C

  • Centralized

    Anything that has a price or availability controlled by a central authority (or a small number of authorities). A common use of this term is when speaking about currencies, with most governments having centralized control.

  • Collateral

    An asset to secure a transaction or loan. If the loan defaults or the transaction is fraudulent, then the party at fault loses the collateral to the unpaid party.

  • Consensus

    The process used in blockchain technologies to verify that a certain transaction or block is correct and can be added to the chain. This is done through either proof-of-work or proof-of-stake consensus methods.

  • Cryptocurrency

    A currency used across a blockchain to add new transactions or blocks. These currencies are also sold and swapped independently on the open market.

D

  • Dapp

    A decentralized application that has its backend software running on a blockchain or using smart contracts. This eliminates the need to have the app on a centralized server where it can more easily be attacked and manipulated by 3rd parties.

  • Decentralized

    Anything that has a price or availability that is not controlled by a central authority, but that is entirely dictated by the demand within the market.

  • Decentralized Autonomous Organization (DAO)

    A DAO is an entity that has no centralized corporate structure and is controlled by the owners of that company’s coins or NFTs. The rules for voting and control are typically defined using a whitepaper that is tied to a blockchain to prevent fraudulent activity from occurring.

  • Decentralized Exchange (DEX)

    An exchange where users can buy and trade different cryptocurrencies and NFTs peer-to-peer.

  • Decentralized Finance (DeFi)

    Financial transactions and processes that operate outside of centralized financial systems like banks and governments.

  • Degen

    Short for degenerate and often used as a derogatory term for someone who makes risky or uninformed bets on crypto and NFTs without doing research or vetting.

  • Diamond Hands

    A slang term for someone who refuses to sell, even when the market appears to be crashing or entering a bear stage. These traders are normally advocates and espousers of “HODL,” or “Hold On for Dear Life.”

  • Dox

    Taking someone’s private information like their full name, birth date, address, phone number, or wallet address and posting it to a public forum or social media. This allows for large groups of anonymous people to easily identify and target that person.

  • Due Diligence

    The process of researching and vetting a potential investment based on the structure, value, and merits of the investment.

E

  • ERC-1155

    The new multi-token standard protocol being implemented on the Ethereum blockchain. This standard allows for multiple fungible and non-fungible tokens to be managed in a single transaction.

  • ERC-20

    The original and most basic protocol/coin on the Ethereum blockchain. This protocol focuses on smaller transactions and is most similar to the Bitcoin blockchain in its function and purpose.

  • ERC-721

    The NFT standard token on the Ethereum blockchain. This coin and protocol focus on the production and transfer of NFTs across the Ethereum blockchain.

  • Ethereum

    A blockchain designed as an alternative to the traditional Bitcoin blockchain. Bitcoin was designed as a store of value, whereas the Ethereum blockchain was designed for utility and provides functionality for people to create and manage complex offerings/Dapps.

F

  • Fear Of Missing Out (FOMO)

    FOMO is the anxiety that an exciting or interesting event may be happening that may be missed out on. Often used when describing desperate buy-ins with cryptocurrencies or VCs investing in startups just because a big name VC is also doing so.

  • Fear, Uncertainty, and Doubt (FUD)

    A catch-all term for different negative points of view regarding the value and risk associated with NFTs and cryptocurrencies. Usually associated with crypto-deniers and people who sell at the first sign of market instability/decline.

  • Fiat

    Any currency that is centralized, controlled, and given value by decree of a government.

  • Flippening

    The theoretical moment when Ethereum will become the most valuable cryptocurrency, overtaking Bitcoin as the gold–standard of cryptocurrencies.

  • Fork

    This occurs when a community on a certain blockchain creates a new or different version of the original blockchain’s protocol. This causes a new “Fork” to branch off of the original, where transactions are verified and executed according to the new agreed-upon protocol.

  • Fractionalize

    The process of creating smaller portions of a whole asset by creating and selling NFTs. An example would be creating 100 NFTs that each own 1% of a piece of art, or a piece of another NFT.

G

  • Gas Fees

    The amount of “work” (or cryptocurrency expense) associated with adding a block or transaction to a particular blockchain. Different blockchains have varying gas fees, and can be a major factor when DAOs and Dapps choose which blockchain to use for their efforts.

H

  • Hash Rate

    The rate at which a computer can generate guesses to a cryptographic puzzle. Can also be used to reference the total power used by a given network on a proof-of-work blockchain.

  • Hashing

    The act of a function converting an input of letters and numbers into an encrypted output of a given length.

  • Hold On For Dear Life (HODL)

    A common acronym used across media platforms (as a mantra of sorts) by crypto-enthusiasts, denoting a long-term approach to a given investment or project.

  • Hook Point

    A phrase or word that catches the attention of the listener when in a conversation or pitch. These hook points should be paid attention to and are a helpful tool for creating an engaging dialogue between yourself and the listener(s). (e.g. Someone is telling you about their company and you are half listening when they mention Fintech, which is a special interest of yours, and you unconsciously refocus on the conversation at hand and become more engaged)

I

  • Initial Coin Offering (ICO)

    The crypto industry’s equivalent of an initial public offering (IPO), in which a company publicly offers coins to investors for the purpose of raising money to create a new dapp, platform, or service.

L

  • Layer 1 (L1)

    Refers to the underlying main blockchain architecture (bitcoin, ethereum, etc.).

  • Layer 2 (L2)

    Overlaying network/technology that lives on top of the underlying blockchain architecture to improve its scalability and efficiency.

  • Liquidity

    In Defi, liquidity refers to how easily a coin or NFT can be converted into cash or traded. A market with “good liquidity” has sufficient supply and demand to facilitate transactions quickly.

  • Liquidity Pool

    A DeFi protocol that allows users to lock their assets via smart contract to provide liquidity to the market. The assets are then available to be used by other participants in the given protocol for borrowing and other secondary activities.

M

  • Market Cap

    A metric that measures the market size of a given token or asset. It is calculated by multiplying the present market price of the token/asset by the total number of assets in circulation.

  • Metaverse

    A network of 3D virtual worlds that allow individuals and businesses to engage within a computer-generated environment for the purpose of social engagement, business, gaming, etc.

  • Mining

    The competitive process in which new transactions are verified and added to the blockchain for a cryptocurrency that uses the proof-of-work method.

  • Minting

    The process of creating or generating something on the blockchain through validating information, creating a new block, and recording that information to the public ledger. Typical assets that are minted within web3 are NFTs or new cryptocurrencies.

N

  • Non-Fungible Token (NFT)

    A non-interchangeable (non-identical) piece of data stored on the blockchain that can be sold and traded. NFTs have a wide range of uses from art, authentication, real estate, gaming, etc.

  • Not Gonna Make It (NGMI)

    A common acronym used by crypto-enthusiasts denoting that a certain project or asset has a low chance of becoming valuable in the long-term.

P

  • Paper Hands

    A term used to describe someone who sells a given asset too early.

  • Peer-to-Peer (P2P)

    A decentralized activity referring to the direct exchange of a given asset (cryptocurrency, NFT, etc.) between individual parties without the participation of a centralized authority.

  • Private Key

    A cryptographic key that can be used to encrypt & decrypt data. Private key holders provide complete access to a given wallet.

  • Profile Picture (PFP)

    A term used to refer to an individual’s profile picture on a given social media platform. Profile pictures are becoming increasingly dominated by NFTs as a method of community identification and status.

  • Proof-of-stake (POS)

    This consensus protocol works by selecting validators in proportion to the quantity of their holdings in said cryptocurrency. Ethereum is the most commonly referred to cryptocurrency utilizing POS.

  • Proof-of-work (POW)

    A cryptographic proof in which members of a network expend effort solving mathematical puzzles to validate transactions on a blockchain. Typically referenced in cryptocurrency mining, validating the transactions of a given blockchain, and recieving new tokens as a reward. Bitcoin is the most commonly referred to cryptocurrency utilizing POW.

  • Protocol

    Protocols are basic sets of rules that allow data to be shared between computers. Within the world of cryptocurrency they are used to establish the structure of a given blockchain.

  • Public Key

    A cryptographic key that can be used by anyone to encrypt a message and send to a particular wallet.

  • Pump & Dump

    Promoting the purchase of a given asset in order to inflate the price artificially (not by generating value), while the initial owners then sell their own shares while the price is high. This often leads to a collapse in the price of the asset afterward.

R

  • Rollups

    Transactions executed outside Layer 1, which are then posted to Layer 1 where consensus can be reached.

  • Rug Pull

    A scam where a given asset is promoted, typically through social media, driving the price up at which point the assets are sold or frozen, making it impossible for investors to sell/recoup their investment. This is typically a surprise to the investor base, who were unaware of the protocol.

S

  • Shilling

    The activity of advertising a cryptocurrency or NFT project by publicly endorsing the project across media channels, sometimes for compensation.

  • Smart Contract

    A computer program or transaction protocol which is designed to automatically self-execute once either the actions of a given agreement have been performed, or specific conditions have been met.

  • Stablecoin

    A cryptocurrency that is designed to have a relatively stable price, often pegged to cryptocurrency, fiat money, etc.

T

  • Testnet

    An instance of a blockchain utilizing the existing or newest version of the underlying technology. This is often used for testing and experimentation.

W

  • Wallet

    A cryptocurrency wallet is an application that allows cryptocurrency to be stored and retrieved. They contain both a public and private key for encryption and decryption purposes. Different wallets are able to hold different cryptocurrencies, subject to technological capabilities.

  • We Are All Gonna Make It (WAGMI)

    A common acronym that is used to build confidence and encourage a given community to not lose hope in a project or token’s future success.

  • Web1

    The original internet which consisted of read-only websites.

  • Web2

    The modern internet which allows users to read and write (e.g. social media and blogs in their most basic forms).

  • Web3

    The current bleeding-edge technology of today’s “internet”, which allows for reading, writing, and transactions (smart contracts). This enables increased peer-to-peer engagement without the need of a centralized authority.

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