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web 3.0
glossary
glossary
Table
term
abbreviation
definition
examples
1
airdrops
used when projects want to mobilise the community to adopt a new product or service,
and consist of a smart contract assigning tokens directly into pre-qualified wallets.
$APE, LooksRare
2
block
cluster of transactions validated by the network. new set of transactions hashed or compacted into a small data set. each block stores a data blob (which is usually a list of transactions), its block number, and the hash of the previous block.
3
blockchain
distributed software that runs over a network of computers owned or operated by many validators (sometimes miners) that validate transactions. a type of DLT.
4
blockchain network
network uses different types of cryptography to record transactions and track assets. blockchains play a crucial role in cryptocurrency systems by maintaining a secure and decentralized record of transactions.
Bitcoin, Ethereum
5
centralised exchange
CEX
cryptocurrency marketplaces or exchanges owned by a central operator.
enable fiat currencies to be traded for crypto (and vice versa) or trading crypto-crypto pairs (e.g. BTC for ETH).
Coinbase, Kraken, FTX
6
cryptoasset
crypto
an asset that exists on a blockchain network (or a "real world" asset recorded on a blockchain network).
can be accessed and traded via a web3 wallet or a centralised exchange.
$APE, BTC, ETH, USDC, NFTs and more
7
cryptocurrency (legacy)
crypto
term historically used to describe assets such as bitcoin and ether.
however, these assets behave less like currency than stablecoins. as such, this term is less often used.
USDC, DAI
8
cryptographic hash function
CHF
mathematical algorithm that maps data of an arbitrary size (often called the "message") to a bit array of a fixed size (the "hash value", "hash", or "message digest"). it is a one-way function, that is,
a function for which it is practically infeasible to invert or reverse the computation.
must be deterministic, the same message always results in the same hash.
checksums, SHA256
9
decentralised applications
DApps
autonomous app that runs on a blockchain.
like conventional software applications, dapps provide function or utility to users. also called smart contracts.
Uniswap, LooksRare
10
decentralised autonomous organisation
DAO
decentralised organisation where power is shared among members.
access and voting rights are usually granted through token ownership.
AAVE DAO, Gitcoin DAO, Uniswap DAO, LinksDAO
11
decentralised exchange
DEX
p2p cryptocurrency marketplace where transactions occur directly between crypto traders.
unlike CEXs (e.g. coinbase), DEXs don’t enable exchanges between fiat and crypto —
they only trade cryptocurrency tokens for other cryptocurrency tokens.
Uniswap, Sushiswap
12
decentralised finance
DeFi
refers to a variety of financial services applications that have no clear central operator
and are community-owned and governed.
Uniswap, Compound, Yield, Curve Finance, MakerDAO
13
distributed ledger technology
DLT
a database that is shared amongst computers spread around the globe.
a "trustable data record" built as a distributed system.
a trustless and safer alternative to centralized services. publicly visible history of transactions.
key features of dlt from a technological standpoint are immutability and distribution.
blockchain, directed acyclic graph, hashgraph
14
ethereum virtual machine
EVM
a single, canonical computer whose state everyone on the ethereum network agrees on.
ethereum’s state is a large data structure which holds not only all accounts and balances, but a machine state, which can change from block to block according to a pre-defined set of rules, and which can execute arbitrary machine code. the specific rules of changing state from block to block are defined by the EVM.
15
forking
allows developers to create new software from an existing code base.
can be "hard" or "soft" depending on how disruptive you want to be.
soft forks are incremental changes, while hard forks break with the common thread of the original project.
soft fork: Bitcoin Taproot, hard fork: Bitcoin Cash
16
hash
a bit array of a fixed size, the result of a cryptographic hash function.
17
ledger
the data store that keeps all blockchain data.
18
miner
users responsible and rewarded for creating new blocks.
19
minting a token
the first time a token is bought (for example, from a smart contract) it is "minted”.
stablecoin issuers "mint” stablecoins, and NFT collection creators allow users to "mint’ a new NFT.
Stablecoins, NFTs
20
non-fungible token
NFT
type of token that cannot be exchanged one to one with another. each token is unique.
this is unlike a fungible token, where one can be traded for another and the value exchange is equal.
Cryptopunks, Bored Apes, Moonbirds
21
on-chain
whenever data is stored or an activity or process runs on a blockchain, it is said to be on-chain.
"Dune allows for on-chain analysis’
22
proof-of-stake
PoS
consensus mechanism for processing transactions and securing a blockchain.
cryptocurrency owners stake coins as collateral for the right to validate transactions.
faster than proof-of-work but considered less secure by some, given its economic nature.
Tezos, Ethereum (post-merge)
23
proof-of-work
PoW
consensus mechanism that requires network members to solve an arbitrary mathematical puzzle to prevent anybody from gaming the system. highly reliable and secure but considered energy-intensive and slow.
Bitcoin, Ethereum (pre-merge)
24
protocol
rules that define how data is allowed to be transferred between different computer systems.
defines the way data must be structured to be accepted into a system,
and establish safeguards to prevent malicious users from causing damage.
Bitcoin, Ethereum, Hyperledger, Solana
25
smart contracts
also called decentralized apps.
26
stablecoin
cryptocurrencies whose market value is tied to a "stable” reserve asset, like the USD.
USDC, USDT, DAI, UST
27
token
common term used to describe an asset or form of value represented on a blockchain network.
could be a network token (ETH, SOL), a fungible token (UNI, sushi) or a non-fungible token (cryptopunks, etc.).
ETH, BTC, UNI, Cryptopunks
28
wallet
software used to buy, sell or hold cryptoassets and tokens (may be custodial or non-custodial).
BlockFi, Coinbase (main), FTX, Metamask, Rainbow, Phantom
29
web3 wallet
a term used to describe wallets that directly interact with blockchain networks.
Metamask, Rainbow, Phantom
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