The glossary provides you with definitions for the most important terms to navigate the web3 landscape.

Navigating conversations and understanding key concepts in web3 sometimes requires its own terminology. In this regard, web3 is not just a technological shift, but also a cultural one.

This guide will provide you with the most essential terms to decode the language and become a web3 citizen. It is tailored to provide you with clear and concise definitions for the unique terms that define this industry.

Dive in, discover, and enhance your fluency in the unique lexicon of the web3 industry. (-:

If you want to contribute to the glossary, have a look on Github.

Glossary a-z

• Airdrop
  Distribution of free tokens, usually to promote a product or incentivise early users

• Altcoin
  Alternative coin, any cryptocurrency other than Bitcoin

• AMM
  Automated Market Maker, popular mechanism among decentralized exchanges (DEXes) involving liquidity pools instead of an orderbook-based system

• Anon
  Anonymous, entity that wishes to remain anonymous or pseudonymous

• Beacon Chain
  Ethereum’s proof-of-stake (PoS) consensus layer

• Bridge
  Service that transfers tokens between multiple blockchains (cross-chain)

• BUIDL
  Term to describe the web3 building ethos, even despite a bear market, inspired by HODL

• CeFi
  Centralized finance, the “traditional” finance sector, in contrast to DeFi (decentralized finance)

• CEX
  Centralized Exchange, app for swapping tokens run by a company, often used for fiat exchange; in contrast to DEX (Decentralized Exchange)

• Cypherpunks
  Cypher + punks, movement originating in the early 90s, emphasizing the need for privacy in the digital age, enforced by cryptography

• DAO
  Decentralized Autonomous Organization, blockchain-based organizations that are owned and governed by their members via tokens

• DApp
  Decentralized Application, blockchain-based services that use smart contracts in their backend and thus have a distributed nature, without the need for intermediaries

• DeFi
  Decentralized Finance, general term for decentralized services in the financial sector, that are permissionless and globally available, e.g., DEXes (decentralized exchanges) or lending protocols

• Degen
  Degenerate, term for a person that is deeply involved in crypto or a specific sector, e.g., DeFi Degens

• DEX
  Decentralized Exchange, blockchain-based app for swapping tokens that use smart contracts to be permissionless

• Diamond Hands
  Holding a digital asset through very volatile times

• DYOR
  Do Your Own Research, principle of self-verification instead of trusting others

• EIP
  Ethereum Improvement Proposal, a process to describe standards for the Ethereum platform

• ERC
  Ethereum Request for Comments, form of EIP to specify application layer standards; the most popular ones are ERC20 for fungible tokens and ERC721 for non-fungible tokens

• EVM
  Ethereum Virtual Machine, the environment in which all Ethereum accounts and smart contracts live, the EVM defines the rules for computing a new valid state from block to block

• Exchange
  An application that allows users to buy and sell crypto assets

• Exit Scam
  Scenario in which a project or a part of a team steals the investors’ money and leaves

• Explorer
  Webpage that displays information about the transaction history of a blockchain

• Faucet
  Service that dispenses free tokens, usually for test networks

• Flippening
  Term to describe a pivotal change in price or perception, e.g., when the market cap of a token exceeds the one of another token

• FOMO
  Fear Of Missing Out, term to describe the feeling of not being included in something, e.g., a crypto investment or news

• Fork
  Split of a blockchain or project due to technical issues or a dispute

• FUD
  Fear, Uncertainty and Doubt, the opposite of FOMO

• Gas
  Term for the fee that Ethereum transactions cost; it is used to reward validators and prevents malicious use of the blockchain

• Genesis Block
  The first block recorded in a blockchain

• Gm
  Good morning, form of greetings in crypto communities; due to the global nature of web3 it can be used at any time of the day

• Hash
  Function that can be used to map data of arbitrary size to fixed-size values, e.g., for encryption, cryptographic hash functions are used in many parts of the web3 industry

• HODL
  A frequent term referring to a strict buy-and-hold strategy, became famous after a misspelling in the bitcointalk forum in 2013

• ICO
  Initial coin offering, the process of selling tokens when launching a new crypto project, inspired by the initial public offering (IPO) for stocks.

• JOMO
  Joy Of Missing Out, converting FOMO into a positive feeling

• KYC
  Know Your Customer, a process to verify the identity of customers; often used by centralized exchanges or entities

• Layer 1
  Base blockchain architecture that serves as the foundation for other layers, also called mainnet, e.g., Ethereum

• Layer 2
  Built on top of layer 1, usually for scaling purposes, e.g., Optimism

• Minting
  Process of creating new token(s)

• Mixer
  Decentralized Application that “mixes” tokens to cover their transaction history, used for private transactions

• NFT
  Non-Fungible Token, a type of token that is not interchangeable or divisible, in contrast to fungible tokens; often used for digital collectibles

• Node
  An instance holding a copy of the blockchain, it is connected to other nodes, synchronizing the blockchain and thus forming the network

• OG
  Original Gangster, a person who was very early involved in crypto or a specific project

• Oracle
  Data bridge to bring real-world information onto the blockchain

• P2P
  Peer-to-peer, referring to a transaction between two people without other (central) parties involved

• Rollups
  Popular type of layer 2, scaling solution that uses transaction bundling (“rolling up”) transactions before publishing them to the main chain

• Rug Pull
  Scenario in which a team abandons a project and/or removes its liquidity, similar to exit scams

• SBTs
  Soul-Bound-token, type of NFT that is non-transferrable

• Smart contract
  Programs that run on the blockchain that follow the "if this then that" logic, they execute themselves when certain conditions are met

• Snapshot
  Record of a blockchain at a particular block height, also the name of a popular DAO voting tool

• Solidity
  Smart Contract Programming Language, created for the Ethereum blockchain but popular for other chains as well

• Stablecoin
  A cryptocurrency that is pegged to another asset, mostly USD

• Staking
  Process of locking tokens to contribute to validation in a proof of stake blockchain

• Token
  Representation of a digital asset on a blockchain

• TVL
  Total Value Locked, equivalent of USD locked in a blockchain or protocol, often used as an indicator in DeFi, e.g. in lending protocols

• Validator
  Virtual entity participating in the consensus of a proof of stake blockchain, they participate in producing blocks and validating transactions

• WAGMI
  Acronym for “We're All Gonna Make It”, expression used to show an optimistic attitude about the future of web3

• Whale
  An entity holding a large amount of cryptocurrency, sometimes even a significant part of a project

• Whitepaper
  Document that is released with new crypto projects to explain the details of the project.

• ZKP
  Zero-Knowledge-Proof, cryptographic mechanism to verify an information without revealing it, often used for scaling solutions of privacy applications