Crypto Terms and Resources
Breaking down common terms found in decentralised finance and the crypto world.
Here’s some popular jargon used in the space that can be confusing to come to grips with, especially if you are dipping your toes in for the first time. There are also some great sites listed below that will help pierce through to the heart of crypto.
Terms
DeFi
Decentralised Finance — Refers to the use of systems built on blockchain that mimic traditional financial systems such as exchanges, lending, and digital shopping.
Liquidity
How easily an asset can be converted into cash. An example of a Liquid asset would be gold. Illiquid asset — A house.
Exit Scam
Also known as a “rug pull”. Where the project creators or big investors withdraw their investment, funded by those they have deceived to invest.
DYOR
Do your own research — Mainly used as a warning. Blindly following others and investing without checking fundamentals may incur losses.
Bootstrap
Another way of saying “get off the ground” when used in finance. Has a different meaning in computer science.
DAO
Decentralised Autonomous Organisation — Leaderless companies built on blockchain. Earn voting rights via ownership of tokens. (Similar to how stocks work in traditional finance.) Token holders can vote on how the DAO invests its assets or how it handles its products. In reality, the level of autonomy achieved differs radically between projects.
Market Maker / Liquidity Provider
A company that fills orders on CEXs and provides liquidity to DEX 2-sided asset pools. (Basically, it allows people to buy and sell assets without someone on the other end doing the same.)
Web 3.0
Quite a general term but mainly refers to upgrades made to the structure of the web through blockchain.
Holders
The number of unique wallets containing the particular token/coin.
Hodl
Purposely misspelled way of writing “hold”. Means to keep hold of an asset in times of devaluation. Taken a new meaning of blind faith into a project until the asset is worth enough to make them “rich”.
Moonshot
“Moon”, steep rise in coin/token/stock price.
AMM
Automatic Market Maker — Rather than a traditional order book, AMM’s balance buy-sell orders using a mathematical curve. This requires 2 sided liquidity pools to work, however. (A “pool” of resources that can be drawn on and filled back up.)
DEX — Decentralised Exchange
CEX — Centralised Exchange
dApp — Decentralised Application
Staking
Staking itself refers to “lending” your assets to a platform/company/exchange, though is subject to various risks. The reasons for a staking system differ per project. (Ethereum -> PoS, Uniswap -> Liquidity Provision)
Slippage
The difference in price between when submitting the transaction and it going through. Higher slippage occurs in times of high volatility. Slippage can also refer to price slippage in AMM systems, where a large order relative to the liquidity available causes a price impact.
Composability
How seamless it is to connect various things together. In DeFi it’s used to describe the ability for dApps and coins of different types to work together.
Market Cap
Market Capitalisation. The current market price of the token times the number of tokens in circulation.
Resources
Protos
Crypto news that aims to inform individuals in an easy-to-understand but in-depth manner.
Rekt.news
A better look at some of crypto’s biggest incidents of fraud and how they unfolded.
Paradigm (Writing)
VC titan Paradigm has informative, engaging content that spans from (de)finance to NFTs, all written by their main investment team.
Delphi Digital
While some of their content is found behind paywalls, they also have free articles that provide on-chain and financial analyses of recent events. Delphi also invites upcoming project leaders onto their podcast to discuss everything crypto.
Twitter
While subject to opinion, there are a lot of crypto enthusiasts on Twitter that are releasing free, eye-opening articles and provide valuable insight into their respective interests, be it NFTs, blockchain, gaming, finance, or technology.
I personally follow @0xHamz, @ZachXBT, @bneiluj, and @Algodtrading to name a few!
Liked this article? Here are some other articles you may enjoy:
- Cryptocurrency-related Investment Strategies — A guide to Futures, ETFs, Options, and Covered Calls.
- 40 Useful Pandas Snippets — Pandas snippets that come in handy in data analysis work.
- What are Yield Aggregators? — Passive Income at the Highest APRs.
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