Crypto glossary.
Clear, concise definitions of the terms you'll encounter across crypto — explained simply, one concept at a time. 991 terms, A to Z.
991 of 991 terms
1
1-of-1 Art
An NFT representing a single, unique piece of art with no other identical copies, as distinct from a generative collection made up of many algorithmically varied pieces.
A 1-of-1 art piece by a well-known digital artist is valued based on factors like the artist's reputation and the specific work's individual merit, rather than its rarity relative to sibling pieces.
13F Filing
A quarterly U.S. regulatory disclosure that institutional investment managers above a certain size must file, publicly revealing their equity holdings, including any spot crypto ETF shares.
Researchers often analyze 13F filings each quarter to track which institutional investors have disclosed new or growing positions in spot crypto ETF shares.
A
ABI (Application Binary Interface)
A standardized description of a smart contract's functions and data structures, letting external applications know how to correctly interact with it.
A wallet application needs a smart contract's ABI to display and correctly format an interaction with that contract's functions.
Access Control (Smart Contract)
Smart contract code that restricts which addresses are permitted to call specific, generally privileged, functions.
A missing or incorrectly implemented access control check, letting an unintended address call a privileged function, is a well-documented, recurring root cause behind real smart contract exploits.
Account Abstraction
Letting a wallet's authorization logic be programmable, rather than fixed to a single private key.
An account-abstraction wallet might let a user recover access through a set of trusted contacts instead of a seed phrase alone.
Accredited Investor
A legal classification, in some jurisdictions, permitting access to certain restricted investment offerings.
A security token offering might be restricted to accredited investors under applicable securities rules.
Accumulation / Distribution Line
A cumulative indicator using price and volume together to assess whether an asset is being bought (accumulated) or sold (distributed) over time.
The Accumulation / Distribution Line rising while price stays flat is commonly interpreted similarly to OBV divergence — a sign of underlying accumulation.
Accumulation Phase
A market phase, generally following a decline, where informed or patient buyers steadily acquire an asset while broader sentiment remains pessimistic.
An accumulation phase is commonly described as patient buyers steadily acquiring an asset while broader public sentiment remains indifferent or pessimistic.
Actively Validated Service (AVS)
A service or network that relies on shared security, with validators opting in to actively validate it in exchange for additional rewards.
A validator opting in to secure an AVS earns additional rewards, but also accepts that AVS's own specific slashing conditions on top of their existing risk.
Adaptor Signature
A cryptographic technique that links the validity of a digital signature to a separate secret value, letting two actions be coupled together without revealing that link on-chain.
An adaptor signature can link a Lightning Network payment to a secret value, such that completing the payment's signature necessarily reveals that secret to the other party.
Address Poisoning
Sending transactions from a lookalike address hoping a victim copies it by mistake.
An address-poisoning attempt might leave a lookalike address in a victim's transaction history hoping it's copied later.
Address Reuse
Using the same wallet address for multiple transactions, which reduces privacy by letting an outside observer link all of that address's activity together.
An outside observer can link every transaction involving a reused address together, building a more complete activity picture than they could from separate, unrelated addresses.
Adjusted Cost Base (Canada)
The Canadian tax term for an asset's cost basis, calculated as a pooled average cost across all identical units held, rather than tracking each individual unit's own purchase price.
A Canadian taxpayer who bought Bitcoin at three different prices over time has a single pooled Adjusted Cost Base applied to their entire holding, rather than being able to select which specific units to treat as sold first.
Advance-Fee Scam
A scam that asks a victim to pay an upfront fee to unlock a much larger promised sum, which never actually arrives.
A message offering to recover crypto lost to a previous scam, in exchange for an upfront "release fee," is a classic advance-fee scam.
Agentic Payments
Payments initiated and completed by autonomous software acting on a user's behalf, without a human manually entering payment details for each transaction.
An agentic payment might involve an AI agent autonomously paying for an API service it needs, within spending limits its operator configured in advance.
AI Agent Wallet
A crypto wallet designed to be controlled directly by autonomous software rather than a human, generally with programmable spending limits set in advance.
An AI agent wallet's programmable spending caps are specifically designed to bound the financial harm an autonomous agent could cause if it malfunctions or is manipulated.
Air-Gapped Wallet
A wallet whose private keys are kept on a device that never connects to the internet.
An air-gapped wallet might sign a transaction offline, then transfer only the signed result via QR code to a connected device.
Airdrop
A free distribution of tokens, often to reward early users or promote a project.
A protocol might airdrop its new governance token to wallets that used the platform before its launch.
Airdrop Farming
Deliberately performing on-chain activity across protocols specifically hoping to qualify for a future token airdrop.
A user might deliberately use a new protocol's features repeatedly, hoping that activity qualifies them for a future governance-token airdrop.
Algorithmic Stablecoin
A stablecoin that maintains its peg primarily through automated incentives rather than direct asset backing.
An algorithmic stablecoin relies on incentive mechanisms rather than direct asset reserves to hold its peg.
Algorithmic Trading
Trading executed automatically by a predefined computer program, rather than a human manually placing each individual order.
A simple algorithmic trading strategy might automatically buy whenever a specific moving-average crossover signal occurs, with no manual order placement.
All-or-None Order
An order instruction requiring the full requested size to execute, whether immediately or over time, without ever accepting a partial fill.
A trader needing an exact, complete position size but willing to wait might use an All-or-None order rather than a Fill-or-Kill order, which would cancel immediately if the full size can't fill right away.
All-Time High
The highest price an asset has ever reached, as recorded by a given source.
An asset trading well below its all-time high is sometimes described that way in market commentary.
All-Time Low
The lowest price an asset has ever reached, as recorded by a given source.
A newer asset's all-time low is often close to its launch price, since it has less trading history.
Allowlist
A list of addresses granted early or guaranteed access to mint an NFT collection.
An allowlist spot might guarantee the ability to mint before the general public sale opens.
Altcoin
A general term for any cryptocurrency other than Bitcoin.
Ethereum, despite its size and significance, is still technically classified as an altcoin relative to Bitcoin.
Altcoin Season
A market period in which a broad range of alternative cryptocurrencies significantly outperform Bitcoin, often associated with falling Bitcoin market dominance.
During a period commonly described as altcoin season, a broad basket of alternative cryptocurrencies might significantly outperform Bitcoin, coinciding with falling Bitcoin market dominance.
Andrews' Pitchfork
A charting tool using three selected points to draw a median trend line flanked by two parallel lines, forming a potential support/resistance channel.
Andrews' Pitchfork's median line is commonly watched as a dynamic support or resistance level as price moves through the projected channel.
Anonymity Set
The group of plausible alternatives a specific private transaction could be hidden among — the larger the set, the stronger the privacy.
A larger anonymity set makes it harder for an observer to determine which specific transaction within it was the real one.
Anti-Money Laundering
Regulatory requirements and practices designed to detect and prevent illicit financial activity.
A regulated exchange's AML program might flag unusually structured transaction patterns for review.
App-Chain
A blockchain built and optimized specifically for a single application, rather than hosting many unrelated applications on a shared, general-purpose chain.
An app-chain gives its single application full control over performance and fee structure, without competing with unrelated applications for the same block space.
APR
Annual Percentage Rate — a simple, non-compounded yearly rate of return or cost.
A lending protocol might quote its borrowing cost as an APR rather than a compounded APY.
APY
Annual Percentage Yield — a return rate that accounts for the effect of compounding.
A savings product advertising a 5% APY accounts for compounding over the year.
Arbitrage
Profiting from a temporary price difference for the same asset across markets.
Buying an asset on one exchange and immediately selling it on another at a higher price is a simple arbitrage example.
Arbitrage Bot
Automated software that continuously scans multiple markets for price discrepancies in the same asset and executes trades to capture the difference before it disappears.
An arbitrage bot might detect that the same asset is trading at a slightly higher price on one exchange than another, and automatically buy low and sell high before the price gap closes.
Archive Node
A full node that retains a blockchain's complete historical state data, not just recent state.
A block explorer typically relies on archive nodes to answer historical state queries.
Arnaud Legoux Moving Average (ALMA)
A moving average that applies a Gaussian-shaped weighting curve offset toward recent prices, designed to reduce both lag and noise at once.
ALMA's Gaussian weighting curve is a structurally different approach from the linear or exponential weighting most other moving averages use.
Aroon and Aroon Oscillator
Indicators that measure how recently price made a new high or low within a lookback period, used to gauge whether a trend is strengthening.
An Aroon Up reading near 100 means the current lookback window's highest price occurred very recently, consistent with a strengthening uptrend.
Arweave
A decentralized storage network designed for permanent data storage, where a single upfront payment is intended to fund storage indefinitely.
An NFT project might choose Arweave over standard IPFS specifically to rely on its built-in, paid-for permanence guarantee rather than depending on volunteer pinning.
ASIC
Specialized hardware built specifically for efficient cryptocurrency mining.
Bitcoin mining today is dominated by ASIC hardware rather than general-purpose computers.
ASIC Resistance
A design goal for a proof-of-work algorithm intended to keep ordinary consumer hardware like GPUs competitive with specialized mining equipment, to preserve broader mining accessibility.
A proof-of-work network designed with ASIC resistance in mind aims to keep ordinary consumer GPUs profitable to mine with, rather than ceding the field entirely to specialized ASIC hardware.
Asset Allocation
How a portfolio's total value is divided across different assets or categories of assets.
A simple asset allocation might target 60% in one asset and 40% in another.
Atomic Swap
A trustless exchange of assets across two different blockchains that either fully completes or fully fails.
An atomic swap lets two parties trade assets across separate blockchains without a trusted intermediary.
Attestation
A recorded, signed statement that a specific fact or event is true.
A stablecoin issuer's reserve attestation is a signed statement about the reserves it claims to hold.
Audit Firm
A specialized security company that systematically reviews smart contract code for vulnerabilities before or after deployment, producing a public report of its findings.
A protocol might undergo audits from multiple independent firms before launch, since different audit firms often catch different categories of issues.
Authorized Participant
A large financial institution permitted to create and redeem ETF shares directly with the issuer, keeping the share price tied to the underlying asset.
Major banks commonly act as Authorized Participants for large spot crypto ETFs.
Auto-Compounding
A feature that automatically reinvests earned yield back into a position, rather than requiring a user to manually claim and restake it.
Auto-compounding can produce a meaningfully higher effective return than manual, infrequent compounding over the same period, purely from more frequent reinvestment.
Auto-Deleveraging (ADL)
An exchange mechanism that forcibly reduces profitable traders' opposite positions to cover a liquidation shortfall an insurance fund can't absorb.
A trader holding a highly profitable leveraged position during extreme volatility can have part of it involuntarily closed through auto-deleveraging, with no fault of their own.
Automated Market Maker
A system that prices and executes trades using a formula and a pool of funds, not an order book.
An AMM-based DEX lets a user swap one token for another directly against a liquidity pool.
Auxiliary Proof of Work (AuxPoW)
The specific technical standard that embeds a primary chain's block header inside an auxiliary chain's block, enabling merge mining between them.
A node validating an AuxPoW block checks that the embedded primary-chain block header genuinely satisfies both chains' difficulty requirements before accepting the auxiliary chain's block as valid.
Avalanche Effect
A property of a good hash function where changing even a single bit of input produces a completely different, unpredictable output.
Changing a single character in a large document produces a completely unrelated hash output, a direct demonstration of the avalanche effect.
Average Cost Basis
A cost-basis accounting method that averages the purchase price across all units of an asset held, rather than tracking individual units separately.
Under average cost basis, buying the same asset at several different prices results in one blended average cost figure applied to every unit held.
Average Directional Index (ADX)
A 0-100 indicator that measures trend strength specifically, independent of whether the trend is up or down.
A rising ADX during a downtrend indicates the downtrend is strengthening, not that a reversal to the upside is near.
Average True Range (ATR)
A pure volatility measure, averaging an asset's true trading range over a period, with no directional information included.
ATR is commonly used to size a stop-loss relative to an asset's actual recent volatility, rather than using an arbitrary fixed percentage.
Awesome Oscillator
The difference between a 5-period and 34-period simple moving average of an asset's midpoint price, used to gauge market momentum.
The Awesome Oscillator crossing above zero means its faster 5-period average has moved above its slower 34-period average.
B
Backrunning
An MEV strategy in which a bot places its own transaction immediately after a target transaction in the same block, to capture value created by it.
A backrunning bot might detect that a large swap has just pushed a token's price out of line across two exchanges, and immediately submit an arbitrage trade in the very next transaction slot.
Backwardation
A market condition where a futures contract trades below the current spot price, the structural opposite of contango.
A futures contract trading below the current spot price is in backwardation, the less common of the two conditions in crypto markets.
Bad Debt
Debt in a lending protocol that exceeds the value of its remaining collateral, meaning liquidation can no longer fully cover what's owed.
A sudden, sharp collateral price crash can outpace a protocol's liquidation mechanism, leaving bad debt that liquidating the remaining collateral can no longer fully cover.
Bank Run
A rush of holders trying to withdraw or redeem at once, which can overwhelm a system even if it's genuinely solvent.
A stablecoin can experience a bank-run-like depeg purely from panic-driven redemptions.
Bank Secrecy Act (BSA)
A foundational U.S. law requiring financial institutions, including many crypto businesses, to maintain records and file reports that help detect and prevent money laundering.
A U.S. crypto exchange operating as a money services business is generally subject to Bank Secrecy Act requirements, including customer identity verification and transaction reporting.
Base Fee
The minimum, algorithmically adjusted fee required for a transaction on Ethereum.
The base fee rises automatically when recent blocks have been consistently full, and falls when they haven't.
Based Rollup
A rollup design that hands transaction sequencing directly to the base layer's own block proposers, rather than running a separate, independent sequencer.
A based rollup's transactions are sequenced directly by the base layer's own block proposers, rather than by a separate operator the rollup runs itself.
Basis Points (bps)
A unit equal to one-hundredth of one percent, commonly used to express small differences in interest rates, fees, or yields with precision.
An exchange charging a 10 basis point trading fee is charging 0.10% of the trade's value, a precise way of expressing a small percentage.
Basis Risk
The risk that the price relationship (the basis) between a hedge and the position it's meant to hedge doesn't move exactly as expected.
A trader hedging spot exposure with futures still carries basis risk, since the futures price and spot price aren't guaranteed to move in perfect lockstep.
Basis Trade
A strategy that profits from the price difference between a futures contract and the spot asset.
A basis trade might hold a spot position and an offsetting short futures position to capture the price gap between them.
Batch Auction
A trading mechanism that collects multiple orders over a short period and settles them all together at a single clearing price.
Every order within the same batch auction settles at the same clearing price, removing the advantage of being processed first within that batch.
Beacon Chain
Ethereum's Proof-of-Stake consensus layer, which ran in parallel to the original execution chain before the two merged.
The Beacon Chain ran in parallel to Ethereum's original chain for nearly two years before the Merge actually joined the two together.
Bear Market
A sustained period of generally falling prices and negative market sentiment.
A prolonged decline across most major assets is often described as a bear market.
Bech32 (Native SegWit Address)
A Bitcoin address encoding format, recognizable by its 'bc1' prefix, built for SegWit transactions and designed to reduce transcription errors and lower fees.
A Bitcoin address starting with 'bc1' is a Bech32-encoded native SegWit address, distinct from the older address formats starting with '1' or '3'.
Bid-Ask Spread
The gap between the highest price buyers offer and the lowest price sellers accept.
A market order executed immediately will typically cross at least part of the bid-ask spread.
Bitcoin
The first cryptocurrency, created to allow direct digital payments without a central authority.
A person can send bitcoin to another person's wallet address anywhere in the world.
Bitcoin Improvement Proposal
A formal document proposing a change or standard for the Bitcoin protocol.
SegWit and Taproot were each introduced and documented through formal BIPs.
Bitcoin Treasury Strategy
A corporate approach of holding Bitcoin as a significant reserve asset on a company's balance sheet, often funded through debt or equity issuance specifically to acquire more.
A company pursuing a Bitcoin treasury strategy might issue convertible debt specifically to raise capital for further Bitcoin purchases, rather than funding the purchases purely from existing operating cash flow.
BitVM
A proposed framework for verifying arbitrary, complex computation related to Bitcoin using a fraud-proof, challenge-based model, without requiring any new changes to Bitcoin's own consensus rules.
A BitVM-based bridge design aims to let Bitcoin be moved to another chain with a dispute mechanism that doesn't require trusting a small federation to honestly process withdrawals.
Blob (Ethereum)
A large data packet Ethereum introduced to let Layer 2 rollups post data more cheaply.
Rollups posting data as blobs pay substantially less than they would posting the same data as regular calldata.
Block Explorer
A website that lets anyone search and view a blockchain's public transaction and address data.
Pasting a transaction hash into a block explorer lets you independently check its confirmation status.
Block Height
The number of blocks that came before a given block in a blockchain.
A protocol upgrade might be scheduled to activate at a specific block height rather than a calendar date.
Block Reward
Newly created cryptocurrency paid to whoever successfully adds the next block.
Bitcoin's block reward decreases over time through periodic halvings.
Block Size
The maximum amount of data a single blockchain block is permitted to contain, which directly limits how many transactions can be processed per block.
A larger block size allows more transactions per block, but also increases the storage and bandwidth requirements for anyone running a full node to keep up with the chain.
Block Time
The average time it takes a network to produce a new block, a key parameter shaping transaction speed, security assumptions, and finality.
A network targeting a shorter block time generally offers faster transaction inclusion, at the cost of somewhat more frequent temporary forks between competing blocks.
Block Trade
A large, privately negotiated trade executed as a single transaction, generally outside the normal public order book.
A fund looking to establish a very large position might arrange a block trade specifically to avoid signaling that intent to the broader public market.
Blockchain
A shared, tamper-evident record of information maintained by many computers at once.
Bitcoin uses a blockchain to record who owns and transfers units of the currency.
Blockchain Trilemma
The widely-discussed challenge that a blockchain design tends to optimize for at most two of decentralization, security, and scalability at once.
A highly decentralized, highly secure base-layer blockchain that processes transactions slowly is commonly discussed as an example of prioritizing two sides of the trilemma over the third.
BLS Signature
A digital signature scheme that allows thousands of individual signatures to be aggregated into a single compact signature, used in Ethereum's validator consensus.
Ethereum's validator set, numbering in the tens of thousands, relies on BLS signature aggregation to keep consensus verification practical.
Blue Chip Crypto
An informal term for large, well-established, widely recognized crypto assets.
Bitcoin and Ethereum are commonly described informally as blue chip crypto assets.
Bollinger Band Squeeze
A period when Bollinger Bands narrow sharply around price, reflecting unusually low volatility, often watched as a setup that frequently precedes a sharp breakout in either direction.
A Bollinger Band squeeze, where the bands narrow sharply around price, is commonly watched as a sign that a period of low volatility may soon give way to a sharp breakout.
Bollinger Bands
A moving average with upper and lower bands plotted a set number of standard deviations away, widening and narrowing as volatility changes.
A Bollinger Band "squeeze" — unusually narrow bands — is commonly watched as a sign of low volatility that may precede a larger price move.
Bonding
Locking up staked assets, often with a waiting period before they're actively earning or usable.
A newly bonded validator might need to wait through a bonding period before actively earning rewards.
Bonding Curve
A mathematical formula that automatically sets a token's price based on its current supply, rather than relying on an order book.
A simple bonding curve might set a token's price to rise predictably with each unit minted, giving early buyers a lower average price than later ones.
Bootstrap Node
A well-known, stable node a new participant connects to first when joining a peer-to-peer network, used purely to discover other active peers rather than to handle transactions directly.
A new node joining a blockchain network connects to a hardcoded bootstrap node first, purely to discover a working list of other active peers to connect with.
Bracket Order
A combined order setup that automatically attaches both a take-profit and a stop-loss order to a position the moment it's opened, bracketing it on both sides.
A trader opening a position with a bracket order simultaneously sets both a take-profit target and a stop-loss level, with whichever triggers first automatically canceling the other.
BRC-20
An experimental token standard built on top of Bitcoin Ordinals inscriptions.
A BRC-20 token's supply and transfers are tracked through Ordinals inscriptions, not smart contract logic.
Breakout (and Breakdown)
A decisive price move above a resistance level (breakout) or below a support level (breakdown), often interpreted as a signal that a new directional move is beginning.
A breakout above a long-standing resistance level on unusually heavy trading volume is generally considered more credible than the same move occurring on thin volume.
Bricked Wallet
A wallet rendered permanently unusable, typically due to a software bug in a smart contract wallet's code, rather than a lost key or ordinary user error.
A flaw that accidentally allowed a shared logic contract to be destroyed once permanently bricked every wallet that delegated its functionality to that same contract through a proxy pattern.
Bug Bounty
A program that rewards independent security researchers for responsibly disclosing a vulnerability before it can be exploited maliciously.
A well-funded bug bounty program can offer a researcher a reward large enough to make responsible disclosure clearly more attractive than attempting to exploit the bug.
Builder (MEV)
A specialized participant that constructs an optimized block of transactions, competing to offer validators the most valuable block to propose.
Multiple builders compete to construct the most valuable possible block, with the winning builder's block ultimately proposed by a validator.
Bull Market
A sustained period of generally rising prices and positive market sentiment.
Rising prices across most major assets over an extended period are often described as a bull market.
Burn Address
A wallet address with no known private key, used to permanently and verifiably remove tokens from circulation by sending them somewhere no one can ever spend them.
A project without a built-in burn function might instead send tokens directly to a well-known burn address, achieving the same permanent supply-reduction effect.
Burn Rate
The pace at which tokens are permanently removed from circulating supply over a given period, whether through a protocol's built-in mechanism or deliberate buyback-and-burn activity.
A token burning a larger amount through transaction-fee burns than it issues through staking rewards in a given period is net deflationary over that period.
Burn-and-Mint
A cross-chain bridging mechanism that permanently destroys tokens on the source chain and creates an equivalent new supply on the destination chain.
A multi-chain native token might use burn-and-mint so that moving it from one chain to another destroys the original supply and creates an equivalent new supply, rather than locking tokens in a bridge contract.
Burner Wallet
A temporary, disposable wallet created for a specific short-term purpose, holding minimal funds and generally abandoned afterward.
A user testing an unfamiliar, unaudited DeFi protocol might use a burner wallet funded with only a small amount, specifically to limit potential exposure.
Buyback and Burn
A protocol using its own revenue to purchase and destroy its token from the open market.
A protocol might commit a percentage of its revenue to a recurring buyback-and-burn program.
Buyout Clause
The mechanism letting someone acquire all fraction tokens of a fractionalized NFT to release it from its vault.
A buyout clause lets a buyer acquire every fraction token to unlock the underlying NFT.
Bytecode
The compiled, low-level code a smart contract actually runs on-chain.
A block explorer's "verified contract" badge confirms the published source code matches the deployed bytecode.
Byzantine Fault Tolerance
A distributed system's ability to reach correct consensus even if some participants act dishonestly or fail unpredictably.
A consensus mechanism's Byzantine fault tolerance threshold describes the maximum proportion of dishonest or failed participants it can withstand while still functioning correctly.
C
Call Option
An option contract granting the right to buy an asset at a set price.
A call option becomes more valuable as the underlying asset's price rises above its strike price.
Calldata
The data sent along with a transaction that a smart contract reads as input.
A token transfer's calldata specifies the recipient address and the amount to send.
Calmar Ratio
A risk-adjusted return metric dividing an investment's average annual return by its maximum drawdown, specifically focused on return relative to the worst historical loss experienced.
An investment with strong average annual returns but a historically severe maximum drawdown would show a lower Calmar Ratio than one with similar returns but a much milder worst-case drawdown.
Candlestick
A chart element showing an asset's open, high, low, and close price for a fixed time period.
A green (or white) candlestick typically means the close was above the open for that period; a red (or black) one means the opposite.
Capital Gain
The general concept of profit from selling an asset for more than its cost basis.
Selling an asset for more than its cost basis generally produces a capital gain.
Capital Loss
The general concept of a loss from selling an asset for less than its cost basis.
Selling an asset for less than its cost basis generally produces a capital loss.
Capital Loss Carryforward
A tax provision letting capital losses exceeding what can be deducted in the current year be carried forward to offset gains or income in future tax years.
An investor realizing a large crypto loss during a market downturn, beyond what that year's rules let them deduct, can carry the unused remainder forward to offset gains in future tax years.
Capitulation
A period of intense, widespread selling by holders giving up on a position during a sharp decline, commonly associated with a potential point of maximum pessimism.
A sharp spike in realized losses across a network's on-chain data is commonly cited as a signal associated with capitulation-style selling.
Cash-and-Carry Trade
A trade that buys an asset on the spot market while simultaneously selling a futures contract on it, aiming to profit from the gap between the two prices.
A cash-and-carry trade's profit comes from the spot-futures basis converging as expiry approaches, not from the underlying asset's price direction.
Cash-Settled vs. Physically-Settled
Two ways a derivatives contract can be resolved at expiration: paying the net value difference in cash, or actually delivering the underlying asset itself.
A cash-settled Bitcoin futures contract pays out the dollar-value difference at expiration, without either party ever needing to send or receive actual bitcoin.
CC0
A public domain dedication that an NFT or other creative work's rights holder uses to waive all copyright, letting anyone freely copy, modify, and commercially use it without permission.
A CC0-licensed PFP collection lets anyone, not just the original NFT holders, freely use and commercially build on the collection's artwork without needing permission.
Censorship Resistance
A blockchain's ability to continue including and finalizing valid transactions even if some participants, including powerful ones, try to block or exclude them.
A rollup with a single centralized sequencer and no forced-inclusion mechanism offers weaker censorship resistance than one where users can bypass the sequencer by submitting transactions to the base layer directly.
Centralized Exchange
A company-operated platform that holds custody of funds and matches trades internally.
Signing up for an account with a username and password to trade crypto typically describes a centralized exchange.
Chaikin Money Flow (CMF)
An indicator measuring buying or selling pressure over a period, based on where each period's close falls within its trading range, weighted by volume.
CMF staying consistently positive over several periods is commonly read as sustained accumulation, even if price itself hasn't moved much yet.
Chaikin Oscillator
A MACD-style indicator applied to the Accumulation / Distribution Line instead of to price.
The Chaikin Oscillator applies the same difference-of-two-EMAs structure MACD uses, but to the Accumulation / Distribution Line rather than to price.
Chaikin Volatility
An indicator measuring the rate of change in an asset's high-low trading range, rather than the range itself.
A sharp rise in Chaikin Volatility means the high-low trading range is expanding quickly, not that price is necessarily rising.
Chain Analysis
The practice of studying public blockchain data to trace fund flows, identify patterns, and attribute addresses to real-world entities.
Law enforcement agencies have used chain analysis to trace funds from major exchange hacks across many hops and eventually identify cash-out points at centralized exchanges.
Chain Reorganization
An event where a blockchain node switches from its current chain to a different, now-longer or heavier competing chain, discarding one or more recently added blocks.
A shallow, one-block chain reorganization happens periodically on proof-of-work chains simply due to near-simultaneous block discovery, with little practical consequence.
Chande Momentum Oscillator (CMO)
A momentum oscillator, similar to RSI, calculated directly from the sum of gains and losses without RSI's internal smoothing step.
CMO's -100-to-+100 scale, centered on zero, is a direct structural difference from RSI's 0-to-100 scale.
Change Address
A new address a wallet automatically sends unspent leftover value to, when a UTXO-based transaction doesn't use an entire input's full value.
Spending a 1 BTC UTXO to send 0.3 BTC generally creates a change output returning the remaining 0.7 BTC (minus fees) to a new change address.
Channel Factory
A Lightning Network construction letting a group of participants jointly fund many individual payment channels using a single, shared on-chain transaction.
A group of five Lightning Network users could use a single channel factory transaction to set up multiple channels between different pairs among themselves, rather than funding each channel separately on-chain.
Channel Pattern
A chart pattern formed by two parallel trendlines containing price action, with the upper line acting as resistance and the lower line acting as support as price oscillates between them.
A trader using a channel pattern might buy near the lower trendline and sell near the upper trendline, treating each boundary as a likely reversal zone while the channel holds.
Checkpoint (Consensus)
A specific block that a blockchain's consensus protocol treats as a trusted, agreed-upon reference point, used to anchor finality decisions or help new nodes sync safely.
A proof-of-stake chain's finality gadget has validators vote on specific checkpoint blocks at regular intervals, rather than voting on every individual block in between.
Checksum Address
A wallet address format with built-in error detection using mixed letter case.
A wallet might reject an address with an invalid checksum, catching a likely typo before funds are sent.
CheckTemplateVerify (CTV)
A proposed Bitcoin opcode that would let a transaction output commit to exactly how its funds must be spent in a specific future transaction.
A Bitcoin vault design using CheckTemplateVerify could enforce that funds can only move to a specific pre-committed destination after a mandatory time delay, adding a built-in security buffer against theft.
Child-Pays-for-Parent (CPFP)
A fee-bumping technique where a new, high-fee transaction spending an unconfirmed output incentivizes miners to confirm both it and the original low-fee transaction together.
A merchant who received an unconfirmed payment with too low a fee can use Child-Pays-for-Parent to attach a high-fee child transaction, incentivizing miners to confirm both transactions together.
Circuit Breaker
A temporary trading halt triggered automatically when price moves beyond a predefined threshold, intended to curb panic-driven volatility.
A traditional stock exchange's circuit breaker might automatically halt trading for a set period after a sufficiently sharp, fast price decline.
Circulating Market Cap
Market capitalization calculated using only currently circulating supply, not total or max supply.
Circulating market cap only counts tokens actually available in the market today, not locked or future supply.
Circulating Supply
The number of coins or tokens currently available and able to be traded.
Market cap is generally calculated as price multiplied by circulating supply.
Cliff Vesting
A vesting structure where no tokens unlock at all until a specific date, at which point a large portion unlocks all at once.
A one-year cliff means a token recipient receives nothing for a full year, then a lump sum unlocks at once on the cliff date.
Clipboard Hijacking
Malware that silently replaces a copied wallet address with an attacker's address before it's pasted.
Clipboard hijacking is one reason security guidance recommends visually double-checking at least the first and last few characters of a pasted address before confirming a transfer.
Clipper Malware
Malicious software that monitors a device's clipboard and silently swaps a copied crypto address for an attacker's address before the victim pastes it.
A user infected with clipper malware might copy a friend's correct wallet address, only to have the malware silently replace it with the attacker's address before they paste it into their wallet.
CLOB (Central Limit Order Book)
A trading system that matches buy and sell orders based on price and time priority, aggregating all participants' orders into a single, transparent order book.
A CLOB-based exchange matches a new buy order against the best available resting sell order in the book, prioritizing the best price and, among equal prices, whichever order arrived first.
Clone Contract (EIP-1167)
A minimal proxy contract standard that lets developers cheaply deploy many identical contract instances that all delegate their logic to one shared implementation contract.
A factory contract that needs to deploy thousands of near-identical vesting contracts can save substantial gas by deploying clone contracts instead of full copies of the vesting logic.
Closed-End Fund
An investment fund with a fixed number of shares that trade on an exchange at a price that can diverge from the fund's underlying net asset value, unlike an ETF's continuous creation and redemption process.
A closed-end crypto trust traded at a significant premium to its underlying holdings' net asset value during a period of high demand, since no mechanism existed to create new shares and correct the gap.
Coin Control
A wallet feature that lets a user manually choose which specific UTXOs to spend in a transaction, rather than letting the wallet select automatically.
A privacy-conscious user might use coin control to ensure a payment draws only from UTXOs that haven't been linked to their other activity, rather than letting the wallet combine them automatically.
Coin Days Destroyed
An on-chain metric weighting each transaction by how long the coins being moved had previously sat dormant, used to gauge whether long-held supply is becoming active again.
A sudden spike in coin days destroyed suggests that unusually old, long-dormant supply has started moving again, which analysts often interpret as long-term holders becoming active.
Coin Dormancy
An on-chain measure of how long a specific set of coins has remained unmoved since their last transaction, used to study holder behavior.
A large volume of very old, previously dormant coins suddenly moving on-chain is commonly read as a potentially significant signal, distinct from routine recent-coin movement.
Coin vs. Token
A distinction between a coin, which is the native asset of its own independent blockchain, and a token, which is issued on top of an existing blockchain through a smart contract.
Bitcoin is a coin, native to its own independent blockchain, while a governance token for a DeFi protocol built on Ethereum is a token, relying on Ethereum's own ETH to pay gas fees.
Coinbase Transaction
The special first transaction in a block that issues newly created cryptocurrency to the miner.
A miner's block reward is paid out through that block's coinbase transaction.
CoinJoin
A Bitcoin privacy technique that combines multiple users' transactions into one, making it harder to trace which input funded which output.
A CoinJoin transaction with many participants and uniform output amounts makes it harder to link any single input to any single output by simply inspecting the transaction.
Cold Storage
Keeping crypto keys on a device or medium that stays offline, reducing exposure to remote attacks.
A hardware wallet kept offline between uses is a common form of cold storage.
Cold Storage Multisig
Combining offline key storage with a multi-signature requirement for maximum custody security.
An institution might hold treasury funds in cold storage multisig requiring signatures from geographically separated keys.
Cold Wallet
A crypto wallet kept offline, reducing exposure to remote, internet-based attacks.
A hardware wallet kept unplugged between uses is a common form of cold storage.
Collateral
An asset pledged to secure a loan, which can be seized if the loan isn't repaid properly.
A DeFi loan might require depositing collateral worth significantly more than the amount borrowed.
Collateral Factor
The percentage of a deposited asset's value a lending protocol allows to be borrowed against.
A stablecoin typically has a higher collateral factor than a more volatile token.
Collateral Swap
Replacing the collateral backing an open DeFi loan with a different asset, without first closing out the existing position, typically done in a single atomic transaction.
A borrower growing concerned about their collateral asset's volatility might execute a collateral swap, moving to a more stable asset without needing to first repay and reopen their entire loan.
Collateralization Ratio
The current value of a position's collateral divided by the value of its debt, distinct from the protocol's minimum required ratio.
A position's collateralization ratio falling toward a lending protocol's minimum required level is what puts it at risk of liquidation.
Collateralized Debt Position (CDP)
A DeFi position where a user locks collateral into a smart contract in exchange for newly minted debt, typically a stablecoin, that must later be repaid to reclaim the collateral.
A user might open a CDP by locking ETH as collateral and minting a stablecoin against it, which they must later repay to reclaim their locked ETH.
Combating the Financing of Terrorism
Regulatory requirements aimed at preventing funds from reaching terrorist activity, commonly paired with AML rules.
A central bank's crypto exchange licensing regime might require ongoing AML/CFT compliance as a condition of maintaining the license.
Commission Rate (Validator)
The percentage share of staking rewards that a validator or node operator keeps for themselves before distributing the remainder to delegators.
A validator charging a 10% commission rate keeps one-tenth of the staking rewards earned on delegated stake, distributing the remaining 90% to delegators proportional to their contribution.
Commitment Scheme
A cryptographic method letting someone commit to a chosen value while keeping it hidden, then later reveal it in a way that proves it wasn't changed.
A commitment scheme lets a protocol prove a value was fixed at an earlier point in time, without revealing the value itself until a later reveal step.
Commodity Channel Index (CCI)
An unbounded oscillator measuring how far price has deviated from its statistical average, used to flag overbought/oversold extremes and emerging trends.
CCI readings above +100 or below -100 are commonly discussed as the start of a potentially strong trending move, rather than a fixed overbought/oversold boundary.
Common Reporting Standard (CRS)
An international standard under which participating countries' financial institutions automatically exchange account holder information with each other's tax authorities.
A crypto account held through an exchange based in a CRS-participating country can be subject to automatic reporting to the account holder's home tax authority.
Composability
The ability for different DeFi protocols to integrate and build on top of one another.
A new protocol might be built by composing an existing lending protocol with an existing DEX.
Compound Annual Growth Rate (CAGR)
The smoothed, constant annual growth rate that would take a beginning value to an ending value over a period, ignoring actual year-to-year volatility.
An investment that fell 50% then rose 100% back to its starting value has a CAGR of 0% over that period, despite the large swings along the way.
Concentrated Liquidity
An AMM design letting liquidity providers focus capital within a specific price range.
A liquidity provider using concentrated liquidity might focus their capital in a narrow range around the current price.
Conditional Token
A token representing a claim that pays out only if a specific future outcome occurs, created by splitting collateral into a complete set of mutually exclusive outcome tokens in a prediction market.
A prediction market splitting $1 of collateral into one 'Yes' conditional token and one 'No' conditional token lets each be traded separately, with their combined market prices reflecting the perceived probability of each outcome.
Confidential Transaction
A privacy technique that hides a transaction's amount from public view while still letting the network verify it's mathematically valid.
A confidential transaction's amount is hidden from public view, while the network can still mathematically confirm no funds were created from nothing.
Confirmation
A block added on top of the one containing a transaction, adding confidence it's permanent.
An exchange might require several confirmations before crediting a deposit to a user's account.
Consensus Finality
The point at which a transaction or block is considered permanently, irreversibly settled.
A network with fast, absolute finality doesn't require waiting through multiple confirmations for certainty.
Consensus Layer
The part of Ethereum's post-Merge architecture responsible for validator coordination, block proposal, and finality under Proof of Stake.
Validator coordination and block finality happen on Ethereum's consensus layer, not its execution layer.
Consensus Mechanism
The rules a network uses to agree on which transactions and blocks are valid.
Bitcoin's consensus mechanism is proof of work; Ethereum's is proof of stake.
Consortium Blockchain
A permissioned blockchain jointly controlled and validated by a defined group of organizations, rather than a single company or an open, permissionless set of participants.
A group of banks might jointly operate a consortium blockchain for interbank settlement, with each bank running a validating node under agreed-upon shared governance rules.
Constructive Receipt
A tax principle holding that income is taxable once a taxpayer has the ability to access or control it, even if they haven't physically taken possession yet.
Staking rewards that are immediately transferable to a holder's own wallet are generally considered to be in the holder's constructive receipt at that point, even if the holder never moves or sells them.
Contagion (Financial)
The spread of financial distress from one entity to others, through direct exposure, shared counterparties, or a broader loss of confidence.
Financial contagion can spread even to entities with no direct dealings with the original failure, purely through a broader loss of confidence in similar platforms.
Contango
A market condition where a futures contract trades above the current spot price, commonly reflecting the cost of holding a position until expiry.
A futures contract trading noticeably above spot price is a market in contango, the condition a cash-and-carry trade is designed to profit from.
Content Addressing
Identifying stored data by a hash of its actual content, rather than its storage location.
A content-addressed file's identifier changes automatically if its underlying content is altered.
Controlled Foreign Corporation Rules
Anti-avoidance rules that can tax a domestic shareholder on a foreign company's income directly, even before that income is actually distributed to them.
CFC rules can tax a domestic shareholder on a foreign holding company's crypto gains directly, even if those gains were never actually distributed out of the company.
Conviction Voting
A governance model where voting power on a proposal grows the longer it stays supported.
Under conviction voting, a proposal steadily supported over time can accumulate more effective voting weight.
Coppock Curve
A long-term momentum indicator combining two rate-of-change calculations, originally designed to identify major market buying opportunities.
The Coppock Curve turning upward from a deeply negative reading is its classic, historically-cited long-term buy signal.
Copy Trading
A feature that automatically replicates another trader's positions in a user's own account, generally in proportion to the user's own allocated funds.
A follower allocates $1,000 to a lead trader whose account holds $10,000, in proportional mode; when the lead trader opens a $2,000 position (20% of their account), the copy opens a position of about $200 (20% of the follower's allocation).
Correlation
A measure of how closely two assets' prices tend to move together.
Two assets with historically low correlation may not both decline sharply at the same time.
Correlation Coefficient
A statistical measure, ranging from -1 to 1, of how closely two assets' price movements track each other, used to gauge diversification benefit within a portfolio.
A portfolio combining assets with a correlation coefficient near 0 generally experiences lower overall volatility than the same combined exposure concentrated in highly correlated assets.
Cost Basis
Generally what you originally paid to acquire an asset, used to work out a gain or loss later.
If a unit of cryptocurrency was bought for $100 and later sold for $150, the $100 purchase price is generally its cost basis.
Counterparty Risk
The risk that the other party in a financial arrangement fails to meet their obligations, independent of how the underlying asset itself performs.
Holding an asset on a centralized exchange introduces counterparty risk specific to that exchange, on top of the asset's own ordinary price risk.
Covenant (Bitcoin Script)
A proposed Bitcoin scripting capability that would let a transaction restrict how the funds it creates can be spent in the future.
A covenant-enabled transaction could in principle restrict its own future spending conditions in ways Bitcoin's current scripting language doesn't natively support.
Covered Call
An options strategy where an investor holding an asset sells a call option against it, collecting a premium in exchange for capping their upside if the price rises above the strike.
An investor holding Bitcoin might sell a covered call against it, collecting premium income but agreeing to sell at the strike price if Bitcoin rallies above it before expiration.
Credible Neutrality
A design property of a system or rule set that treats all participants by the same transparent, predictable standard, without favoring any individual or group.
A base-layer blockchain protocol that applies identical transaction-ordering rules to every participant, regardless of who they are, is exhibiting credible neutrality.
Cross Margin
A margin mode where a trader's entire account balance backs all open leveraged positions together.
A trader using cross margin has their full account balance available to support each open position.
Cross-Chain Bridge
A system that lets assets or data move between two different blockchain networks.
A cross-chain bridge might let a user move a token from Ethereum to a different Layer 1 network.
Crossover
When one line on a chart moves from one side of another line to the other.
A 50-period moving average crossing above a 200-period moving average is a widely referenced bullish crossover sometimes called a "golden cross."
Crypto Debit Card
A payment card linked to a crypto balance that automatically converts crypto to fiat currency at the point of sale, letting holders spend crypto at ordinary merchants.
A crypto debit card automatically converts a small amount of a user's Bitcoin balance into fiat currency the instant it's used to pay for a purchase at an ordinary merchant.
Crypto Options
A derivative contract granting the right, but not the obligation, to buy or sell a crypto asset at a set price.
A crypto option buyer's maximum possible loss is generally limited to the premium they paid.
Crypto Winter
An informal term for an extended period of declining prices and reduced activity across the broader crypto market, generally lasting many months or longer.
Crypto winter is generally understood as a more prolonged, severe downturn than an ordinary bear market, though the term has no single formal definition.
Crypto-Asset Service Provider
The specific authorisation category MiCA uses for regulated crypto businesses in the EU.
An exchange seeking to operate across multiple EU countries applies for CASP authorisation once, from a single national competent authority.
Cryptocurrency
A digital asset that uses cryptography and a blockchain to record ownership and transfers.
Bitcoin and Ethereum are both examples of cryptocurrencies, each with different designs and goals.
Cryptojacking
The unauthorized use of someone else's computer, server, or device to mine cryptocurrency without their knowledge or consent, typically through malware or a compromised website.
A compromised website running hidden cryptojacking JavaScript can quietly mine cryptocurrency using a visitor's CPU for as long as they keep the browser tab open.
Cup and Handle Pattern
A chart pattern resembling a rounded bowl (the cup) followed by a small downward drift (the handle), generally interpreted as a bullish continuation signal once price breaks above the pattern's rim.
A cup and handle pattern is generally considered confirmed once price breaks decisively above the resistance level formed by the cup's original rim, following the smaller handle consolidation.
Currency Transaction Report (CTR)
A mandatory report financial institutions must file for cash or cash-equivalent transactions above a specified threshold, used to support anti-money-laundering oversight.
A crypto exchange processing a customer's large cash deposit above the regulatory threshold is required to file a Currency Transaction Report, regardless of whether the deposit looks suspicious.
Current Ratio
Current assets divided by current liabilities, a standard measure of a company's short-term liquidity.
A Current Ratio below 1 means a company's near-term liabilities exceed its near-term assets, a potential short-term liquidity warning sign worth investigating further.
Curve Wars
The competition among DeFi protocols to accumulate voting power over a vote-escrowed governance token, in order to direct its liquidity incentives toward their own pools.
During the Curve Wars, several protocols competed to accumulate the largest possible locked positions specifically to control gauge-voting outcomes in their own favor.
Custodial Insurance
An insurance policy a crypto custodian purchases to cover losses from theft, hacking, or employee misconduct affecting customer assets held in its custody.
A custodian's custodial insurance policy might cover losses from external hacking affecting its cold storage holdings specifically, while excluding certain hot wallet balances or other specific scenarios.
Custodial Wallet
A wallet where a third party holds and controls the private keys on your behalf.
Funds held in an account on a centralized exchange are typically held in a custodial wallet.
Custody
Who actually holds and controls the private keys to a set of crypto assets.
A person using a hardware wallet has custody of their own assets directly.
Custody Risk
The risk of losing access to, or the value of, crypto assets because of how and by whom they are held — whether by a third-party custodian or by yourself.
An investor who keeps all their crypto on one exchange carries that exchange's custody risk in full: if it becomes insolvent, getting the assets back can depend on court proceedings rather than a simple withdrawal.
D
Danksharding
A planned Ethereum scaling design intended to dramatically increase data availability capacity.
Danksharding is designed primarily to make posting Layer 2 data to Ethereum cheaper and more scalable.
DAO
A decentralized autonomous organization coordinated through code and member voting.
A DAO might vote on how to allocate funds from a shared treasury.
DAO Treasury
The pool of assets a decentralized autonomous organization collectively owns and controls through its governance process, used to fund operations, grants, and strategic initiatives.
A DAO treasury's reported total value can be misleading if a large share consists of the DAO's own native token, which may not be easily sellable in size without affecting its own price.
Dark Pool
A private trading venue where order details are not publicly visible before execution.
A large trade routed through a dark pool doesn't reveal its size on the public order book beforehand.
Data Availability
Whether the data needed to verify a blockchain's state is actually accessible to the network.
A rollup posting full transaction data to its base chain is prioritizing data availability over cost savings.
Data Availability Committee (DAC)
A designated group of parties responsible for holding and attesting to the availability of a validium's off-chain transaction data, since the base chain itself doesn't store it.
A validium relying on a Data Availability Committee depends on that committee's members remaining honest and operational to guarantee users can retrieve the off-chain data needed to prove their balances.
Data Availability Sampling
A technique that lets a node verify a block's full data was genuinely published by checking only a small random sample of it, rather than downloading everything.
A node using data availability sampling can gain strong statistical confidence that a block's full data is available, without downloading the entire dataset itself.
Day Trading
A trading style that opens and closes all positions within the same day, never holding a position overnight.
A day trader closes every position before the end of their trading session, never carrying one overnight.
De Minimis Exemption
A tax rule exempting gains or transactions below a small, specified threshold from reporting or tax liability, reducing compliance burden for minor transactions.
A de minimis exemption for crypto transactions under a certain dollar threshold would let someone buy a cup of coffee with crypto without needing to calculate and report a separate capital gain or loss on that spend.
Dead Cat Bounce
A short-lived price recovery during an ongoing downtrend, which fails to reverse the trend and is followed by renewed decline.
A sharp recovery during a downtrend that's later followed by a renewed decline to new lows is, in hindsight, commonly labeled a dead cat bounce.
Dead Man's Switch
A mechanism that releases pre-arranged access or instructions to designated heirs if a holder stops periodically checking in.
A time-locked dead man's switch built with Bitcoin Script can release access automatically if its holder doesn't periodically reset the timer.
Debt Ceiling
A protocol-set maximum amount of debt that can be issued against a specific collateral type or market, limiting the lending protocol's total exposure to that asset.
A lending protocol might set a conservative debt ceiling for a newly listed, more volatile collateral asset, only raising it gradually as the asset demonstrates sustained liquidity and price stability.
Debt-to-Equity Ratio
Total debt divided by shareholder equity, a standard measure of a company's financial leverage.
A high Debt-to-Equity ratio means a company relies heavily on borrowed capital relative to shareholder equity, amplifying both potential returns and potential losses.
Decentralization
Spreading control across many independent participants instead of one central party.
A network run by thousands of independent, geographically spread nodes is generally more decentralized than one run by a handful of servers.
Decentralized Compute
Computing power, such as GPU processing for AI workloads, sourced from a distributed network of independent providers and coordinated through a blockchain-based marketplace.
A decentralized compute network might let someone with an idle GPU rent it out for AI model training, earning token rewards coordinated through a blockchain-based marketplace.
Decentralized Exchange
A trading platform where trades execute through code, without a central operator holding funds.
Many decentralized exchanges use an automated market maker model instead of a traditional order book.
Decentralized Identifier (DID)
A globally unique identifier that a person or entity creates and controls directly, without depending on any centralized registry or authority to issue or validate it.
A user controlling a DID through their own cryptographic keys retains that identifier regardless of whether any specific company or service provider they've interacted with shuts down or revokes their access.
Decentralized Identity
An identity model where an individual controls their own credentials rather than a central authority.
A decentralized identity credential can be verified without necessarily sharing every underlying detail.
Decentralized Oracle Network
A system where multiple independent nodes each report external data, which is then aggregated into a single, harder-to-manipulate value for smart contracts to use.
A decentralized oracle network's aggregated price is harder to manipulate than a single data source, since an attacker would need to compromise many independent nodes at once.
Decentralized Storage
A data storage system spread across many independent nodes rather than one central server.
NFT images are commonly stored on decentralized storage rather than directly on-chain, due to cost.
DeFi
Blockchain-based financial applications that use smart contracts instead of relying entirely on traditional intermediaries.
A decentralised exchange can let users trade against a liquidity pool.
DeFi Insurance
Decentralized cover against a specific DeFi risk, such as a smart contract exploit, typically paid out through community voting rather than a legal guarantee.
A DeFi user might purchase cover against a specific lending protocol being exploited, paying an ongoing premium for that protection.
DeFi Options Vault (DOV)
A DeFi product that automates running an options-selling strategy, such as a covered call, on depositors' funds and distributes the resulting premium income.
A depositor in a covered-call DOV earns premium income each cycle but still forgoes any price appreciation above the strike the vault sold options against.
Deflationary Token
A token whose total supply decreases over time, generally through an ongoing burn mechanism, as opposed to one whose supply grows through issuance.
Ethereum's net issuance can turn deflationary during periods of high network activity, when EIP-1559's fee burn exceeds new issuance to validators.
Delegate
Someone entrusted with another token holder's voting power in a governance system.
A token holder might delegate their voting power to a delegate who actively follows governance proposals.
Delegated Proof of Stake
A consensus model where token holders vote to elect a smaller set of validators.
Token holders in a delegated proof of stake network vote for a limited number of validators to represent them.
Delegation (Staking)
Assigning your stake to a validator without running your own validating infrastructure.
Delegating to a validator lets a token holder earn staking rewards without running their own node.
Delta Neutral
A portfolio position structured to be largely unaffected by the underlying asset's price movement.
A delta-neutral strategy might combine a spot holding with an offsetting short position to cancel out price-direction risk.
DEMA and TEMA (Double and Triple Exponential Moving Average)
Moving averages that apply EMA calculations multiple times and combine them with a specific formula to further reduce lag compared to a single EMA.
TEMA generally reacts to a price change faster than DEMA, which in turn reacts faster than a standard single EMA of the same length.
Depeg
When a stablecoin's market price moves meaningfully away from its intended target value.
A stablecoin trading meaningfully below its intended $1 target is said to have depegged.
Dependency Confusion
A software supply chain attack that tricks a build system into installing a malicious public package instead of an intended internal one, by exploiting naming or versioning ambiguity.
An attacker could publish a malicious public package sharing the same name as a crypto exchange's internal package, hoping the exchange's build system mistakenly installs the malicious public version instead.
DePIN
Decentralized Physical Infrastructure Networks — projects that use token incentives to crowdsource real-world physical infrastructure.
A DePIN wireless network might reward individual participants with tokens for hosting a hotspot that provides coverage to the broader network.
Derivation Path
A formula a wallet uses to generate many key pairs from a single seed phrase.
Restoring a wallet from a seed phrase in compatible software should reproduce the same addresses via the same derivation path.
Detrended Price Oscillator (DPO)
An oscillator that removes an asset's longer-term trend from price, specifically to highlight shorter-term price cycles.
DPO is specifically designed to reveal shorter-term cycles that a longer-term trend would otherwise obscure, not to indicate overall trend direction.
DEX Aggregator
A platform that searches across many decentralized exchanges and liquidity sources to find and execute the best available price for a given swap.
A DEX aggregator might split a large swap across three different liquidity pools simultaneously, achieving a better combined price than routing the entire trade through just one pool.
Diamond Hands vs. Paper Hands
Crypto community slang contrasting holding a position firmly through volatility (diamond hands) with selling quickly out of fear during a downturn (paper hands).
An investor described as having diamond hands held their position through a sharp 50% drawdown, while one described as having paper hands sold near the bottom out of panic.
Diamond Standard (EIP-2535)
An Ethereum smart contract pattern letting a single contract address delegate calls across multiple logic contracts ('facets'), enabling modular, piecewise upgrades.
A protocol using the Diamond Standard can upgrade just its fee-calculation facet without touching or redeploying any of its other logic facets.
Difficulty Adjustment
An automatic recalibration that keeps block production time roughly consistent.
Bitcoin's difficulty adjustment recalibrates roughly every two weeks based on recent block times.
Difficulty Bomb
A mechanism designed to make mining exponentially harder to force a network transition.
Ethereum's difficulty bomb was delayed multiple times before the network's actual transition to proof of stake.
Digital Signature
Cryptographic proof that a message or transaction was authorized by a specific private key holder.
Every crypto transaction includes a digital signature proving it was authorized by the sender's private key.
Directional Movement
The portion of a period's price range that represents upward or downward movement beyond the prior period.
A period that sets a new high higher than the prior period's high has positive directional movement.
Distributed Hash Table (DHT)
A decentralized system for storing and locating data across many participating nodes, with no single node holding the complete index.
A node looking up a specific piece of data in a DHT queries other nodes progressively closer to the data's location in the table, without needing a central directory.
Distributed Validator Technology (DVT)
A technology that splits a single validator's signing key across multiple independent operators, reducing the risk of any single operator's failure causing slashing.
A DVT-distributed validator can generally continue operating correctly even if one of its multiple independent operators goes offline.
Distribution Phase
A market phase, generally following a rally, where informed or early holders steadily sell into strength while broader sentiment remains optimistic.
A distribution phase is commonly described as early holders steadily selling into continued market strength while broader sentiment remains optimistic.
Diversification
Spreading holdings across different assets rather than concentrating in just one.
Holding several different assets instead of one is a basic example of diversification.
DNS Hijacking
An attack that redirects a legitimate website's domain name to a malicious server, tricking visitors into interacting with a convincing fake version of the real site.
A DNS hijacking attack against a DeFi protocol's front-end domain redirected users typing the correct, familiar web address to a convincing fake site that drained connected wallets.
Doji
A single candlestick with a very small body, where the opening and closing prices are nearly identical, reflecting indecision between buyers and sellers over that period.
A doji forming after a long, sustained uptrend is often watched as an early warning sign that buying momentum may be fading, rather than as a guaranteed reversal signal on its own.
Dollar-Cost Averaging
Investing a fixed amount at regular intervals instead of all at once.
Investing a fixed amount every month, regardless of the current price, is a common dollar-cost averaging approach.
Dollar-Weighted Return
A return measure that accounts for the timing and size of each individual deposit.
An investor who added funds right before a decline will have a lower dollar-weighted return than the asset's own performance alone would suggest.
Donchian Channels
Bands plotted at the highest high and lowest low over a lookback period, commonly used to identify breakouts from a recent trading range.
Price closing above the upper Donchian Channel means it has reached its highest level of the entire lookback period, a classic breakout signal.
Donor-Advised Fund
A charitable-giving account that lets a donor contribute assets, including appreciated crypto, claim an immediate tax deduction, and recommend grants to charities over time.
A crypto holder with significant unrealized gains might donate appreciated tokens directly to a donor-advised fund, potentially avoiding the capital gains tax that selling the tokens first would have triggered.
Double Taxation Agreement
A treaty between two countries intended to prevent the same income from being taxed twice, once in each country, for a person with ties to both.
A Double Taxation Agreement between two countries might specify that capital gains are taxed only in the taxpayer's country of residence, not in both.
Double Top and Double Bottom
Chart patterns where price tests the same resistance or support level twice without breaking through, commonly interpreted as a signal of a potential trend reversal.
A double top pattern where the second peak occurs on noticeably lower volume than the first is generally considered a more credible reversal signal than one where volume stayed roughly the same.
Double-Spending
Successfully spending the same digital funds more than once.
Waiting for multiple confirmations before treating a large transaction as final reduces double-spending risk.
Dow Theory
A foundational set of principles about how markets move in trends, confirmed across related indices, and signal their own reversals, underlying much of modern technical analysis.
Dow Theory's principle that a trend remains in effect until clear, decisive evidence of reversal appears underlies the general technical-analysis practice of requiring confirmation before declaring a trend change.
Drawdown
The percentage decline from a portfolio or asset's peak value to a subsequent low point.
An asset that fell 60% from its all-time high experienced a 60% drawdown from that peak.
Drivechain
A proposed Bitcoin sidechain framework in which Bitcoin miners, rather than a separate federation, vote to approve peg-ins and peg-outs between the mainchain and sidechains.
Under Drivechain, a sidechain withdrawal would need sustained miner approval signaling over an extended period before being finalized, giving the community a window to object to a fraudulent request.
Dust Limit
The smallest transaction output amount a network's nodes will typically relay.
An attempted transaction output below the dust limit is typically rejected by network nodes.
Dusting Attack
Sending tiny amounts of crypto to many addresses to try to de-anonymize their owners.
Receiving an unexpected tiny, unsolicited crypto deposit can be a sign of a dusting attack.
Dutch Auction
An auction that starts at a high price and lowers it over time until a buyer accepts, commonly used for fairer token or NFT price discovery.
A Dutch auction token sale starts at a high price and lowers over time until participants begin buying, letting demand itself determine the clearing price.
Dynamic NFT
An NFT whose metadata or appearance can change based on external conditions.
A dynamic NFT representing a game character might visually change as the character levels up.
E
Earnings Growth Rate
The percentage change in a company's earnings over a period, measuring bottom-line profitability expansion.
Earnings growth outpacing revenue growth over several periods can indicate improving operating margins, not just a larger business.
Earnings Yield
A company's earnings per share divided by its price per share — the inverse of the P/E ratio.
A stock trading at a P/E of 25 has an earnings yield of 4% (1 ÷ 25).
Ease of Movement (EMV)
An indicator relating price change to volume, showing how easily price moved — a large move on low volume signals 'ease,' a small move on high volume doesn't.
A high EMV reading means price moved a large distance on comparatively light volume — moving "easily," in the indicator's own terms.
ECDSA
The Elliptic Curve Digital Signature Algorithm, the cryptographic signing scheme that Bitcoin and (for externally owned accounts) Ethereum use to authorize transactions.
Every Bitcoin transaction is authorized by an ECDSA signature, proving the spender controls the private key corresponding to the funds being spent.
Eclipse Attack
Isolating a specific node so it only sees connections controlled by the attacker.
An eclipse attack targets a specific node's view of the network, not the network's global consensus directly.
Economic Security
The total financial cost an attacker would need to bear to successfully compromise a blockchain's consensus, such as by acquiring enough stake or hash power.
A proof-of-stake chain's economic security roughly scales with the total value of staked tokens, since an attacker would generally need to acquire a large share of that stake to compromise consensus.
Effective Tax Rate
The actual average tax rate paid, calculated as total tax owed divided by total taxable income or gain -- distinct from a marginal or headline tax rate.
A taxpayer's effective tax rate is generally lower than their top marginal rate in a progressive system, since only income within the top bracket is taxed at that rate.
EIP (Ethereum Improvement Proposal)
A formal design document proposing a new feature, standard, or process change for Ethereum, reviewed and discussed by the community before potential adoption.
EIP-1559 is commonly referenced directly by its proposal number, since it introduced Ethereum's current base-fee-and-burn transaction fee mechanism.
EIP-1559
An Ethereum upgrade that restructured transaction fees into a burned base fee that adjusts automatically with network demand, plus an optional priority fee tip to the block producer.
During a period of unusually high Ethereum network demand, EIP-1559's burned base fee can remove enough ETH from circulation to offset or even exceed new issuance from staking rewards.
EIP-2612 (Permit)
An Ethereum token standard letting a user approve a spender through an off-chain signature instead of a separate on-chain transaction, saving a step and its gas cost.
A DeFi app supporting EIP-2612 can let a user approve and swap a token in a single transaction, rather than requiring a separate approval transaction beforehand.
EIP-2981 (NFT Royalty Standard)
An Ethereum standard letting an NFT contract specify a royalty percentage and recipient address on-chain, giving marketplaces a consistent way to look up royalty terms for any compliant NFT.
An NFT collection implementing EIP-2981 lets any compliant marketplace automatically look up its specified royalty percentage and recipient address, rather than each marketplace needing its own separate system.
EIP-712 (Typed Structured Data Signing)
An Ethereum standard for signing structured, human-readable data rather than an opaque hash, letting wallets display exactly what a user is approving.
A wallet supporting EIP-712 can show a user a clearly labeled breakdown of exactly what token, amount, and spender they're approving, rather than an unreadable raw data hash.
EIP-7702
An Ethereum upgrade letting a standard externally owned account temporarily attach smart contract code to itself, gaining programmable features without needing a separate smart account.
A user could use EIP-7702 to temporarily attach smart contract logic to their existing externally owned account, gaining features like transaction batching without needing to migrate to a new smart account address.
Elder Ray Index (Bull Power and Bear Power)
Two indicators measuring how far a period's high and low sit above and below an EMA, used to gauge buying and selling pressure relative to trend.
Bull Power and Bear Power are both measured relative to the same underlying EMA, which represents the prevailing trend.
Elliott Wave Theory
A technical analysis framework proposing that prices move in recognizable, repeating patterns of five waves in the direction of the main trend followed by three corrective waves against it.
An Elliott Wave analyst might label a price history as being in the third of five impulse waves, implying a larger continuation is still likely before a corrective phase begins.
Elliptic Curve Cryptography
The mathematical basis most crypto wallets use to generate key pairs.
Bitcoin and Ethereum both rely on elliptic curve cryptography to generate and verify key pairs.
Emission Schedule
The predetermined plan governing how many new tokens a protocol creates and distributes over time, including how that rate changes as the protocol matures.
Bitcoin's emission schedule is fully predetermined and public, letting anyone calculate exactly how many new bitcoin will be issued at any future block height.
Endowment
A pool of donated funds, commonly held by a university or nonprofit, invested to generate long-term income, some of which have begun allocating a small portion to crypto assets.
A university endowment allocating to crypto-focused venture funds is sometimes cited as a notable institutional-adoption signal, echoing how endowments historically helped validate venture capital as a mainstream asset class.
English Auction
The traditional ascending-price auction format, where bidding starts low and rises until the highest bidder wins.
An NFT sale structured as an English auction lets bidders see and respond to competing bids, with the highest bid ultimately winning.
Engulfing Pattern
A two-candlestick pattern where the second candle's body completely engulfs the prior candle's body, interpreted as a signal that momentum has decisively shifted direction.
A bullish engulfing pattern forming at the end of a sustained downtrend, on unusually high volume, is generally considered a more significant reversal signal than the same pattern forming in a quiet, directionless market.
Enhanced Due Diligence (EDD)
A deeper, more thorough compliance review applied to higher-risk customers or transactions, going beyond a financial institution's standard identity verification and monitoring.
A crypto exchange customer whose transaction monitoring flags unusually large or complex activity might be escalated into enhanced due diligence, requiring additional source-of-funds documentation.
Enterprise Value (EV)
A company's total value including debt -- market capitalization plus debt, minus cash -- used as the basis for several other valuation ratios.
Two companies with identical market capitalizations can have very different Enterprise Values if one carries significantly more debt than the other.
Entity Clustering
An on-chain analysis technique that groups multiple wallet addresses believed to be controlled by the same real-world entity.
Entity clustering might group dozens of separate addresses together, revealing they're all controlled by the same exchange or large holder.
Epoch
A fixed period of time or set number of blocks used to organize validator duties in proof of stake.
A proof-of-stake network might organize its validator schedule into epochs of a fixed number of slots.
ERC-1155
A token standard that lets a single contract manage both fungible and non-fungible tokens.
A game might use ERC-1155 to manage both stackable in-game currency and unique item NFTs in one contract.
ERC-20
The technical standard most fungible tokens on Ethereum follow.
Most stablecoins and governance tokens on Ethereum are issued as ERC-20 tokens.
ERC-4337 (Account Abstraction)
The Ethereum standard implementing account abstraction without requiring any changes to Ethereum's core consensus protocol, using a separate mempool and bundler system to process smart account transactions.
A smart account wallet implementing ERC-4337 processes its programmable transaction logic through a separate mempool and bundler system, without requiring any change to Ethereum's core consensus rules.
ERC-4626
An Ethereum token standard defining a common interface for yield-bearing vaults, making it easier for other protocols and interfaces to integrate with any vault that follows it.
A yield aggregator can integrate with any ERC-4626-compliant vault using the same standard deposit and withdrawal logic, rather than writing custom code for each individual vault.
ERC-721
The technical standard most non-fungible tokens (NFTs) on Ethereum follow.
Most digital art and collectible NFT projects are issued as ERC-721 tokens.
Escrow
An arrangement where an asset is held by a neutral third party or smart contract until predetermined conditions are met, at which point it's released to the appropriate party.
A peer-to-peer crypto trade might use a smart contract escrow to hold one party's funds until the other party confirms delivery of their side of the trade, protecting both participants.
Estate Tax
A tax levied on the total value of a deceased person's assets, including crypto, before those assets are distributed to heirs.
A deceased person's crypto holdings are typically valued at their fair market value as of the date of death when calculating the overall estate tax owed.
Ethereum
A public blockchain for transactions and programmable applications, with ether as its native asset.
A user pays a gas fee in ETH when interacting with many Ethereum applications.
Ethereum Virtual Machine
The runtime environment that executes smart contract code on Ethereum.
A smart contract compiled to run on the EVM will produce identical results on any EVM-compatible network.
EV/EBITDA
A capital-structure-neutral valuation multiple comparing Enterprise Value to earnings before interest, taxes, depreciation, and amortization.
EV/EBITDA is commonly used to compare companies with different debt levels more fairly than P/E, since both EV and EBITDA are structured to be capital-structure-neutral.
Exchange Netflow
The difference between the amount of an asset flowing into exchange wallets and the amount flowing out, over a given period.
A sustained period of positive exchange netflow for an asset is commonly watched as one input among several when assessing potential selling pressure.
Execution Layer
The part of Ethereum's post-Merge architecture responsible for processing transactions and running smart contracts.
Smart contract execution and transaction processing happen on Ethereum's execution layer, not its consensus layer.
Exit Liquidity
A description for later buyers whose purchases effectively provide the liquidity that lets earlier holders sell out at a favorable price.
Buyers who enter near the top of a pump and dump scheme, right before organizers sell, are commonly described afterward as having been the exit liquidity.
Exit Scam
When a project's team abruptly abandons it and disappears with user funds, without warning and without any attempt to continue operating.
Several crypto lending platforms and exchanges have exit-scammed by halting withdrawals and going silent while still holding customer deposits.
Exit Tax
A tax some jurisdictions impose on unrealized gains when a person ceases to be a tax resident, treating the departure itself as a deemed disposal.
An exit tax can create a real tax bill on unrealized crypto gains at the moment someone ceases to be a tax resident, even without an actual sale taking place.
Exponential Moving Average (EMA)
A moving average that weights recent prices more heavily than older ones, making it react faster to new price changes than a simple average.
A 12-period and 26-period EMA are the two building blocks used to calculate the MACD indicator.
Extended Public Key
A key that lets someone generate and view all addresses in an HD wallet, without spending access.
Sharing an extended public key lets someone view all of a wallet's addresses without any spending access.
F
Fair Launch
A token launch with no early or privileged allocation for the team or investors.
A fair launch project has no team or investor allocation acquired ahead of the public.
Fake Wallet App
A malicious application disguised as a legitimate crypto wallet, designed to steal a victim's funds or seed phrase once they enter it or deposit assets.
A fake wallet app closely mimicking a popular legitimate wallet's branding tricked users into entering their seed phrase, which the attacker then used to drain their funds.
Family Office
A private wealth-management organization serving a single wealthy family or a small group of families, increasingly used as a vehicle for direct institutional crypto exposure.
A family office managing a wealthy family's assets might allocate a portion of its portfolio directly to Bitcoin and other major cryptocurrencies alongside its traditional holdings.
FATCA
A US law requiring foreign financial institutions to report US account holders' assets, including crypto held through certain foreign platforms, to US tax authorities.
A US person holding crypto through certain foreign exchanges or platforms may have that holding reported to US tax authorities under FATCA.
Faucet (Testnet)
A free service that dispenses small amounts of testnet cryptocurrency, letting developers test transactions and smart contracts without risking real funds.
A developer building and testing a new smart contract might first request testnet tokens from a faucet to pay for the gas needed to deploy and interact with it.
Fear and Greed Index
A composite sentiment indicator, scaled 0 to 100, combining several market data inputs into a single reading intended to gauge whether the market is fearful or greedy.
A Fear and Greed Index reading near 0 reflects extreme fear in the underlying market data; a reading near 100 reflects extreme greed.
Federated Peg
A two-way peg design where a defined federation of signers jointly controls the locked base-chain funds and authorizes peg-ins and peg-outs.
The Liquid Network uses a federated peg, where a defined group of functionaries jointly controls the multisig holding pegged-in Bitcoin.
Fee Switch
A governance-controlled mechanism letting a protocol toggle on (or adjust) a share of its trading or usage fees to flow to its token holders or treasury, rather than only to liquidity providers.
A DAO might vote to activate its protocol's fee switch, redirecting a portion of trading fees away from liquidity providers and toward the token's treasury instead.
Fiat-Collateralized Stablecoin
A stablecoin backed by traditional fiat-currency reserves, generally held by the issuer and periodically attested to by a third party.
A fiat-collateralized stablecoin's peg ultimately depends on the issuer actually holding sufficient, genuine reserves — not on an on-chain mechanism alone.
Fibonacci Retracement and Extension
Horizontal levels drawn between a significant high and low at ratios derived from the Fibonacci sequence, used to identify potential support/resistance.
The 61.8% Fibonacci retracement level is commonly discussed as a particularly significant level for a pullback to find support within an ongoing uptrend.
FIFO
First in, first out — one general method for deciding which units of an asset were sold.
Under FIFO, if someone bought crypto at three different times and later sold some, the earliest purchase is treated as sold first.
Fill-or-Kill (FOK)
An order instruction requiring the entire order to execute immediately in full, or be canceled entirely with no partial fill.
A Fill-or-Kill order for a size larger than the currently available liquidity is canceled entirely, rather than partially filling and leaving the remainder unexecuted.
Finality
The point at which a transaction is considered permanent and extremely unlikely to be reversed.
Waiting for more block confirmations generally increases a transaction's practical finality.
Finality Gadget
A consensus mechanism layered on top of a base block-production process specifically to formally finalize blocks, making them irreversible.
A finality gadget can formally finalize a batch of already-produced blocks, providing a stronger irreversibility guarantee than simply waiting for more confirmations.
Financial Action Task Force (FATF)
An intergovernmental organization that sets global standards for combating money laundering and terrorist financing, including specific guidance on crypto asset service providers.
FATF's guidance on virtual asset service providers has directly shaped Travel Rule implementation requirements for crypto exchanges across many different countries.
FinCEN
The U.S. Treasury Department bureau responsible for administering anti-money-laundering regulations, including guidance applying those rules to crypto businesses.
A crypto exchange facilitating customer trades is generally required to register with FinCEN as a money services business and maintain an anti-money-laundering compliance program.
Fisher Transform
A mathematical transformation that reshapes price data to more closely resemble a normal distribution, making turning points sharper and clearer.
The Fisher Transform's extreme readings are intended to stand out more sharply than an equivalent extreme in an untransformed price oscillator.
Fixed-Rate Lending
A DeFi lending arrangement where the interest rate is locked in for a set term, rather than fluctuating with a pool's changing utilization rate.
A borrower choosing fixed-rate lending knows their exact interest cost for the full loan term upfront, rather than being exposed to the pool's fluctuating variable rate.
Flag and Pennant Pattern
Short-term consolidation patterns that typically form after a sharp price move, generally interpreted as a brief pause before the prior trend resumes in the same direction.
A bull flag forming after a sharp rally, followed by a brief consolidation sloping slightly downward, is generally interpreted as a pause before the rally resumes rather than a reversal.
Flash Loan
An uncollateralized loan that must be borrowed and repaid within a single transaction.
A flash loan might be used to exploit a brief price difference between two exchanges within one transaction.
Flash Loan Attack
An exploit that uses a flash loan's large, temporary, capital-free borrowing power to manipulate a price feed or exploit a protocol's logic within a single transaction, then repays the loan before it reverts.
A flash loan attack might briefly borrow an enormous sum to distort a thinly liquid price feed, triggering a mispriced loan or liquidation elsewhere before repaying the flash loan within the same transaction.
Flash Mint
A mechanism allowing a protocol to temporarily mint new tokens within a single transaction, provided they're burned or repaid before the transaction completes.
MakerDAO's Flash Mint Module lets users mint large, temporary amounts of DAI within a single transaction for arbitrage or liquidation purposes, provided the DAI is returned before the transaction ends.
Flash Swap
A DeFi mechanism letting a user withdraw tokens from a liquidity pool upfront and pay (or return them) later in the same transaction, as long as the pool is made whole by the end.
An arbitrageur might use a flash swap to withdraw one token from a pool, sell it elsewhere for a different token, and use the proceeds to settle the original swap, all within one transaction.
Flat Tax
A tax system that applies a single, constant rate to all income or gains, regardless of amount -- the structural alternative to a progressive tax system.
A jurisdiction might use a progressive structure for ordinary employment income while applying a single flat rate specifically to capital gains, including crypto gains.
Flippening
A hypothetical future event in which Ethereum's market capitalization surpasses Bitcoin's, making it the largest cryptocurrency by that measure.
Proponents of a potential flippening often point to Ethereum's broader smart contract utility as a reason its market cap could eventually surpass Bitcoin's.
Floor Price
The lowest currently listed asking price within an NFT collection.
A collection's floor price rising can indicate increasing demand for even its least expensive items.
Floor Sweep
Buying up a large number of an NFT collection's lowest-priced listings at once, often causing the floor price to rise sharply.
A floor sweep can cause a collection's floor price to jump sharply within minutes, as the cheapest available listings are bought up all at once.
FOMO (Fear of Missing Out)
The anxiety-driven impulse to buy an asset during a rapid price rise, out of fear of missing further gains, often cited as a key driver of buying near market tops.
A trader buying into a sharp rally purely because of anxiety about missing further gains, without any independent evaluation of the asset, is exhibiting FOMO-driven behavior.
Force Index
An indicator combining a price move's size, direction, and volume into a single value measuring the force behind it.
A large price move on unusually low volume produces a comparatively weak Force Index reading, flagging it as less significant than its size alone suggests.
Forced Inclusion
A mechanism letting a user submit a transaction directly through a Layer 2's base layer, bypassing a potentially censoring or unresponsive sequencer.
A user whose transaction is being censored by a Layer 2's sequencer can use forced inclusion to submit it directly through the base layer instead.
Foreign Tax Credit
A credit that reduces domestic tax owed by the amount of tax already paid to a foreign jurisdiction on the same income, reducing double taxation.
A foreign tax credit lets a taxpayer offset domestic tax owed by tax already paid abroad on the same crypto gain, rather than paying the full amount twice.
Fork Choice Rule
The algorithm a node uses to decide which of multiple competing chain histories it should treat as the legitimate, canonical one.
Bitcoin's classic fork choice rule generally favors whichever valid chain has the most accumulated proof-of-work behind it.
Form 1099-DA
A U.S. tax information form that crypto brokers and exchanges are required to send, reporting a customer's digital asset sale proceeds directly to the IRS.
A centralized exchange issuing a Form 1099-DA reports a customer's crypto sale proceeds directly to the IRS, independent of whatever the customer reports themselves.
Form 8949
A U.S. tax form used to report each individual sale or disposal of a capital asset, including crypto, listing its cost basis, proceeds, and resulting gain or loss.
An active crypto trader with hundreds of individual trades during the year would need to list each one separately on Form 8949, specifying its cost basis, proceeds, and resulting gain or loss.
Formal Verification
A mathematical method of proving a smart contract's code behaves exactly as specified under every possible condition, rather than only testing selected scenarios.
Formal verification can mathematically prove a contract behaves correctly across every possible input, not just the specific scenarios an ordinary test suite happens to check.
Fractals and Swing High/Low
A specific multi-candle pattern (fractal) or more general concept (swing high/low) used to identify local turning points in price.
A bullish fractal forms when a candle's low is lower than the lows of the two candles on either side of it.
Fraction Token
A fungible token representing a proportional ownership claim on a single NFT locked in a vault.
Holding a fraction token gives a claim on the vault's value, not direct ownership of the NFT.
Fractionalized NFT
An NFT split into multiple fungible tokens representing partial ownership.
A high-value NFT might be fractionalized so multiple people can each own a partial share.
Fraud Proof
Evidence submitted during an optimistic rollup's challenge window demonstrating that a submitted batch of transactions was invalid.
A fraud proof must generally be submitted within an optimistic rollup's challenge window, or the disputed batch becomes final regardless of whether it was actually correct.
Free Cash Flow (FCF)
The cash a company generates from operations after capital expenditures -- what's actually left over to pay down debt, return to shareholders, or reinvest.
A company can report positive net income while having negative free cash flow, if its capital expenditures or working-capital needs are large enough.
Front-Running
Placing a transaction ahead of a known pending one to profit from its anticipated price impact.
A large pending swap visible in the mempool can attract front-running attempts.
FUD (Fear, Uncertainty, and Doubt)
Negative information, whether accurate or exaggerated, spread about a crypto project or the market generally, often used to describe commentary perceived as designed to provoke panic selling.
A project's supporters might dismiss a critical report about its security practices as FUD, even when the report raises legitimate, substantive concerns that deserve genuine scrutiny.
Full Node
A network participant that independently downloads and verifies the entire blockchain.
Running your own full node lets you verify transactions without trusting a third-party service.
Fully Diluted Valuation
A token's price multiplied by its maximum possible supply, not just current circulating supply.
A token with a large gap between its market cap and FDV has substantial future supply still to be issued.
Fully On-Chain NFT
An NFT whose entire image or media data is stored directly on the blockchain itself, rather than referencing an external file through a link or hash.
A fully on-chain NFT collection might generate each image as an SVG built entirely from on-chain code and data, so the artwork can always be reconstructed directly from the blockchain.
Fund of Funds
An investment fund that allocates its capital across a portfolio of other funds, such as multiple crypto hedge funds, rather than investing directly in individual assets itself.
An investor allocating to a crypto fund of funds gains diversified exposure across several underlying hedge funds through a single investment, rather than needing to separately evaluate and allocate to each one.
Funding Rate
A periodic payment between long and short traders that keeps a perpetual contract's price near spot.
A consistently positive funding rate can indicate more traders are positioned long than short.
Fungible Token
A token where each unit is identical and interchangeable with any other unit.
One bitcoin is interchangeable with any other bitcoin, making it a fungible asset.
Futarchy
A governance model that uses prediction markets to help decide policy outcomes.
A futarchy-based DAO might use prediction market pricing to decide between two competing proposals.
Future Value
The projected value of a current sum (or series of contributions) at a future date, after compounding at an assumed rate of return.
Future value projects how a starting amount plus regular monthly contributions grows over time, assuming a given rate of return compounded regularly.
Futures Contract (Dated)
A derivatives contract obligating two parties to buy and sell an asset at a predetermined price on a specific future expiration date, as distinct from a perpetual contract, which has no expiration.
A trader using a dated futures contract rather than a perpetual swap must actively roll their position into a new contract as the current one's expiration date approaches to maintain ongoing exposure.
G
GameFi
The broad category of blockchain-based games that integrate financial elements, such as tradable in-game assets, token rewards, or play-to-earn mechanics.
A GameFi project might let players earn tradable tokens for completing in-game tasks, while also letting them buy, sell, and upgrade NFT-based characters or items.
Gann Fan
A set of diagonal lines drawn at specific fixed angles from a significant price point, based on a theory that price and time move in proportional relationships.
The Gann Fan's 1x1 line is considered the most significant angle in Gann's original framework, representing a balanced relationship between price and time.
Gas Abstraction
Letting a user pay transaction fees in a token other than the network's native gas token, or letting a third party cover the fee on the user's behalf.
A user holding only a stablecoin can still transact on a network with gas abstraction support, paying fees in that stablecoin rather than needing to separately acquire the network's native gas token.
Gas Fee
A fee paid to compensate a network for the computing resources used to process a transaction.
Sending a token on a busy network may require a higher gas fee than sending it during a quiet period.
Gas Limit
The maximum amount of computational work a transaction is allowed to use.
A simple transfer generally requires a much lower gas limit than a complex smart contract interaction.
Gas Refund
A partial return of gas cost for specific actions that reduce a network's storage burden, such as clearing previously-used contract storage.
A smart contract clearing data it no longer needs from storage can earn a gas refund, since this reduces the ongoing storage burden every node has to maintain.
Gasless Transaction
A transaction where the end user doesn't need to directly hold or pay the network's native gas token, with the fee covered by another party instead.
A gasless transaction lets a brand-new user interact with an application without first needing to separately acquire the network's native gas token.
Gauge Voting
A governance mechanism where token holders vote to direct a protocol's token emissions toward specific liquidity pools or activities, called 'gauges.'
A liquidity pool whose gauge receives a larger share of votes will typically attract more liquidity providers, since they stand to earn a larger share of the protocol's token emissions.
Generative Art
Art algorithmically created by combining a set of possible traits according to defined rules.
A generative art NFT collection might combine background, clothing, and accessory traits algorithmically.
Genesis Allocation
The initial distribution of a token's supply at a network's launch.
A project's genesis allocation shows how supply was initially divided among the team, investors, and public.
Genesis Block
The very first block ever created on a blockchain.
Bitcoin's genesis block was mined in January 2009 and included a short embedded text message.
Gift Tax
A tax that can apply when someone transfers crypto or other assets to another person without receiving full value in return, separate from the capital gains tax owed on a sale.
A parent gifting crypto to their child generally passes along their own original cost basis to the child, rather than resetting it to the crypto's value at the time of the gift.
Golden Cross and Death Cross
Moving average crossover signals: a golden cross occurs when a shorter-term average crosses above a longer-term one, while a death cross is the reverse, often watched as a long-term trend signal.
A golden cross forming when the 50-period moving average crosses above the 200-period moving average is widely watched as a signal that a longer-term uptrend may be beginning.
Good-Til-Canceled (GTC)
An order instruction that keeps an order active indefinitely until it's either filled or manually canceled, rather than expiring automatically.
A GTC limit order set well below the current price will remain active indefinitely, potentially filling days or weeks later if price eventually reaches it.
Goods and Services Tax (GST)
A consumption tax, functionally similar to VAT, used by name in several countries -- generally distinct from the capital gains tax that applies to crypto investment activity.
GST and VAT are functionally similar consumption taxes, differing mainly in which countries use which name for the concept.
Gossip Protocol
A method of spreading information across a network where each node shares what it knows with a few other nodes, who each pass it on further, until the whole network is informed.
A new transaction broadcast to the network spreads node-to-node via a gossip protocol, reaching the entire network within seconds without any central relay.
Governance Capture
A situation in which a protocol's governance process becomes dominated by a narrow group whose interests diverge from the broader community, letting them steer decisions for their own benefit.
A protocol where a small number of large holders control enough voting power to unilaterally pass proposals faces meaningful governance capture risk, even if voting is technically open to all token holders.
Governance Fatigue
A documented decline in voter participation in DAO governance over time, as token holders disengage from an ongoing stream of proposals.
Governance fatigue can let a small, consistently active group of token holders effectively decide outcomes, even when overall token distribution is broad.
Governance Token
A token that grants holders voting rights over a protocol's decisions.
Holding a governance token might let a user vote on a proposed change to a protocol's fee structure.
Grid Trading
An automated trading strategy that places a ladder of buy and sell orders at set price intervals above and below the current price, profiting from repeated price oscillation within a range.
A grid trading bot set up across a defined price range automatically buys each time the price dips to one of its lower grid levels and sells each time it bounces up to a higher one.
Griefing Attack
An attack where the attacker deliberately harms other participants or disrupts a system, even at a net cost to themselves, rather than seeking direct financial profit.
A griefing attacker may deliberately accept a net financial loss themselves, as long as the attack still disrupts the system or harms other participants.
Grinding Attack
An attack in which a validator repeatedly tries different parameters or strategic choices to bias a supposedly random process, such as leader or committee selection, in their own favor.
A validator attempting a grinding attack might simulate many possible values for their randomness contribution before submitting, to see which one is most likely to result in them being selected as a future block proposer.
Gross Margin
Gross profit divided by revenue, measuring profitability after only the direct costs of producing what a company sells.
A software company often has a much higher gross margin than a physical-goods retailer, since its direct cost of producing each additional unit sold is typically far lower.
Groth16
A widely used zk-SNARK proving system known for producing very small, fast-to-verify proofs, at the cost of requiring a separate trusted setup for each specific circuit.
A privacy protocol using Groth16 benefits from very fast, cheap on-chain proof verification, but must run an entirely new trusted setup ceremony if it ever needs to meaningfully change its underlying circuit.
Guardian (Social Recovery)
A trusted person, device, or service designated to help a wallet owner recover access to their social recovery wallet if they lose their primary means of access.
A social recovery wallet might designate five guardians, requiring any three of them to approve before a wallet recovery can proceed, rather than giving any single guardian unilateral control.
Gwei
A small denomination of ETH commonly used to express Ethereum gas prices.
A wallet might show an estimated gas price of 25 gwei for a pending transaction.
H
Halving
A scheduled event that cuts a network's block reward, and new issuance rate, in half.
Bitcoin's block reward is cut in half roughly every four years through scheduled halvings.
Hammer and Hanging Man
A single candlestick with a small body near the top and a long lower wick, interpreted as a bullish reversal (hammer) after a downtrend or a bearish warning (hanging man) after an uptrend.
The identical candlestick shape is called a hammer when it appears after a downtrend, signaling a possible bullish reversal, and a hanging man when it appears after an uptrend, signaling a possible bearish warning.
Hard Cap
The maximum amount of funding a token sale will accept, after which further contributions are generally rejected.
A token sale that reaches its hard cap quickly is commonly interpreted as a sign of strong demand, though high demand alone says nothing about the project's actual underlying quality.
Hard Fork
A protocol change that is not compatible with older versions of the software.
A hard fork might be used to add a new feature that changes how blocks are validated.
Hard Peg
An exchange-rate commitment backed by a strong, generally legally or structurally enforced guarantee of maintaining a fixed rate.
A national currency board's legally enforced, fixed exchange rate against a reference currency is a classic example of a true hard peg.
Hardware Security Module
A dedicated physical device designed to securely generate and store cryptographic keys.
An exchange might use enterprise-grade hardware security modules to protect its own reserve private keys.
Hardware Wallet
A physical device built specifically to store private keys and sign transactions offline.
A hardware wallet is a common way to implement cold storage for larger crypto holdings.
Hash Function
A mathematical process that turns any input into a fixed-length string of characters.
Each block typically includes the hash of the previous block, linking them into a chain.
Hash Rate
A measure of how much computing power is being used to mine a network.
A rising network hash rate is often cited as a sign of growing miner participation.
Hash Rate Distribution
How a proof-of-work network's total computational power is spread across different miners or pools.
A network with hash rate concentrated among just a few large pools is considered more centralized.
Hash Ribbons
An on-chain indicator tracking miner capitulation and recovery by comparing short-term and long-term moving averages of network hash rate.
A hash ribbons signal flipping from capitulation back to recovery suggests that a wave of weaker, less efficient miners has shut down and the network's hash rate is stabilizing.
Hashed Timelock Contract (HTLC)
A smart contract construction that conditionally locks funds behind a cryptographic hash, releasing them only if the correct preimage is revealed before a deadline, or refunding them otherwise.
A Lightning Network payment routed across three intermediary nodes uses a chain of linked HTLCs, so each node is only paid if it successfully relays the payment and reveals the correct preimage onward.
Head and Shoulders Pattern
A chart pattern of three peaks, with a higher middle peak flanked by two lower, roughly similar peaks, commonly interpreted as a signal that an uptrend is reversing into a downtrend.
A head and shoulders pattern is typically considered confirmed once price decisively breaks below the neckline connecting the lows between its three peaks.
Health Factor
A ratio showing how close a lending position is to liquidation.
A health factor well above 1 generally indicates a position has a meaningful buffer before liquidation risk.
Hedge Fund (Crypto)
A pooled investment vehicle, typically open only to accredited or institutional investors, that actively trades crypto assets using varied strategies in pursuit of returns.
A crypto hedge fund might run a market-neutral arbitrage strategy, aiming to profit from pricing discrepancies between exchanges rather than simply betting on the overall market's direction.
Herfindahl-Hirschman Index (HHI)
A concentration measure, calculated by summing the squared percentage weights of each holding, used to gauge how concentrated a portfolio (or market) actually is.
A portfolio with one position at 80% of total value has a far higher HHI than a portfolio with ten equally-weighted 10% positions, even though both have the same number of holdings.
Hidden Order
An order that doesn't appear on the publicly visible order book at all, executing only when matched, to avoid revealing trading intent to other market participants.
A trader placing a large hidden order avoids signaling their trading intent to other market participants, unlike placing the same size as a visible limit order.
Hierarchical Deterministic Wallet
A wallet that generates many key pairs from a single seed, following a standard derivation structure.
Most modern crypto wallets are HD wallets, generating many addresses from one seed phrase.
HIFO
Highest In, First Out — an accounting method assuming the highest-cost units are sold first.
Under HIFO, units originally purchased at the highest price are treated as the ones sold first.
High-Low Index
A market-breadth indicator measuring the proportion of assets making new highs versus new lows over a period.
A High-Low Index staying elevated over a sustained period suggests broad market strength, with many assets participating in new highs, not just a handful.
High-Water Mark
The highest value a fund has previously reached, used to ensure a manager only collects a performance fee on genuinely new gains above that prior peak, not on merely recovering past losses.
A fund that fell 20% and then recovered exactly 20% hasn't actually surpassed its prior high-water mark, so no new performance fee becomes payable despite the apparent recovery.
Historical Volatility
A statistical measure of how much an asset's price has actually fluctuated over a past period, commonly annualized, distinct from implied volatility.
An asset with a 24-hour, 365-day trading calendar uses a different annualization factor for historical volatility than a traditional market with scheduled closures.
HODL
A long-standing crypto community term for holding an asset through volatility rather than trading in and out, originating from a famous misspelling of 'hold.'
An investor following a HODL strategy holds their position through sharp price swings, rather than attempting to sell during downturns and buy back in later.
HODL Wave
A chart visualization showing what percentage of a network's supply last moved within different age bands, used to study holder behavior over time.
A HODL wave showing a growing share of supply in older age bands is commonly read as a sign of increasing long-term holding behavior.
Holding Period
The length of time an asset was held before being disposed of, which can determine which tax rate applies to any gain or loss.
An asset held for just under a jurisdiction's long-term threshold, then sold, may be taxed at a meaningfully different rate than if it had been held slightly longer.
Holographic Consensus
A governance mechanism that uses a prediction-market-like staking system to help a large community cheaply surface which proposals deserve full attention, without requiring every member to vote on everything.
A routine, uncontroversial proposal under holographic consensus might attract enough predictive staking to get boosted through a fast, low-quorum process, while a contentious proposal defaults to slower, more demanding review.
Homomorphic Encryption
Encryption that allows computation directly on encrypted data without first decrypting it.
Homomorphic encryption could theoretically let a smart contract compute on private data without ever decrypting it.
Honeypot Scam
A malicious smart contract designed to let victims buy in but prevent them from selling.
A honeypot token might allow a small test purchase to succeed while blocking any attempt to sell.
Hot Wallet
A crypto wallet that stays connected to the internet, trading convenience for exposure.
A mobile wallet app used for everyday spending is a common example of a hot wallet.
Howey Test
A legal test, from U.S. case law, used to determine whether something qualifies as an investment contract.
U.S. regulatory discussions of a token's status often reference the Howey Test's specific criteria.
Hull Moving Average (HMA)
A moving average designed by Alan Hull to reduce lag significantly while remaining smooth, by combining weighted averages of different lengths.
An HMA is commonly used specifically because it turns direction sooner than a standard EMA of the same length, while remaining visually smoother than an unsmoothed fast average.
I
Ice Phishing
A phishing attack that tricks a user into signing a malicious token-approval transaction, rather than directly revealing a private key.
A fake "claim your airdrop" page that requests a broad token-approval signature, rather than a simple transfer, is a common ice phishing pattern.
Iceberg Order
A large order split so only a small portion is visible on the order book at a time.
An iceberg order might show only 5% of its total size on the order book at any given moment.
Ichimoku Cloud
A multi-component indicator system built around a 'cloud' of two projected lines, used to read trend direction, momentum, and support/resistance at once.
Price trading above the Ichimoku Cloud is commonly read as a bullish trend context; price trading inside the cloud is commonly read as an unclear, range-bound one.
Impermanent Loss
A potential shortfall liquidity providers face when pooled asset prices diverge.
Impermanent loss tends to be larger when the two pooled assets' prices diverge significantly from each other.
Impermanent Loss Calculator
A tool that estimates the impermanent loss from providing liquidity given a price change.
An impermanent loss calculator can show the estimated loss for a range of possible price changes.
Impermanent Loss Protection
A mechanism some protocols offer to compensate liquidity providers for impermanent loss.
A protocol offering impermanent loss protection funds it from reserves or additional token emissions.
Implied Volatility
The market's expectation of future price volatility, derived from current option prices.
Rising implied volatility generally makes both call and put options more expensive.
In-Kind Redemption
An ETF redemption process where an authorized participant exchanges ETF shares directly for the underlying asset itself, rather than for cash.
An authorized participant redeeming a large ETF share block in-kind receives the underlying bitcoin directly, rather than receiving cash and leaving the fund to sell bitcoin itself.
Inactivity Leak
A consensus mechanism that gradually reduces the stake of offline or non-participating validators during an extended period when the chain can't reach finality, until enough active validators remain to finalize again.
If a large enough share of Ethereum validators went offline simultaneously for a prolonged period, an inactivity leak would begin gradually reducing their stake until finality could resume.
Inclusion List
A proposer-builder-separation mechanism letting a block proposer specify transactions that must be included in the block, regardless of which builder's block is ultimately chosen.
A proposer using an inclusion list can guarantee a specific pending transaction gets included in the next block, even if the winning builder's block would otherwise have excluded it.
Index Price
A reference price for an asset calculated by aggregating prices from multiple exchanges, used as a more manipulation-resistant benchmark than any single venue's price.
A derivatives exchange calculating its index price from several major spot exchanges is less vulnerable to a single exchange's temporary price glitch triggering unnecessary liquidations.
Index Token
A token designed to track the combined value of a defined basket of underlying crypto assets, offering diversified exposure through a single token.
Holding a single index token can provide exposure to a defined basket of several underlying crypto assets, without needing to individually acquire and manage each one.
Indexer
A service that organizes raw blockchain data into a more easily queryable format.
A wallet app typically relies on an indexer to quickly display your transaction history.
Indicator Divergence
When price makes a new high or low that a momentum indicator doesn't confirm, commonly read as a sign of weakening underlying momentum.
Price making a new high while RSI makes a lower high is a classic example of regular bearish divergence, commonly watched as a reversal warning.
Inflationary Token
A token whose total supply grows over time through ongoing issuance, generally used to fund network incentives like staking or mining rewards.
A Proof-of-Stake network's ongoing issuance to validators is a common example of deliberate, functional token inflation, funding the network's security incentives.
Initial Coin Offering (ICO)
An early fundraising method where a project sells its newly created token directly to the public, generally before a product is fully built.
A project running an ICO typically publishes a whitepaper describing its planned technology and token economics before the sale.
Initial DEX Offering (IDO)
A token launch conducted directly through a decentralized exchange, generally providing immediate on-chain trading liquidity.
An IDO typically results in a token being immediately tradable on a decentralized exchange, unlike an ICO, which may have a separate distribution and listing process.
Initial Exchange Offering (IEO)
A token sale conducted directly through a centralized exchange's platform, which vets the project and handles distribution to its own users.
An exchange hosting an IEO typically requires users to hold or stake the exchange's native token to gain priority access to the sale.
Inscription
Data (such as an image or text) embedded directly within a Bitcoin transaction's witness data, the mechanism behind Bitcoin Ordinals.
An inscription's actual content lives directly on Bitcoin's base layer, unlike many NFTs on other chains, which typically store only a pointer to off-chain content.
Institutional Investor
An organization that invests substantial pooled funds on behalf of others or itself.
A large fund allocating client capital into crypto assets is acting as an institutional investor.
Insurance Fund (Exchange)
A pool of funds an exchange maintains to cover losses when a liquidated position's collateral isn't enough to cover its full loss.
An exchange's insurance fund absorbs the shortfall when a liquidated position's collateral falls short of covering its actual loss, protecting other traders from that gap.
Intent-Based Trading
A trading model where a user expresses a desired outcome, such as a specific swap result, and lets competing third parties figure out and execute the best way to achieve it.
A user submitting a trading intent specifies only their desired minimum outcome, leaving competing solvers to determine and execute whatever route achieves that outcome most efficiently.
Inter-Blockchain Communication (IBC)
A standardized protocol that lets independent blockchains within an ecosystem communicate and transfer assets directly, without relying on a separate third-party bridge.
IBC-connected chains within the Cosmos ecosystem can transfer assets between each other without relying on a separate third-party bridge contract.
Interest Coverage Ratio
Operating earnings divided by interest expense, measuring how comfortably a company can service its debt obligations from current earnings.
A declining Interest Coverage Ratio, even without rising debt, can signal a company's operating earnings are weakening relative to its existing debt obligations.
Interest Rate Model
The formula a DeFi lending protocol uses to set borrowing and lending rates based on a pool's current utilization rate.
A typical interest rate model keeps rates low and gradually rising below 80% utilization, then rises very steeply above that threshold to strongly discourage pushing utilization any higher.
Interest Rate Swap
A derivative contract where two parties exchange interest payment streams, commonly swapping a floating rate for a fixed rate, without exchanging the underlying principal.
A DeFi borrower worried about rising variable interest rates might enter an interest rate swap to effectively lock in a fixed borrowing cost instead.
Internal Rate of Return (IRR)
The discount rate at which a series of cash flows' Net Present Value equals exactly zero -- a single rate summarizing an investment's overall return.
An investment's IRR exceeding an investor's required rate of return is generally treated as a signal the investment clears the necessary hurdle.
Interoperability
The ability of different blockchain networks to communicate and work with each other.
A cross-chain bridge is one tool used to improve interoperability between two blockchains.
Intrinsic Value (Options)
The portion of an option's value that comes from it already being profitable to exercise, ignoring any remaining time until expiry.
A call option with a strike price below the current spot price has positive intrinsic value, since exercising it immediately would be profitable.
Inverse Perpetual
A perpetual futures contract denominated and settled in the underlying crypto asset itself, rather than in a stablecoin or fiat-pegged unit.
A Bitcoin inverse perpetual settles profit and loss in BTC itself, meaning a trader's gains are measured in an asset whose own price is also moving.
IPFS (InterPlanetary File System)
A peer-to-peer protocol for storing and retrieving files by their content rather than their location, commonly used to host NFT media and decentralized app data.
An NFT's on-chain metadata commonly stores only an IPFS content hash, with the actual image file served from IPFS rather than stored on the blockchain itself.
Isolated Margin
A margin mode where only the collateral assigned to a specific position is at risk.
A trader using isolated margin on one position can prevent losses there from affecting their other holdings.
Isolated Market
A DeFi lending pool where a specific collateral asset's risk is contained separately from the protocol's other markets, so a failure in one market doesn't directly threaten the others.
A lending protocol using isolated markets can list a newer, more volatile token without putting depositors in its other, established markets at risk if that token's price collapses.
K
Kaufman's Adaptive Moving Average (KAMA)
A moving average that automatically speeds up during trending markets and slows down during choppy, directionless ones.
KAMA tracks price closely during a strong, efficient trend, then automatically flattens out and lags more during a choppy, directionless period.
Kelly Criterion
A formula calculating the theoretically optimal fraction of capital to risk on a bet or trade, given its win probability and payoff ratio.
Many traders deliberately use "half Kelly" or a similar fraction of the full Kelly-calculated size, trading some long-run growth for meaningfully reduced volatility.
Keltner Channels
A moving average with bands plotted at a multiple of Average True Range, similar in concept to Bollinger Bands but built from ATR instead of standard deviation.
Keltner Channels and Bollinger Bands are sometimes plotted on the same chart together, since their differing calculations can disagree about current volatility.
Keylogger
Malicious software that secretly records everything a victim types, including seed phrases and passwords, and sends that captured data to an attacker.
A keylogger infecting a victim's computer could silently capture their wallet password or seed phrase the moment they type it, without any visible sign something is wrong.
Know Sure Thing (KST)
A momentum indicator combining four smoothed rate-of-change calculations at different periods into a single weighted line.
KST's combination of four different-length rate-of-change calculations is intended to reflect momentum across multiple timeframes at once, not just one.
Know Your Customer
Identity verification requirements many regulated crypto platforms require of their users.
Many centralized exchanges require KYC verification before allowing fiat withdrawals.
Know Your Transaction (KYT)
An ongoing compliance practice that monitors and analyzes individual transactions for suspicious patterns, distinct from the one-time identity check KYC performs.
KYT might flag a transaction connected on-chain to a sanctioned address, even for a customer who already passed KYC identity verification.
L
Latency Arbitrage
An arbitrage strategy that profits from being faster than other market participants to react to new information or price changes.
A latency arbitrage strategy might trade against a slower exchange's stale price for a fraction of a second immediately after a price-moving event occurs elsewhere.
Layer 1
A base blockchain network that settles transactions and provides its own consensus and security rules.
Ethereum is a Layer 1 that supports smart contracts and Layer 2 networks.
Layer 2
A system built on or alongside a base blockchain to process activity with different performance trade-offs.
An Ethereum Layer 2 can batch user activity before settling information to Ethereum.
Lazy Minting
Deferring the on-chain minting of an NFT until it is actually purchased.
A lazily-minted NFT collection doesn't cost the creator gas until each individual item actually sells.
Leading vs. Lagging Indicators
The distinction between indicators that confirm a trend after it's developed (lagging) and those that attempt to anticipate a change before it's confirmed (leading).
A moving-average crossover is a classic lagging signal, confirming a trend change only after enough new price data has accumulated.
Legal Wrapper
A real-world legal entity a DAO adopts to interface with the traditional legal and financial system.
A DAO might adopt a legal wrapper to sign a real-world vendor contract.
Lending Protocol
A DeFi application that lets users lend or borrow crypto directly through smart contracts.
A lending protocol might let a user deposit one token to earn interest while others borrow it against collateral.
Leverage
Using borrowed funds to increase the size of a position beyond your own capital.
Using 5x leverage means a position is five times larger than the trader's own posted capital.
LIFO
Last In, First Out — an accounting method assuming the most recently acquired units are sold first.
Under LIFO, the most recently purchased units are treated as the ones sold in a given transaction.
Light Client
A network participant that verifies transactions without downloading the full blockchain.
A mobile wallet often operates as a light client rather than running a full node itself.
Light Node
A node that verifies blockchain data without storing the full chain itself, relying on cryptographic proofs and trusted full nodes for the data it doesn't hold locally.
A mobile crypto wallet commonly operates as a light node, verifying the user's own transactions and balance without storing the blockchain's entire multi-terabyte history.
Lightning Network
A Layer 2 network built on Bitcoin that enables fast, low-fee payments through off-chain payment channels.
Two parties can exchange many small Lightning payments back and forth, with only the channel's final balance settled on Bitcoin's base layer.
Like-Kind Exchange
A US tax provision allowing certain asset swaps to defer capital gains tax, historically debated for crypto-to-crypto trades before 2018.
Prior to 2018, some US taxpayers argued crypto-to-crypto trades qualified for like-kind exchange tax deferral; this argument no longer applies under current law.
Limit Order
An order to buy or sell only at a specific price or better.
A limit order to buy below the current price will only fill if the price drops to that level.
Lindy Effect
The idea that the longer a non-perishable technology, institution, or idea has already survived, the longer its remaining life expectancy tends to be.
Proponents of applying the Lindy effect to Bitcoin argue that each additional year it operates without a catastrophic failure adds to the case for its long-term durability.
Linear Perpetual
A perpetual futures contract denominated and settled in a stablecoin, generally producing a more straightforward, directly proportional profit-and-loss profile.
A linear perpetual's stablecoin-denominated profit and loss moves directly and proportionally with the underlying asset's price change.
Linear Regression and Linear Regression Channel
A statistically-calculated best-fit trend line through price, with a channel adding parallel lines at a set deviation above and below it.
A linear regression line is calculated mathematically to minimize overall distance from price, rather than drawn subjectively by eye.
Linear Vesting
A vesting structure where tokens unlock gradually and continuously over a period, rather than all at once.
A linear vesting schedule unlocking over 24 months releases a consistent, predictable fraction of the total allocation every month.
Liquid Democracy
A governance model letting participants either vote directly on a proposal or delegate their vote to someone else they trust, with the flexibility to switch between the two at any time.
A token holder uninterested in reviewing every individual proposal might delegate their voting power under a liquid democracy system to a delegate who actively researches and votes on each one.
Liquid Restaking Token
A tradeable token representing a position that is both staked and restaked.
An LRT can be traded or used in other DeFi protocols while the underlying position remains staked and restaked.
Liquid Staking
Staking an asset while receiving a tradeable token representing the staked position in return.
A liquid staking participant can trade their received token even while their original assets remain staked.
Liquid Staking Token
The tradeable token received in exchange for participating in liquid staking.
A liquid staking token can often be used as collateral in a separate DeFi lending protocol.
Liquidation
The forced sale of collateral when a loan's safety threshold is breached.
A sudden price drop in collateral can trigger liquidation faster than a borrower expects.
Liquidation Bot
Automated software that continuously monitors DeFi lending positions and triggers the liquidation of any position that crosses its liquidation threshold, earning a reward for doing so.
Multiple competing liquidation bots might race to be the first to submit a liquidation transaction the moment a position crosses its liquidation threshold, since only the first successful bot earns the liquidation reward.
Liquidation Cascade
A chain reaction where one leveraged position's liquidation pushes price further against other similar positions, triggering further liquidations in sequence.
A liquidation cascade can turn an ordinary price decline into a much sharper, faster crash, as each liquidation's forced selling triggers the next.
Liquidation Penalty
An additional cost charged to a borrower whose position is liquidated, on top of losing the collateral needed to cover the outstanding debt.
A borrower facing liquidation loses not just enough collateral to cover their debt, but an additional liquidation penalty on top of it.
Liquidation Price
The price at which a leveraged position is automatically closed to prevent further loss.
A highly leveraged position has a liquidation price much closer to its entry price than a lightly leveraged one.
Liquidation Threshold
The loan-to-value ratio at which a collateralized position becomes eligible for liquidation, typically set slightly higher than the maximum borrowing ratio allowed at loan origination.
A protocol might let borrowers open positions up to 70% loan-to-value, but set the actual liquidation threshold at 80%, giving a 10-percentage-point buffer before liquidation risk begins.
Liquidity
The amount of an asset available to trade or exchange without causing a large price change.
A large trade in a small liquidity pool may receive a worse execution price.
Liquidity Bootstrapping Pool (LBP)
A token-launch mechanism using a pool with gradually shifting weights, starting at a high price that declines over time unless buying demand supports it.
A project launching via an LBP might start the sale with a price far above its expected fair value, letting the declining weight curve pull the price down toward where real demand meets it.
Liquidity Depth
A measure of how much an asset can be bought or sold at or near its current price before the order book or pool runs out of liquidity at that level, driving the price further.
An asset with deep liquidity can absorb a large sell order with minimal price impact, while the same order size in a shallow, thinly traded market could move the price significantly.
Liquidity Fragmentation
The spreading of trading liquidity across many separate venues, chains, or pools, rather than being concentrated in one place.
The same asset trading across dozens of separate exchanges and chains, rather than concentrated on one venue, is a direct example of liquidity fragmentation.
Liquidity Mining
A program that rewards users with a protocol's own token for depositing or providing liquidity, used to bootstrap usage and liquidity for a new or growing DeFi protocol.
A new DeFi protocol might launch a liquidity mining program distributing its native token to early liquidity providers, aiming to bootstrap sufficient pool depth before organic trading fees alone could sustain it.
Liquidity Pool
A shared pool of tokens that traders swap against, often funded by other users.
A liquidity pool might hold two different tokens in a ratio that determines their relative price.
Liquidity Provider
Someone who deposits assets into a liquidity pool, usually in exchange for a share of fees.
A liquidity provider might deposit equal values of two tokens into a pool to start earning fees.
Liquidity Sweep and Stop Hunt
A sharp, brief price move just beyond a well-known support, resistance, or stop-loss cluster, triggering stop orders before quickly reversing back in the opposite direction.
A liquidity sweep might briefly push price just below a well-known support level, triggering clustered stop-loss orders, before quickly reversing back above that level.
Liveness (Consensus)
A consensus property guaranteeing the network continues making progress and eventually processes valid transactions, even under adverse conditions.
A network maintaining liveness continues producing new blocks and processing transactions, even if some validators go offline or act maliciously.
Loan-to-Value (LTV)
The ratio of a borrowed amount to the value of the collateral backing it, a core measure of a loan's risk in both DeFi and traditional lending.
A falling collateral price automatically raises a DeFi loan's LTV, even though the borrowed amount itself hasn't changed.
Lock-and-Mint
A bridge mechanism that locks an asset on its source chain and mints a corresponding wrapped version on the destination chain.
A lock-and-mint bridge's wrapped token is only as trustworthy as the bridge's continued, verifiable custody of the original locked asset.
Locked Liquidity
Liquidity pool tokens deliberately locked in a time-locked smart contract for a set period, preventing a project's team from withdrawing the underlying liquidity and used as a rug-pull mitigation signal.
A new token project locking its liquidity for a year through a reputable, independently verifiable service offers a stronger trust signal than one using only a short, obscure lock.
Long Position
A position that profits if an asset's price increases.
Buying an asset because you expect its price to rise is the simplest example of going long.
Long Squeeze
A sharp price decline that forces leveraged long positions to be liquidated, with their forced selling accelerating the decline further.
A long squeeze can turn an already-declining market into a much sharper crash, as liquidated long positions' forced selling compounds the original move.
Long-Range Attack
A theoretical proof-of-stake attack in which someone acquires old private keys and uses them to construct an alternative transaction history starting from far back in the chain.
A long-range attack specifically threatens a brand-new node syncing for the first time, which has no independent way to know which of two competing, internally valid-looking chain histories is genuinely correct.
Long/Short Ratio
A metric comparing the total value or number of long positions to short positions on a derivatives exchange, used to gauge aggregate trader positioning and sentiment.
A long/short ratio of 3 means three times as much long position value is open as short position value on that exchange at that moment.
Looping (Leverage Loop)
A DeFi strategy that repeatedly deposits an asset as collateral, borrows against it, and redeposits the borrowed funds, amplifying exposure and yield at the cost of greater liquidation risk.
A user looping a liquid staking token might repeat the deposit-borrow-redeposit cycle several times, substantially amplifying their effective staking yield beyond what a single unleveraged deposit would earn.
Lost Coins
Cryptocurrency units that are permanently inaccessible, typically due to a lost private key or seed phrase, which still count toward total and circulating supply figures despite never being movable again.
An early Bitcoin holder who discarded a hard drive containing their only wallet backup permanently lost access to those coins, which remain lost coins despite still counting toward Bitcoin's official circulating supply.
LP Token
A token received for depositing assets into a liquidity pool, representing a proportional claim on that pool's holdings and any fees it earns.
A user depositing equal value of two tokens into a liquidity pool receives LP tokens representing their proportional claim on the pool's total holdings and accumulated trading fees.
M
MACD (Moving Average Convergence Divergence)
A trend-following momentum indicator built from the difference between two EMAs, plus a signal line and histogram derived from that difference.
A MACD line crossing above its signal line is a commonly watched bullish momentum signal, and crossing below is a commonly watched bearish one.
Mainnet
The live, real version of a blockchain network where transactions have real value.
Ethereum's mainnet is the live network where real ETH and real transactions exist.
Maintenance Margin
The minimum amount of margin a leveraged position must maintain to stay open -- falling below it triggers liquidation.
A position's margin falling below the maintenance margin threshold is what actually triggers liquidation, not simply the position showing a loss.
Maker Order
An order that adds new liquidity to an order book rather than filling an existing order.
A limit order that sits on the book waiting to be filled is typically classified as a maker order.
Maker-Taker Fee Model
A fee structure charging a lower (or rebated) rate to orders that add liquidity and a higher rate to orders that remove it.
A trader placing a limit order that doesn't fill immediately generally pays the lower maker fee, while a market order filling immediately pays the higher taker fee.
Malicious Browser Extension
A browser add-on, often disguised as a useful tool, designed to intercept wallet activity, steal credentials, or silently modify transaction data in a victim's browser.
A malicious browser extension might silently swap a legitimate recipient address for an attacker's address right before a user confirms a wallet transaction in their browser.
Malvertising
The use of malicious online advertisements, often served through legitimate ad networks, to direct victims to phishing sites or trigger malware downloads.
A malvertising campaign might place a fake ad mimicking a popular wallet's branding at the very top of search results, above the actual legitimate website.
Man-in-the-Middle Attack
An attack where a third party secretly intercepts and possibly alters communication between two parties.
Using an unsecured public network can increase risk of a man-in-the-middle attack.
Management Fee and Performance Fee
The two main fee components a fund typically charges: a management fee based on total assets under management, and a performance fee based on a share of investment profits generated.
A crypto hedge fund charging a 2% management fee and a 20% performance fee collects the management fee regardless of performance, but only collects the performance fee on actual profits generated.
Margin Call
A warning that additional collateral is needed to avoid a leveraged position being liquidated.
A margin call gives a trader a chance to add collateral before a position is automatically liquidated.
Margin Trading
Trading with funds borrowed against collateral you've deposited with an exchange.
A margin trader posts collateral to borrow additional funds for a larger position.
Mark Price
A smoothed reference price, distinct from the last traded price, that exchanges use to calculate unrealized profit and trigger liquidations.
A position's liquidation price is generally calculated against the mark price, not the exchange's own last traded price.
Mark-to-Market
Valuing a held position at its current market price, rather than at its original purchase price, to reflect its actual present-day worth.
A leveraged position's margin requirement and liquidation risk are generally calculated against its current mark-to-market value, not its original entry price.
Market Breadth Indicators: An Overview
A category of indicators that measure how many individual assets are participating in a market move, rather than looking at one asset's price alone.
A market-wide rally driven by broad participation across many assets is generally considered more durable than one concentrated in just a few large assets.
Market Cap
The total value of all circulating units of a cryptocurrency, used to gauge its relative size.
A cryptocurrency with a higher price but a smaller circulating supply can have a lower market cap than one with a lower price and larger supply.
Market Depth
How much buy and sell order volume exists at prices near the current market price.
A market with strong depth can absorb a large order without moving the price significantly.
Market Dominance
A specific asset's market cap as a percentage of the total crypto market's combined market cap.
Bitcoin dominance is commonly tracked as a general indicator of relative market sentiment toward Bitcoin versus other assets.
Market Maker
A participant who places both buy and sell orders on an order book to provide continuous liquidity, generally profiting from the spread.
A market maker profits primarily from capturing the bid-ask spread across many trades, not from predicting price direction.
Market Order
An order to buy or sell immediately at the best currently available price.
A market order to buy will fill immediately at the lowest available sell prices until the order is complete.
Market Structure
The pattern of successive highs and lows on a chart used to classify the current trend, with higher highs and higher lows defining an uptrend and the reverse defining a downtrend.
An uptrend's market structure of higher highs and higher lows producing a lower low instead is widely treated as one of the earliest signals that the trend may be shifting.
Market Taker
A trader whose order executes immediately against existing resting orders on the book, removing liquidity, as distinct from a market maker who provides it.
A trader submitting a market order to buy immediately is always acting as a market taker, since the order executes right away against existing resting sell orders.
Marubozu
A candlestick with no wicks (or negligible ones), where the open and close sit at or near the extreme high and low, reflecting one-sided conviction throughout the entire period.
A bullish marubozu, opening at the low and closing at the high with no wicks at all, reflects buyers controlling price completely throughout the entire period.
Mass Index
An indicator based on the widening of an asset's trading range, used to identify potential trend reversals through range expansion rather than price direction.
A Mass Index "reversal bulge" pattern is based entirely on the trading range widening and then contracting again, not on which direction price is moving.
MAST (Merkelized Abstract Syntax Tree)
A Bitcoin scripting technique that lets a transaction commit to many possible spending conditions while revealing only the one actually used, improving privacy and efficiency.
A multisig arrangement using MAST can define many alternative signing conditions upfront, while only revealing the specific condition actually used whenever the funds are eventually spent.
Max Supply
The absolute maximum number of coins or tokens that will ever exist.
Bitcoin has a max supply of 21 million coins, enforced by its protocol.
Maximal Extractable Value
Extra value a block producer can capture by choosing how to order or include transactions.
A large decentralized exchange trade can attract MEV activity from parties trying to profit off its price impact.
Maximum Drawdown
The largest peak-to-trough decline an asset or portfolio experienced over a period.
An asset with a historical 80% maximum drawdown has, at some point, fallen 80% from a prior peak.
McClellan Oscillator and Summation Index
A market-breadth momentum oscillator built from advancing-minus-declining issues, plus a cumulative running total used to track longer-term breadth trends.
The McClellan Oscillator applies a MACD-style, difference-of-two-EMAs calculation to breadth data (advancing minus declining issues) instead of to price.
McGinley Dynamic
A moving average, developed by John McGinley, that automatically adjusts its own speed based on the relationship between price and the average itself.
The McGinley Dynamic was specifically designed to track fast-moving markets more closely than a standard, fixed-speed moving average.
Meme Coin
A cryptocurrency created primarily around internet humor or cultural trends, often with limited utility.
A meme coin's value is often driven primarily by community sentiment and online attention rather than underlying utility.
Mempool
The waiting area where broadcast transactions sit before being included in a block.
During periods of high network demand, the mempool can become congested with many pending transactions.
Merge Mining
Mining two or more blockchains simultaneously using the same proof-of-work, without needing additional hashpower beyond what securing one chain already requires.
A newer blockchain using merge mining with Bitcoin can inherit a meaningful share of Bitcoin's enormous hash rate without needing to attract that mining power independently.
Merkle Proof
A compact proof that a specific piece of data is included in a larger Merkle tree, without needing the full tree.
A light client can use a Merkle proof to verify a transaction's inclusion without downloading the entire block.
Merkle Tree
A data structure that efficiently summarizes many transactions into a single hash.
A block header typically stores only the Merkle root, not every individual transaction hash.
Meta-Transaction
A transaction a user signs off-chain, which a separate relayer then submits and pays the gas fee for on the user's behalf.
A user signs a meta-transaction off-chain, authorizing a specific action, while a separate relayer handles actually submitting it on-chain and paying the gas fee.
Metaverse
A broad, persistent, often interconnected set of virtual environments where users interact, socialize, and transact, sometimes using blockchain-based ownership of virtual items or land.
A blockchain-based metaverse project might sell virtual land as NFTs, giving buyers verifiable on-chain ownership of a specific parcel within that virtual world.
Metcalfe's Law
A principle stating that a network's value grows roughly proportional to the square of its number of connected users, sometimes applied to valuing blockchain networks based on active addresses.
An analyst applying Metcalfe's Law to a blockchain might compare its market cap against the square of its active daily addresses, looking for whether the valuation appears stretched relative to usage.
MEV-Boost
Software many Ethereum validators run to receive block offers from competing builders and select the most valuable one to propose.
A large share of Ethereum validators run MEV-Boost specifically to access competitive builder block offers rather than constructing blocks themselves.
MiCA
The European Union's comprehensive regulatory framework for crypto assets.
A stablecoin issuer operating in the EU is subject to MiCA's specific reserve and disclosure requirements.
Mining
The process of using computing power to validate transactions and secure a proof-of-work network.
Bitcoin relies on mining as part of its proof-of-work consensus process.
Mining Farm
A large-scale, dedicated facility housing many mining machines working together, typically built near inexpensive electricity and equipped with industrial cooling infrastructure.
A large mining farm might house thousands of machines in a single facility, specifically located in a region with access to unusually cheap electricity.
Mining Pool
A group of miners who combine computing power and share rewards proportionally.
A miner might join a pool to receive smaller, more frequent rewards instead of rare, larger ones alone.
Mint Pass
An NFT or token that grants its holder the right to mint a specific future NFT collection, often tradable separately before the actual mint occurs.
A mint pass can be bought and sold on secondary markets before its holder actually uses it to mint the underlying collection.
Mint Price
The price a buyer pays to acquire a newly created NFT directly from the project during its initial sale, as distinct from the floor price in the secondary market afterward.
An NFT collection whose secondary-market floor price sits well above its original mint price suggests strong, sustained demand has developed since the initial sale.
Minting
The process of creating a new token or NFT and recording it on-chain for the first time.
A collector minting a new NFT directly from the project is creating it on-chain for the first time.
Mixer
A service that pools and redistributes funds from many users, intended to obscure the link between a deposit and a later withdrawal.
A mixer's pooling function is what obscures the link between a specific deposit and withdrawal, the same general goal CoinJoin pursues through a different, non-custodial method.
Modular Blockchain
A blockchain design that separates core functions like execution and data availability across specialized layers.
A modular blockchain design might use a separate, specialized layer specifically for data availability.
Momentum
The speed and strength of a recent price move, independent of its direction.
Price making a new high while a momentum indicator makes a lower high is a classic bearish divergence — the move is still up, but momentum is fading.
Momentum vs. Contrarian Investing
Two opposing investment philosophies: momentum investing bets that a recent price trend will continue, while contrarian investing bets that a trend has gone too far and will reverse.
A momentum investor buying into a sustained rally is betting the existing trend continues, while a contrarian investor selling into that same rally is betting the trend has become overextended and will reverse.
Money Flow Index (MFI)
An RSI-style 0-100 oscillator that incorporates both price and volume, sometimes described as a volume-weighted version of RSI.
MFI readings above 80 are commonly discussed as overbought and below 20 as oversold, similar in spirit to RSI's thresholds.
Money Transmitter License (MTL)
A U.S. state-level license required to legally transmit money on behalf of others, which many crypto exchanges must obtain in each state where they operate, including New York's specific BitLicense.
A crypto exchange operating across the United States typically needs to obtain a separate money transmitter license in most individual states where it serves customers, rather than a single national license.
Monolithic Blockchain
A blockchain design that handles execution, consensus, and data availability all within a single layer.
Bitcoin's base-layer design is commonly described as monolithic, handling core functions within one integrated chain.
Morning Star and Evening Star
Three-candlestick reversal patterns: a morning star signals a bullish reversal at the bottom of a downtrend, while an evening star signals a bearish reversal at the top of an uptrend.
A morning star pattern completing after a sustained downtrend, with its third candle closing deep into the first candle's body, is generally considered a strong bullish reversal signal.
Moving Average Envelopes
Percentage-based bands plotted above and below a moving average, used to flag when price has moved unusually far from its trend.
Price touching the upper moving average envelope band is commonly discussed as a sign it has stretched unusually far above its recent trend.
MPC Wallet
A wallet that uses secure multi-party computation to split key-management across multiple parties or devices, removing any single point holding the complete private key.
An MPC wallet can let a user sign transactions using key shares split between their phone and a cloud-based backup service, without either party alone being able to move funds.
Multi-Party Computation
A cryptographic technique letting multiple parties jointly compute a result without revealing their private inputs.
An MPC wallet can require multiple parties to jointly participate in signing, without any one holding a full private key.
Multi-Signature Wallet
A wallet that requires approval from more than one key before a transaction can be sent.
A two-of-three multisig wallet requires any two of three designated keys to approve a transaction.
MVRV Ratio
The ratio between an asset's market capitalization and its realized capitalization, used to gauge aggregate unrealized profit or loss.
An MVRV ratio well above 1 is commonly discussed as indicating the network's holders are sitting on substantial aggregate unrealized gains.
MVRV Z-Score
A refinement of the MVRV ratio that measures how many standard deviations market value sits above or below realized value, intended to better highlight statistically extreme valuations.
An MVRV Z-Score reading in territory historically associated with past market tops doesn't guarantee a top is forming, since each market cycle has its own unique dynamics.
N
Nakamoto Coefficient
A measure of decentralization counting the minimum number of entities that would need to collude to compromise a blockchain's core functions, such as consensus.
A blockchain where the top four mining pools collectively control over half of total hash rate has a consensus-layer Nakamoto Coefficient of four.
Nakamoto Consensus
Bitcoin's original approach combining proof of work with the longest-valid-chain rule.
Many early cryptocurrencies adapted Nakamoto Consensus from Bitcoin's original design.
Native Token
The primary asset built directly into a blockchain's own protocol.
ETH is Ethereum's native token, used to pay gas fees on the network.
Native Yield
Yield built directly into an asset itself (such as a staking reward passed through automatically), rather than requiring a holder to separately deposit it somewhere to earn a return.
A stablecoin with native yield might automatically pass through the staking reward earned on its underlying collateral, without the holder needing to do anything extra.
Negative Volume Index and Positive Volume Index (NVI and PVI)
Cumulative indicators that track price change specifically on days when volume falls (NVI) or rises (PVI) from the prior day.
NVI only changes on days when volume falls from the prior day — on every other day, it simply carries its prior value forward unchanged.
Net Asset Value (NAV)
The total value of a fund's underlying holdings divided by its number of outstanding shares, representing the fund's fair per-share value.
A Bitcoin ETF's NAV is calculated by valuing its total bitcoin holdings at the day's closing price and dividing by the number of outstanding shares.
Net Margin
Net income divided by revenue, measuring a company's overall bottom-line profitability after every expense, including interest and taxes.
Two companies with identical operating margins can have different net margins if one carries significantly more debt, due to the resulting difference in interest expense.
Net Present Value (NPV)
The sum of a series of future cash flows, each discounted back to the present, minus the initial cost -- used to assess whether an investment creates value.
A positive NPV suggests an investment's discounted future cash flows exceed its upfront cost, a standard signal it may be worth pursuing.
Net Unrealized Profit/Loss (NUPL)
An on-chain metric measuring the aggregate unrealized profit or loss across a network's entire supply, relative to its market capitalization.
NUPL and MVRV are built from the same underlying market-cap-versus-realized-cap relationship, just expressed in different units.
Network Effect
The phenomenon where a network becomes more valuable to each user as more people join and use it, often cited as a key driver of a blockchain's long-term competitive advantage.
An established blockchain's large existing liquidity, developer ecosystem, and user base can give it a durable network effect advantage over newer, technically similar competitors.
NFT Marketplace Aggregator
A platform that pulls together NFT listings from many separate marketplaces into a single interface, letting users search, compare, and purchase across all of them at once.
A buyer attempting to sweep the floor of an NFT collection might use a marketplace aggregator to simultaneously purchase the cheapest available listings across several different underlying marketplaces in one transaction.
NFT Metadata
The descriptive data (image, traits, name) associated with a specific NFT.
An NFT's image and traits are generally defined by its metadata, not stored directly in the token itself.
NFT Royalty
A percentage of a resale price intended to be paid automatically to an NFT's original creator.
An NFT collection might set a 5% royalty intended to be paid to the creator on every resale.
NFT Vault
The smart contract that locks an NFT in custody while fraction tokens representing its ownership circulate.
An NFT vault holds the real NFT while its fraction tokens trade independently.
Node
A computer that runs blockchain software and helps maintain the network.
Anyone can typically download and run node software to participate in a public blockchain network.
Node Operator
An individual or organization responsible for running and maintaining a blockchain node, whether a full node, a validator node, or specialized infrastructure for another protocol.
An institutional staking provider might act as a professional node operator, running validator infrastructure on behalf of many clients who delegate their stake to it.
Node Provider
A company or service offering managed access to blockchain nodes for developers.
Many wallets and applications rely on a node provider rather than running their own full node infrastructure.
Nominal Return
An investment's raw, unadjusted percentage return, before accounting for the effect of inflation on purchasing power.
A nominal return of 10% in a year with 3% inflation corresponds to a real return of roughly 7%, not the full 10%.
Non-Custodial Wallet
A wallet where the user alone holds and controls the private keys.
Most standalone mobile and hardware wallets are non-custodial by design.
Non-Fungible Token
A token representing a unique item, where each unit is distinct and not interchangeable.
Two NFTs from the same collection can have very different value depending on their individual attributes.
Nonce
A number used once, either in mining or to track the order of a wallet's transactions.
A miner may try billions of different nonce values before finding one that produces a valid block hash.
Nothing-at-Stake Problem
A theoretical Proof-of-Stake concern that validators have little direct cost to supporting multiple competing chain histories simultaneously.
Slashing penalties are the primary mechanism modern Proof-of-Stake networks use to address the nothing-at-stake problem directly.
Nullifier
A unique cryptographic value published when spending shielded funds, allowing the network to prevent double-spending without revealing which specific funds were spent.
When shielded funds are spent, their corresponding nullifier is published on-chain, letting the network reject any future attempt to spend the same funds again without revealing what those funds were.
NVT Ratio
A network's market capitalization divided by a measure of its on-chain transaction activity, used as a crypto-native valuation multiple.
A rising NVT ratio, without a corresponding rise in on-chain activity, is commonly discussed as a sign valuation may be outpacing usage.
O
OFAC
The US Treasury office that administers and enforces economic sanctions, including maintaining lists of specific blocked individuals, entities, and wallet addresses.
OFAC has directly sanctioned specific crypto wallet addresses in real, documented enforcement actions, not just individuals and companies.
Off-Chain
Activity or data that happens outside a blockchain's own public record.
Trades between two users on a centralized exchange's internal order book happen off-chain until a withdrawal occurs.
Omnibus Account
A single custodial account holding assets on behalf of many underlying customers collectively, where individual customer ownership is tracked internally rather than on-chain.
An exchange using an omnibus account structure holds all customer crypto in a shared pool of addresses, tracking each individual customer's specific balance internally rather than on-chain.
Omnichain
Describing a protocol or application designed to operate natively across many blockchain networks simultaneously, rather than being deployed separately on each one.
An omnichain token lets a holder move it from one network to another while the protocol burns it on the first chain and mints it on the second, keeping one combined supply rather than separate wrapped versions.
On-Balance Volume (OBV)
A running cumulative total that adds a period's full volume on an up day and subtracts it on a down day, used to gauge buying/selling pressure.
OBV rising steadily while price moves sideways is commonly read as a sign of quiet accumulation that hasn't yet shown up in price.
On-Chain
Activity or data that is recorded directly on a blockchain itself.
A confirmed transaction is recorded on-chain, visible to anyone who looks it up.
On-Ramp vs. Off-Ramp
The services and processes that let someone convert traditional fiat currency into crypto (on-ramp) or convert crypto back into fiat currency (off-ramp).
A new user converting their first dollars into Bitcoin through a centralized exchange is using an on-ramp, while later withdrawing crypto proceeds back to their bank account is using an off-ramp.
OP_RETURN
A Bitcoin Script opcode that lets a small amount of arbitrary data be embedded in a transaction, which is provably unspendable.
OP_RETURN has historically been used to timestamp documents or embed small references to off-chain data directly in a Bitcoin transaction.
Opcode
A single low-level instruction that a blockchain's virtual machine executes.
A smart contract's bytecode is ultimately a sequence of opcodes the virtual machine executes in order.
Open Interest
The total value of outstanding derivative contracts that have not yet been closed or settled.
Rising open interest alongside rising price can indicate growing leveraged long positioning.
Operating Margin
Operating income divided by revenue, measuring profitability after operating expenses but before interest and taxes.
Operating margin isolates how profitable a company's core operations are, independent of how much debt it carries or what tax rate it pays.
Optimistic Rollup
A rollup design that assumes submitted transactions are valid by default, relying on a challenge window for anyone to dispute incorrect ones.
An optimistic rollup's challenge window is why withdrawing funds back to the base chain typically takes longer than on a validity-proof-based (ZK) rollup.
Options Greeks
A set of calculated measures (Delta, Gamma, Theta, Vega) describing how an option's price is expected to change relative to different market factors.
An option's Theta specifically measures how much value it's expected to lose purely from the passage of time, holding everything else constant.
Oracle
A service that brings real-world data onto a blockchain for smart contracts to use.
A DeFi lending protocol might use a price oracle to determine when a loan should be liquidated.
Oracle Manipulation
An attack that exploits or distorts a price feed a smart contract relies on.
A protocol relying on an easily-moved, thin-liquidity price source is more vulnerable to oracle manipulation.
Order Book
A live list of buy and sell orders at different prices, used to match trades.
A deep order book generally means large trades can execute with less price impact.
Order Flow
The stream of buy and sell orders arriving at a market, whose composition and timing can reveal information about near-term supply and demand.
A sudden surge in large buy orders arriving at a market is a direct order-flow signal, distinct from any pattern visible in the price chart alone.
Ordinals
A protocol for inscribing arbitrary data onto individual satoshis on Bitcoin.
An Ordinals inscription attaches data directly to a specific, individually-numbered satoshi.
Orphan Block
A validly mined block that ends up excluded from the main blockchain.
Two miners solving a block at nearly the same time can result in one of the two blocks becoming orphaned.
OTC Desk
A service that facilitates large crypto trades privately and directly between two parties, outside a public exchange's order book.
A fund that wants to buy $20 million of bitcoin requests a quote from an OTC desk, accepts a single all-in price, and avoids the price impact of sweeping that size through a public order book.
Over-Collateralization
Requiring collateral worth more than the loan itself, to protect against price swings.
A protocol might require $150 of collateral for every $100 borrowed.
P
P2PKH (Pay-to-Public-Key-Hash)
Bitcoin's original, 'legacy' address format, recognizable by addresses starting with the number '1', requiring a single matching private key to spend.
A Bitcoin address starting with the digit '1' uses the original P2PKH format, Bitcoin's simplest and oldest address type.
P2SH (Pay-to-Script-Hash)
A Bitcoin address format, recognizable by addresses starting with '3', that locks funds to a hash of a script rather than a single key, enabling conditions like multisig.
A Bitcoin address starting with the digit '3' uses the P2SH format, commonly indicating a multisig arrangement or a wrapped SegWit address.
Paper Wallet
A physical printed copy of a wallet's public address and private key.
A paper wallet generated offline can serve as one form of cold storage.
Parabolic SAR
A trend-following indicator plotting dots that trail price and accelerate over time, commonly used as a trailing stop-loss reference.
Parabolic SAR's dots accelerate closer to price the longer a trend continues, tightening a potential trailing stop as the trend matures.
Parachain
An independent blockchain connected to and secured by a central relay chain, letting it process its own transactions while sharing the relay chain's overall security.
A parachain specialized for a specific use case, such as decentralized finance or gaming, can rely on its relay chain's shared validator set for security rather than bootstrapping its own independent consensus.
Partial Fill
When only part of an order's total size executes against available liquidity, leaving the remainder either still open on the order book or canceled, depending on the order's instructions.
A large limit order placed in a thinly traded market might receive only a partial fill initially, with the remaining unfilled portion staying open on the order book.
Partial Liquidation
A liquidation design that closes only the portion of an under-collateralized position needed to restore it to a safe loan-to-value ratio, rather than closing the entire position at once.
A protocol using partial liquidation might close only 20% of an under-collateralized position, just enough to restore a safe loan-to-value ratio, rather than liquidating the entire position.
Passkey
A passwordless authentication credential, backed by public-key cryptography and typically secured by a device's biometric sensor, increasingly used to secure crypto wallets.
A smart account wallet might let a user approve transactions using a passkey secured by their phone's fingerprint sensor, rather than manually signing with a separate hardware wallet.
Pause Mechanism (Smart Contract)
A built-in smart contract feature letting an authorized party temporarily halt some or all of a contract's functions, generally in response to a discovered vulnerability.
A pause mechanism can limit damage from an actively-unfolding exploit by halting a contract's functions before more funds are drained.
Paymaster
A smart contract that can pay transaction fees on behalf of a smart account's user, potentially in a different token or for free.
A paymaster could let a user pay a transaction's gas fee in a stablecoin, rather than needing to hold the network's native gas token at all.
Payment Channel
A direct connection between two parties that lets them exchange many off-chain payments, settled on-chain only when the channel closes.
A payment channel between two frequent trading partners lets them settle many small payments without paying an on-chain fee for each one.
Peeling Chain
A fund-obfuscation pattern in which a large balance is moved through a long sequence of transactions, peeling off a small amount at each hop.
An exchange's hot wallet paying out withdrawals one at a time from a single large balance naturally produces a peeling-chain pattern that looks superficially similar to deliberate fund obfuscation.
Peer-to-Peer Network
A network where participants connect and communicate directly with each other, rather than all relying on a central server.
A blockchain's peer-to-peer network means no single company's server going offline can take the entire network down with it.
Peg
The target value a stablecoin is designed to consistently track.
A stablecoin pegged to the US dollar aims to consistently trade at approximately $1.
Peg Arbitrage
The trading activity that profits from, and helps correct, a stablecoin's price drifting away from its target.
Peg arbitrage profits from buying an undervalued stablecoin and redeeming it at full value.
Peg Stability Module (PSM)
A mechanism that lets users swap a protocol's stablecoin for another reference stablecoin at a near-1:1 rate, helping anchor the protocol's peg.
If a stablecoin trades slightly below its peg, a Peg Stability Module lets arbitrageurs profit by buying it cheaply and redeeming it at close to full value, pushing the price back up.
Pension Fund (Crypto)
A pooled fund managing retirement savings on behalf of workers, some of which have begun allocating a small portion of their portfolios to crypto, typically through regulated vehicles.
A public pension fund disclosing a small spot crypto ETF allocation is often viewed as a notable institutional-adoption signal, given how conservative pension fund investment mandates typically are.
Permanent Establishment
A fixed place of business or sufficiently significant business presence in a country, which can make a foreign business subject to that country's taxation.
A crypto mining operation with physical hardware running continuously in a specific country can constitute a permanent establishment there, even without a traditional office.
Permissioned vs. Permissionless Blockchain
A distinction between a blockchain anyone can join and validate transactions on without approval (permissionless) and one requiring authorization from a controlling entity (permissioned).
Anyone can set up a Bitcoin node and attempt to mine blocks without needing anyone's approval, since Bitcoin is a permissionless blockchain.
Permit Phishing
A scam that tricks a victim into signing a malicious EIP-2612 permit message, granting an attacker token approval without the victim realizing they authorized anything.
A permit phishing site might disguise a malicious EIP-2612 signature request as a routine wallet connection step, tricking the victim into unknowingly granting token approval.
Perpetual Swap
A futures-like contract with no expiry date that tracks an asset's price through a funding mechanism.
A trader might use a perpetual swap to gain leveraged price exposure without owning the underlying asset.
PFP Collection
An NFT collection of algorithmically generated character images, commonly used by holders as a social media profile picture, following a shared visual style with varying traits.
A PFP collection holder might use their specific NFT as their profile picture across social media, signaling both ownership and membership in that collection's community.
Phishing
An attempt to trick someone into revealing credentials or approving a harmful transaction, often by impersonating a trusted source.
A message claiming to be wallet support and asking for a seed phrase is a phishing attempt.
Piercing Line and Dark Cloud Cover
Two-candlestick reversal patterns where the second candle opens beyond the first candle's range and closes more than halfway into its body, signaling a bullish (piercing line) or bearish (dark cloud cover) shift.
A piercing line forms when a candle opens below the prior down candle's low but then recovers to close more than halfway into that candle's body, signaling a sharp reversal in buyers' favor.
Pig Butchering Scam
A long-running relationship-based scam that gradually persuades a victim to invest in a fake platform.
Being encouraged by an online-only relationship to invest through an unfamiliar platform is a common pig butchering pattern.
Pivot Points
Predetermined support and resistance levels calculated from the prior period's high, low, and close, used as reference levels for the current period.
A trader can calculate an entire day's pivot levels before the market even opens, since they're derived entirely from the prior period's data.
Plasma
An early Ethereum scaling framework using child chains that periodically commit data roots to the mainchain and rely on fraud proofs for security, largely superseded by rollups.
Plasma's fraud-proof and exit-game design directly influenced the security model later used by optimistic rollups.
Play-to-Earn (P2E)
A crypto gaming model where players can earn tradable crypto tokens or NFTs through gameplay, rather than purely playing for entertainment.
A play-to-earn game might reward players with a native token for completing in-game tasks, which can then be sold on an exchange.
PLONK
A zero-knowledge proving system that uses a single, reusable 'universal' trusted setup supporting many different circuits, rather than requiring a new setup for each one.
A zkEVM project can update its underlying proving circuit as it develops without needing an entirely new trusted setup ceremony, since PLONK's universal setup supports that flexibility.
Point of Control (POC)
The single price level with the highest traded volume within a given period, identified from a volume profile, often treated as a particularly significant support or resistance zone.
A price level identified as the Point of Control, having seen unusually heavy trading volume, is commonly watched as a potential support or resistance zone if price revisits it later.
Point Time-Locked Contract (PTLC)
A Lightning Network payment construction, built on adaptor signatures, that achieves the same conditional payment guarantee as an HTLC with better privacy and efficiency.
A Lightning payment routed using PTLCs is harder to correlate across its multiple hops than the same payment routed using traditional HTLCs, since PTLCs don't share an identifiable linking value across hops.
Points Program
A system awarding non-transferable points for using a protocol, generally intended to track eligibility for a future token airdrop without yet promising one.
A user might accumulate points by depositing funds into a protocol, hoping — but with no guarantee — that the points later convert into a valuable token airdrop.
Politically Exposed Person (PEP)
A person who holds, or has held, a prominent public position, subjecting their financial accounts to enhanced due diligence given their elevated potential exposure to bribery or corruption risk.
A crypto exchange customer identified as a politically exposed person is typically subjected to enhanced due diligence review automatically, regardless of whether any specific suspicious activity has occurred.
Ponzi Scheme
A fraud that pays early investors using funds from newer investors, not genuine returns.
A crypto platform promising unusually high, consistent returns with a vague strategy may be a Ponzi scheme.
Portfolio
The full collection of assets a person or entity holds.
A portfolio might include several different cryptocurrencies in varying proportions.
Portfolio Beta
A weighted-average measure of how sensitive a portfolio's returns are to broader market movements, relative to the market itself.
A portfolio beta above 1 suggests the overall portfolio has historically been more volatile than its reference market, not less.
Portfolio Rebalancing
Periodically adjusting holdings back toward a target allocation as prices drift.
A portfolio might be rebalanced quarterly to correct for drift caused by differing asset performance.
Position Sizing
Deciding how much capital to risk on a single trade, relative to total available capital.
A trader risking a consistent 1% of capital per trade is using a fixed-percentage position-sizing approach.
Position Trading
A trading style holding positions for weeks, months, or longer based on major trend or fundamental analysis, representing the longest-duration end of the active trading spectrum.
A position trader might hold a position for several months based on a thesis about a major structural trend, tolerating significant short-term volatility along the way.
Post-Only Order
An order instruction guaranteeing it will only ever add liquidity as a maker order, automatically canceling rather than executing as a taker.
A post-only order that would otherwise execute immediately against an existing order is automatically canceled instead of filled, guaranteeing it never pays the higher taker fee.
Pre-Mine
Tokens created and allocated before a project's public launch.
A project's pre-mine size and vesting schedule are worth reviewing before investing.
Precompile
A built-in function on a blockchain's virtual machine, implemented in low-level code rather than ordinary smart contract bytecode, for efficiency.
A specific elliptic-curve cryptographic operation might be implemented as a precompile specifically because running it as ordinary contract code would be prohibitively expensive in gas.
Preconfirmation
A fast, economically backed promise from a sequencer or proposer that a submitted transaction will be included exactly as sent, offered well before actual on-chain finality.
A based rollup might rely on economically backed preconfirmations to give users near-instant feedback that their transaction will be included, despite the underlying base chain's slower actual block time.
Prediction Market
A market where participants trade on the outcome of a future event.
A prediction market's price for a given outcome can be read as the market's implied probability estimate.
Preimage Resistance
A property of a secure hash function meaning it's computationally infeasible to work backward from an output to find the original input that produced it.
Preimage resistance is why knowing a hash output doesn't let an attacker work backward to discover the original data that was hashed.
Present Value
The current worth of a future sum of money, discounted back using an assumed rate of return -- reflecting that money today is worth more than the same amount later.
A higher assumed discount rate reduces the present value of a given future sum, since it implies a higher opportunity cost for not having that money today.
Price Feed
A data stream delivering current asset prices to a smart contract, typically sourced from an oracle, that DeFi protocols rely on for pricing, collateral valuation, and liquidations.
A lending protocol relies on a price feed to continuously value a borrower's collateral and determine whether their position has crossed its liquidation threshold.
Price Gap
A break in a price chart where an asset's price jumps from one level to another with no trading occurring in between, often later followed by price moving back to partially or fully fill it.
A price gap can form when major news breaks while a market is closed, causing the price to reopen sharply higher or lower than its previous close with no trading in between.
Price Impact
The amount a trade itself moves an asset's price, distinct from slippage, which also includes price movement from other market activity during execution.
A large order placed against a thin order book or shallow liquidity pool produces significant price impact, even before accounting for any other market activity.
Price-to-Book (P/B) Ratio
A traditional equity valuation multiple comparing share price to a company's accounting book value per share.
A P/B ratio below 1 means a company trades below its accounting book value, which traditional value investors sometimes treat as a starting point for further research.
Price-to-Cash-Flow (P/CF) Ratio
A valuation multiple comparing share price to operating cash flow per share, an alternative to P/E that avoids some accounting distortions.
P/CF is sometimes preferred over P/E specifically when a company's reported earnings are suspected of being distorted by non-cash accounting items.
Price-to-Earnings (P/E) Ratio
A traditional equity valuation multiple comparing a company's share price to its earnings per share -- with no direct equivalent for most crypto assets.
A stock trading at a P/E of 20 means investors are paying 20 times the company's trailing annual earnings per share for a share of ownership.
Price-to-Sales (P/S) Ratio
A valuation multiple comparing share price to revenue per share, useful for evaluating companies without positive earnings.
P/S remains calculable for a company with negative earnings, a scenario where P/E simply doesn't produce a meaningful number.
Primary Market and Secondary Market
The primary market is where a new asset is sold directly by its issuer for the first time; the secondary market is where that same asset is subsequently resold and traded among other holders.
An NFT project only receives proceeds from its primary market mint sale, not from any later secondary market resales, which is part of why royalty mechanisms exist to let creators capture some ongoing value.
Prime Brokerage
A bundle of institutional-grade services -- custody, lending, trade execution -- offered to large institutional clients, typically through a single provider relationship.
A crypto prime brokerage client might access custody, margin financing, and multi-venue trade execution all through a single consolidated provider relationship.
Priority Fee
An optional additional fee paid to a validator to prioritize a transaction.
A wallet's "fast" transaction speed option typically sets a higher priority fee than the "standard" option.
Priority Gas Auction (PGA)
A bidding war in which competing bots repeatedly outbid each other's gas price in the public mempool to get a profitable transaction mined first.
A profitable arbitrage opportunity spotted in the public mempool can trigger a priority gas auction within seconds, as competing bots repeatedly rebid higher gas prices.
Private Key
A secret piece of data that proves ownership of crypto assets and authorizes transactions.
A wallet uses a private key behind the scenes to digitally sign an outgoing transaction.
Private Placement
A sale of securities or tokens directly to a limited number of qualified investors, rather than through a public offering registered with securities regulators.
An early-stage crypto project raising capital from venture investors before any public token sale commonly structures that raise as a private placement under a specific securities-law exemption.
Progressive Tax
A tax system where the rate applied increases as income or gains rise, generally structured in brackets with higher rates on higher portions of income.
In a progressive system, earning slightly more income and crossing into a higher bracket doesn't retroactively tax all prior income at the new, higher rate.
Proof of Authority
A consensus mechanism where a limited, identified set of validators produce blocks.
An enterprise supply-chain network might use proof of authority among a small set of known validators.
Proof of Burn
A consensus mechanism where participants permanently destroy coins to earn the right to validate.
A proof-of-burn network might require destroying an existing coin to earn mining rights on a new chain.
Proof of History
A method for cryptographically ordering events before consensus, used alongside proof of stake on some networks.
A network combining proof of history with proof of stake can process transactions with high throughput.
Proof of Liabilities
A cryptographic method letting an exchange prove the total customer balances it owes, without revealing any individual customer's specific balance.
Proof of liabilities addresses a specific gap in basic proof of reserves: showing what an exchange actually owes, not just what assets it holds.
Proof of Personhood
A verification mechanism establishing that an on-chain identity or account belongs to a unique human being, without necessarily revealing who that person is.
A quadratic funding round without proof of personhood is vulnerable to a single participant splitting their contribution across many wallets to disproportionately boost the matching funds a project receives.
Proof of Reserves
A cryptographic method, typically using a Merkle tree, that lets customers verify an exchange actually holds the assets it claims to.
A customer can use a Merkle proof from an exchange's published proof of reserves to confirm their own balance was genuinely included in the published total.
Proof of Stake
A consensus method that uses committed assets and validator rules to coordinate blockchain updates.
Ethereum uses proof of stake to coordinate validators.
Proof of Work
A consensus method that uses computational work to help choose and secure new blockchain blocks.
Bitcoin uses proof of work to coordinate block production.
Proposal
A formal, documented suggestion for a specific governance action, submitted for a vote.
A governance proposal might request allocating a specific amount of treasury funds to a particular initiative.
Proposal Threshold
The minimum amount of governance tokens or voting power a holder must control before they're allowed to formally submit a new governance proposal.
A DAO might set its proposal threshold at 1% of total token supply, meaning only holders controlling at least that much voting power can formally submit a new proposal.
Proposer-Builder Separation (PBS)
An arrangement that splits the roles of constructing a block (builder) and proposing it to the network (validator), intended to reduce MEV-related centralization risk.
Under PBS, a validator can select the most valuable block a builder offers without needing the technical sophistication to construct that optimized block itself.
Protective Put
An options strategy where an investor holding an asset buys a put option against it, paying a premium to limit downside losses below a chosen strike price.
An investor worried about a near-term crash might buy a protective put on their holdings, accepting the premium cost in exchange for a guaranteed minimum sale price if the market falls sharply.
Proto-Danksharding (EIP-4844)
An Ethereum upgrade (EIP-4844) that introduced cheaper, temporary 'blob' data space for rollups, as a stepping stone toward full Danksharding.
After proto-danksharding activated, many rollups saw their per-transaction fees drop sharply because blob space is priced separately from, and far cheaper than, regular Ethereum execution gas.
Protocol
The set of rules that defines how a blockchain or application operates.
Bitcoin's protocol defines its 21 million coin supply cap and proof-of-work consensus rules.
Protocol Revenue
The fees a protocol actually collects from its real usage, as distinct from token incentives it pays out to attract activity.
A protocol with high trading volume but low protocol revenue relative to its incentive spending may be paying more to attract activity than it earns from it.
Protocol-Controlled Value (PCV)
Assets owned directly by a protocol itself, such as its own treasury-held liquidity, rather than assets deposited by external users that could be withdrawn at any time.
A protocol that owns a large share of its own liquidity pool through protocol-controlled value is less exposed to a sudden liquidity exodus than one relying entirely on externally supplied, incentive-driven deposits.
Protocol-Owned Liquidity
Liquidity that a protocol itself owns, rather than renting it from external liquidity providers.
A protocol might use its treasury to directly acquire and own its own liquidity pool positions.
Proxy Contract
A smart contract that forwards calls to a separate logic contract, allowing the underlying logic to be upgraded without changing the contract address users interact with.
Users interact with a proxy contract's fixed address indefinitely, even as the underlying logic it delegates to is upgraded behind the scenes.
Pruned Node
A full node that discards old, already-verified historical data to save storage space.
Many individuals run pruned nodes at home specifically because of their far lower storage requirements.
Pseudonymity
Being identified by an address rather than a real-world identity, though not fully anonymous.
Bitcoin transactions are pseudonymous, tied to addresses rather than names, but publicly viewable.
Public Key
A piece of data derived from a private key that can be shared publicly and is used to verify signatures or derive wallet addresses.
A user shares a wallet address, derived from a public key, so someone else can send them funds.
Public vs. Private Blockchain
A distinction between a blockchain anyone can read and verify (public) and one whose data access is restricted to a specific, authorized group (private).
Anyone can independently verify Bitcoin's complete transaction history, since it's a public blockchain with no central gatekeeper restricting data access.
Puell Multiple
An on-chain metric comparing the daily value of newly mined coins to its own long-run moving average, used to gauge mining profitability and market cycle extremes.
A Puell Multiple reading far above its historical norm suggests miner revenue is unusually elevated relative to its own recent trailing average, a condition some analysts associate with late-cycle conditions.
Pump and Dump
A scheme where organizers artificially inflate an asset's price through coordinated buying or hype, then sell their own holdings into the resulting demand.
A pump and dump scheme most effectively targets a low-liquidity asset, where relatively modest coordinated capital can produce an outsized price move.
Put Option
An option contract granting the right to sell an asset at a set price.
A put option becomes more valuable as the underlying asset's price falls below its strike price.
Pyramid Scheme
A fraud where profit mainly comes from recruiting new participants, not a genuine product or service.
A crypto "opportunity" that pays you a percentage of every deposit made by people you recruit, and by the people they recruit, is a pyramid scheme warning sign regardless of what product it claims to sell.
Q
Quadratic Funding
A matching-funds mechanism that weights the number of individual contributors to a project more heavily than the total amount contributed.
A project with 1,000 small individual contributors receives proportionally more quadratic matching funds than one with the same total raised from just a few large donors.
Quadratic Voting
A voting model where the cost of additional votes on one option rises quadratically.
Under quadratic voting, casting 4 votes toward one option costs more than 4 times what a single vote costs.
Qualified Custodian
A regulated institution, such as a bank or trust company, that meets specific legal requirements to hold client assets on behalf of investment advisers or funds.
A registered investment adviser managing crypto on behalf of clients may be required to hold those assets with a qualified custodian rather than self-custodying them directly.
Qualified Institutional Buyer (QIB)
A US securities-law classification for large institutional investors, permitted to participate in certain private securities offerings unavailable to the general public.
A private crypto fund offering restricted to Qualified Institutional Buyers is structured under a different regulatory pathway than a public token sale.
Quanto Contract
A derivatives contract whose underlying asset is priced in one currency but settled in a different currency, at a fixed conversion rate that removes exposure to the second currency's exchange rate.
A quanto contract tracking an asset's dollar-denominated price but settled in Bitcoin at a fixed conversion rate removes the holder's exposure to Bitcoin's own exchange rate fluctuations relative to the dollar.
Quorum
The minimum participation required for a governance vote to be considered valid.
A governance proposal might require at least 4% of circulating tokens to vote before it can pass.
R
Rage Quit
A DAO mechanism letting a member exit and withdraw their proportional share of the treasury if they disagree with a passed governance decision.
A DAO member who disagrees with a passed proposal can rage quit, withdrawing their proportional treasury share rather than remaining bound by the decision.
RANDAO
Ethereum's mechanism for generating pseudo-randomness used in validator selection, built from contributions many validators each add to collectively.
RANDAO builds Ethereum's validator-selection randomness from many validators' contributions combined together, rather than any single trusted source.
Rate of Change (ROC) and Momentum
Simple, unsmoothed oscillators that measure the percentage (ROC) or absolute (Momentum) change in price over a fixed look-back period.
ROC crossing above zero means price is now higher than it was the full look-back period ago, regardless of what happened in between.
Real Estate Tokenization
Representing ownership of, or a financial claim on, a physical property as a blockchain-based token, aiming to enable fractional ownership and faster, more liquid transfers.
A tokenized real estate offering might let an investor purchase a small fractional stake in a commercial property, rather than needing the full capital to buy the entire property outright.
Real Return
An investment return adjusted for inflation, reflecting actual change in purchasing power rather than the raw, nominal percentage gain.
A 5% nominal return during a period of 7% inflation represents a negative real return, despite the account balance itself having grown.
Real Yield
DeFi yield paid from genuine protocol revenue rather than newly issued reward tokens.
A protocol paying yield from trading fees it actually collects is commonly described as offering real yield.
Real-World Asset (RWA)
A traditional, off-chain asset — such as real estate, treasury bills, or a commodity — represented on-chain as a token.
A tokenized treasury-bill product lets a holder gain exposure to that traditional asset's yield through an on-chain token.
Realized Capitalization
The aggregate value of a network's circulating supply, with each coin valued at the price it last moved on-chain rather than at today's price.
Realized capitalization staying flat while market capitalization rises can indicate price appreciation without much actual coin movement or new cost-basis formation.
Realized Gain
A gain that has actually been locked in by selling or disposing of an asset.
Selling an appreciated asset converts an unrealized gain into a realized one.
Realized Loss
The actual, on-chain-measurable loss generated when a coin moves at a lower price than it was last acquired at.
A sustained period of elevated realized losses across a network is commonly associated with capitulation-style selling during a market downturn.
Realized Profit
The actual, on-chain-measurable profit generated when a coin moves at a higher price than it was last acquired at.
A coin moving on-chain at a price above where it was last acquired contributes to aggregate realized profit, an on-chain-measurable figure.
Realized Volatility
A backward-looking measure of how much an asset's price actually fluctuated over a historical period, as distinct from implied volatility, which reflects the market's forward-looking expectation.
An asset whose realized volatility over the past 30 days was unusually low might still have elevated implied volatility if the market expects a major upcoming event to increase future price swings.
Rebalancing
Adjusting a portfolio's holdings back toward a previously chosen target allocation.
A portfolio targeting a 50/50 split might need rebalancing after one asset significantly outperforms the other.
Rebase Token
A token whose total supply automatically expands or contracts across every holder's balance, rather than its price moving to reflect supply/demand alone.
A rebase token's holder balance can change automatically between two points in time, even without that holder buying or selling anything.
Recovery Scam
A scam that targets someone who already lost crypto, offering to recover it for an upfront fee that results in a second loss.
An unsolicited message offering fund-recovery services shortly after a scam becomes visible on-chain is a common recovery-scam pattern.
Recursive Proof (Proof Aggregation)
A zero-knowledge proof that verifies the correctness of one or more other proofs, letting many computations be compressed into a single, final proof.
A zk-rollup processing thousands of transactions in a batch can use recursive proofs to aggregate all their individual proofs into a single proof verified once on the base chain.
Red Team
A security team or firm that simulates realistic attacks against a protocol or organization to uncover exploitable weaknesses before real attackers do.
A protocol's red-team engagement might test not just its smart contracts but also whether team members can be socially engineered into leaking sensitive operational information.
Redemption Fee
A fee charged when a depositor withdraws from a fund, vault, or pool, often used to discourage short-term capital and compensate remaining depositors for withdrawal-related costs.
A yield vault charging a redemption fee for withdrawals made within the first week of depositing discourages short-term capital from quickly entering and exiting to capture a temporary yield spike.
Redemption Mechanism
The process that lets a stablecoin holder exchange it back for the underlying asset or reserve at its target value.
A fast, reliable redemption mechanism helps a stablecoin recover quickly from a temporary depeg.
Reentrancy Attack
A smart contract exploit where a malicious contract repeatedly re-enters a function before it finishes.
A reentrancy attack repeatedly calls back into a vulnerable function before its state update completes.
Reentrancy Guard
A defensive smart contract pattern that prevents a function from being called again before its first execution finishes, specifically to block reentrancy attacks.
A reentrancy guard blocks a function from being called again before its first execution finishes, directly preventing the reentrancy attack technique.
Registered Investment Adviser (RIA)
A firm or individual registered with securities regulators to provide investment advice for a fee, bound by a fiduciary duty to act in clients' best interests, including on crypto allocations.
A Registered Investment Adviser recommending a client allocate a portion of their portfolio to a spot crypto ETF must be able to justify, under their fiduciary duty, that the allocation genuinely suits that specific client's circumstances.
Regulation D
A U.S. securities law exemption letting companies raise capital by selling unregistered securities, typically to accredited investors, without a full public offering.
A crypto project treating its token sale as a securities offering might rely on Regulation D to sell to accredited U.S. investors without registering the offering with the SEC.
Regulation S
A U.S. securities law exemption allowing securities to be sold to non-U.S. investors outside the United States without SEC registration.
A token issuer selling to international investors outside the U.S. might rely on Regulation S for that portion of the sale, while using Regulation D for its U.S. accredited investors.
Regulatory Sandbox
A supervised program letting companies test new financial products under relaxed regulatory conditions.
A crypto startup might test a new product within a regulatory sandbox before full commercial launch.
Rehypothecation
A custodian or platform re-using a customer's deposited assets for its own purposes, such as lending them out, rather than simply holding them.
A platform that rehypothecates customer deposits may not actually hold those specific assets in reserve at the moment a customer tries to withdraw them.
Relative Strength (Comparative)
A measure of how one asset's price performance compares to another benchmark asset over time, used to identify which asset is outperforming independent of the broader market's overall direction.
An altcoin's comparative relative strength against Bitcoin can be rising even while both assets fall in dollar terms, as long as the altcoin is falling by less than Bitcoin is.
Relative Strength Index (RSI)
A momentum oscillator, scaled 0 to 100, that measures the speed and magnitude of recent price changes to flag overbought and oversold conditions.
RSI diverging from price — price making a new high while RSI makes a lower high — is a commonly watched, though not guaranteed, warning sign.
Relative Vigor Index (RVI)
An oscillator comparing a period's closing price to its opening price, relative to its trading range, based on prices closing higher in uptrends.
RVI is built from the relationship between a period's open and close, distinct from indicators built purely from the high-low range or closing price alone.
Relay Chain
The central blockchain in a parachain architecture that provides shared consensus and security for all the connected parachains, without directly hosting their application logic.
A relay chain's validator set secures every connected parachain simultaneously, rather than requiring each individual parachain to separately recruit and maintain its own full validator set.
Replace-by-Fee (RBF)
A Bitcoin feature letting a sender rebroadcast an unconfirmed transaction with a higher fee, replacing the original to get it confirmed faster.
A sender whose transaction is stuck in the mempool due to an underestimated fee can use Replace-by-Fee to rebroadcast it with a higher fee and get it confirmed sooner.
Replay Attack
Reusing a previously valid transaction, potentially on a different network, without authorization.
A hard fork without proper replay protection can let a transaction on one chain be unintentionally replayed on the other.
Replay Protection
A mechanism that prevents a transaction valid on one chain from also being validly replayed on a related chain after a fork.
Without replay protection, a transaction intended for only one post-fork chain could unintentionally also execute on the other chain, since both initially share the same rules.
Request for Quote (RFQ)
A trading model where a taker requests a price directly from one or more market makers, who respond with a firm, executable quote.
A large trader might use an RFQ system specifically to get a firm quote for their full trade size, rather than moving a public order book's visible price by executing against it directly.
Reserve Attestation
A third-party report confirming a stablecoin issuer's reserves match its circulating supply.
A stablecoin issuer might publish a monthly reserve attestation from an independent accounting firm.
Reserve Composition
The specific mix of assets, such as cash, government bonds, or other instruments, that back a stablecoin's outstanding supply.
A stablecoin backed primarily by cash and short-term government bonds generally has lower reserve-composition risk than one holding a larger share of less liquid instruments.
Restaking
Using already-staked assets or a liquid staking token to simultaneously secure an additional protocol.
A restaking participant's already-staked assets can help secure an additional protocol beyond the base network.
Retail Investor
An individual, non-professional investor trading with their own personal funds.
A retail investor typically buys crypto directly through an exchange with their own personal funds.
Retroactive Public Goods Funding
A funding model that rewards projects for value they've already demonstrably created, rather than funding projects based on proposals for future work.
A retroactive public goods funding round might evaluate and reward infrastructure projects based on their documented impact over the prior year, not proposals for the year ahead.
Return on Equity (ROE)
A traditional profitability ratio measuring how efficiently a company generates profit from its shareholders' equity capital.
ROE is commonly used to compare how efficiently different companies within the same industry convert shareholder capital into profit.
Return on Invested Capital (ROIC)
A profitability ratio measuring how efficiently a company generates returns on all the capital invested in it, both debt and equity.
ROIC exceeding a company's cost of capital is commonly read as evidence the company is genuinely creating economic value, not just generating accounting profit.
Return on Investment (ROI)
The gain or loss from an investment, expressed as a percentage of what was originally put in.
An investment that grows from $1,000 to $1,250 has a 25% ROI.
Reveal (NFT)
The moment a minted NFT's final artwork and traits become visible to its owner.
Before a reveal, a minted NFT typically shows a placeholder image instead of its final artwork.
Revenue Growth Rate
The percentage change in a company's revenue over a period, measuring top-line business expansion.
A company can show strong revenue growth while still losing money overall, if its costs are growing even faster than its revenue.
Ring Signature
A cryptographic signature that mixes a real transaction with decoy outputs, so an outside observer can't isolate which one is genuine.
A ring signature lets a network confirm a transaction is authorized without revealing which specific output in the ring was the genuine spend.
Risk of Ruin
The probability that a trading or betting strategy eventually loses enough to become unrecoverable, given its edge, position sizing, and variance.
Two traders with an identical statistical edge can have very different risk-of-ruin outcomes purely based on how much each risks per trade.
Risk Parameter
Any of the configurable settings a DeFi protocol's governance uses to control exposure to a given asset, such as its debt ceiling, liquidation threshold, or collateral factor.
A lending protocol's governance might vote to raise a specific asset's risk parameters, such as its debt ceiling, after that asset demonstrates months of stable liquidity and trading volume.
Rollup
A Layer 2 scaling method that bundles many transactions before settling them on a base chain.
Rollups are a common Layer 2 approach used to reduce fees on busy base blockchains.
Rollup-as-a-Service (RaaS)
A provider that handles the technical infrastructure of launching and operating a rollup, letting a team deploy one without building that infrastructure themselves.
A team using a RaaS provider can launch its own dedicated rollup without building and maintaining the underlying sequencer and data-availability infrastructure itself.
Royalty Enforcement
Technical mechanisms intended to ensure an NFT creator's royalty is actually collected on a secondary sale, rather than left optional for a marketplace to honor.
Several major NFT marketplaces have made creator royalties optional specifically to compete on lower effective trading fees, a documented, real trend.
RPC Node
A node that applications connect to in order to read data from or send transactions to a blockchain.
A wallet app typically connects to an RPC node to check balances and submit transactions.
Rug Pull
A scam where a project's creators abandon it and take investor funds with them.
A token whose liquidity is suddenly removed by its creators, crashing its price, is a common rug pull pattern.
Runes
A fungible token protocol built directly on Bitcoin, using its UTXO model, introduced as a more efficient alternative to earlier Bitcoin token standards.
Runes was specifically designed to be more efficient with Bitcoin's UTXO set than the earlier BRC-20 token standard.
S
Safety (Consensus)
A consensus property guaranteeing the network never finalizes two conflicting, contradictory versions of the truth.
A network maintaining safety never finalizes two conflicting versions of its history, even under adverse conditions.
Sanctions Screening
Checking transactions or users against government sanctions lists for compliance purposes.
A regulated exchange's sanctions screening might flag a wallet address linked to a sanctioned entity.
Sandwich Attack
Placing trades both before and after a victim's trade to profit from its price impact.
A large swap on a decentralized exchange with a public mempool can be a target for a sandwich attack.
Satoshi
The smallest unit of Bitcoin, equal to one hundred-millionth of a single BTC.
A Lightning Network payment might be denominated in satoshis rather than whole bitcoin.
Scalping
A trading style that targets many small, quick profits from small price moves, typically closing positions within minutes.
A scalper might open and close dozens of positions in a single day, each targeting only a small price move.
Schaff Trend Cycle
An indicator that applies a stochastic-style calculation to MACD, designed to identify trend-cycle turns faster than MACD alone.
The Schaff Trend Cycle applies a Stochastic Oscillator-style calculation to MACD's own output, rather than to price directly.
Schedule D
A U.S. tax form summarizing a taxpayer's total capital gains and losses for the year, drawing on the detailed transaction-level figures reported on Form 8949.
A crypto investor's Schedule D combines the totals from their Form 8949 into net short-term and long-term capital gain or loss figures for the year.
Schnorr Signature
A digital signature scheme that allows multiple signatures to be mathematically combined into one, enabling more compact and private multi-signature transactions.
A multisig transaction using Schnorr signature aggregation can look identical on-chain to an ordinary single-signer transaction, improving privacy.
secp256k1
The specific elliptic curve that Bitcoin and Ethereum use as the mathematical foundation for their ECDSA signatures and public-private key pairs.
Every Bitcoin private key is a randomly selected number valid within the secp256k1 curve's defined range, with the corresponding public key derived mathematically from it.
Secret Sharing
Splitting a seed phrase into several pieces, requiring a minimum number of them to be brought together to reconstruct the original.
A seed phrase split via secret sharing into 5 pieces, requiring any 3 to reconstruct it, survives the loss of up to 2 pieces without losing access.
Security Council
A small, trusted multisig group with emergency authority to pause a protocol or override its normal governance process in the event of a critical bug or attack.
A protocol's security council might pause a vulnerable smart contract function within minutes of an exploit being detected, far faster than a standard governance vote and timelock would allow.
Security Token
A crypto token that represents an investment contract or ownership interest subject to securities regulation.
A token sold with promises of profit derived from a third party's efforts may be evaluated as a security token.
Seed Phrase
A sequence of words that can recreate a wallet's private keys and access its assets.
Writing a seed phrase on paper and storing it securely can provide a physical backup.
Segregated Custody
A custody arrangement where a customer's assets are held separately and distinctly, rather than pooled together with other customers' assets.
In a custodian's insolvency, segregated assets are generally easier to clearly identify and return to their rightful owner than assets pooled in a shared, commingled account.
SegWit
A Bitcoin protocol upgrade that restructured transaction data to increase effective capacity.
A Bitcoin address starting with "bc1" is typically a SegWit-compatible address.
Seigniorage
The value created by issuing new currency above its production cost -- in crypto, commonly used to describe the profit mechanism behind certain algorithmic stablecoin designs.
A seigniorage-style stablecoin design generates value for a separate token specifically by expanding the stablecoin's supply during periods of rising demand.
Self-Custody
Holding and controlling your own private keys instead of relying on a third party.
Moving funds from an exchange to a personal hardware wallet is a common way to move into self-custody.
Self-Directed IRA
A U.S. individual retirement account structure that lets the account holder invest in a broader range of assets, including crypto, beyond the stocks, bonds, and funds a typical IRA offers.
An investor using a self-directed IRA to hold Bitcoin can potentially defer or avoid capital gains tax on its appreciation, compared to holding the same Bitcoin in an ordinary taxable brokerage account.
Sequencer
The party or system that orders transactions on a Layer 2 rollup before they're posted to the base chain.
A rollup's sequencer being temporarily offline can prevent new transactions from being processed on that network.
Session Key
A temporary, limited-permission key a smart account can authorize, letting an application act on a user's behalf without repeated full-wallet approvals.
An on-chain game might use a session key to let a player perform many in-game actions without a separate wallet signature prompt for each one.
Settlement Price
The official price used to determine final profit or loss on a futures contract at expiry, which may differ slightly from the last traded price.
A futures contract's settlement price is generally calculated using a defined methodology, not simply whatever its single last trade happened to be.
SHA-256
A specific hash function that produces a fixed 256-bit fingerprint of input data, used by Bitcoin.
Bitcoin miners repeatedly compute SHA-256 hashes as part of the proof-of-work mining process.
Shamir's Secret Sharing
A cryptographic method for splitting a secret, such as a wallet seed, into multiple shares so that only a minimum threshold of them can reconstruct the original.
A user might split their seed phrase into five Shamir shares distributed across trusted family members, requiring any three to reconstruct it if the wallet needs to be recovered.
Sharding
Splitting a network's data and workload across multiple smaller parts to increase capacity.
Sharding is one of several approaches networks explore to increase transaction throughput.
Shared Security
A model where a new network or service borrows an established network's existing economic security, rather than bootstrapping its own validator set from scratch.
Shared security lets a new service launch with borrowed economic security from an established network, rather than needing years to bootstrap its own from scratch.
Shared Sequencer
A sequencer service used by multiple Layer 2 rollups instead of each running its own.
Multiple rollups using the same shared sequencer can potentially coordinate transaction ordering across chains.
Sharpe Ratio
A measure of return earned per unit of volatility risk taken.
Two assets with the same raw return but different volatility will have different Sharpe ratios.
Shielded Transaction
A transaction that uses zero-knowledge proofs to hide its sender, recipient, and amount, while still letting the network verify it's valid.
A shielded transaction hides the sender, recipient, and amount from public view, while a zero-knowledge proof still lets the network confirm the transaction followed all the rules.
Shooting Star and Inverted Hammer
A single candlestick with a small body near the bottom and a long upper wick, interpreted as a bearish reversal (shooting star) after an uptrend or a cautious bullish signal (inverted hammer) after a downtrend.
The identical candlestick shape is called a shooting star when it appears after an uptrend, signaling a possible bearish reversal, and an inverted hammer when it appears after a downtrend, signaling cautious bullish interest.
Short Position
A position that profits if an asset's price decreases.
A trader who expects a price to fall might open a short position to try to profit from that decline.
Short Squeeze
A rapid price rise that forces short sellers to buy back their positions, accelerating the move further.
A short squeeze can cause a price to rise sharply and quickly, beyond what typical demand alone would produce.
Short-Term vs. Long-Term Capital Gains
A tax distinction between gains on assets held briefly, generally taxed at higher ordinary income rates, and gains on assets held longer, often eligible for lower preferential rates.
An investor selling crypto held for 13 months might owe tax at the lower long-term capital gains rate, while selling an equivalent position held for only 11 months would be taxed at the higher short-term rate.
Sidechain
A separate blockchain connected to a main chain, often used to extend its capabilities.
A sidechain might process transactions faster or more cheaply than the main chain it connects to.
Silent Payments
A Bitcoin privacy proposal letting a sender generate a unique, unlinkable receiving address for the recipient from a single published public key, without any interaction between them.
A merchant publishing a single Silent Payments address can receive many separate customer payments, each landing at a different, unlinkable on-chain address automatically.
SIM Swap
An attack where someone transfers your phone number to their device to intercept codes.
A SIM swap can let an attacker bypass text-message-based two-factor authentication on an exchange account.
Simple Moving Average (SMA)
The unweighted average of an asset's closing price over a fixed number of recent periods.
A 50-day and 200-day SMA crossing is a commonly watched, long-term trend-change signal.
Slashing
A penalty that removes part of a validator's staked funds for provable misbehavior.
A validator caught double-signing conflicting blocks can be slashed under many proof-of-stake designs.
Slashing Condition
A specific type of validator misbehavior that triggers a stake penalty.
Double-signing conflicting blocks is a common, severely-penalized slashing condition across many networks.
Slippage
The difference between the expected price of a trade and the price at which it executes.
A large swap in a shallow pool can experience more slippage than a small swap in a deep pool.
Slippage Tolerance
A user-set maximum amount of slippage a trade will accept before it's automatically rejected, protecting against an unexpectedly worse execution price.
A slippage tolerance set too tight can cause a swap to repeatedly fail during ordinary price volatility, rather than ever actually executing.
Slot
A fixed time window in which one validator may propose a block in proof of stake.
A proof-of-stake network might have a new slot roughly every 12 seconds.
Smart Account
A wallet controlled by programmable smart contract logic rather than a single private key, enabling features standard wallets can't offer.
A smart account can be programmed to require multiple approvals for a large transaction while allowing smaller ones through with a single signature.
Smart Contract
Self-executing code stored on a blockchain that runs automatically when its conditions are met.
A smart contract can automatically release funds once two parties both confirm a condition has been met.
Smart Contract Wallet
A wallet whose funds are controlled by a smart contract rather than a single private key, enabling programmable rules like multiple approvers or spending limits.
A smart contract wallet can enforce a rule requiring any withdrawal above a certain size to wait 24 hours before executing, giving the owner time to notice and cancel unauthorized transactions.
Smoothed Moving Average (SMMA / RMA)
A moving average that incorporates all historical data with gradually diminishing weight, the smoothing method used internally by RSI and ATR.
RSI's own internal averaging of gains and losses uses Wilder's smoothing (SMMA/RMA), not a standard SMA or EMA.
Smoothing
Averaging recent data to reduce short-term noise and reveal an underlying trend.
A 20-period simple moving average smooths price by averaging the last 20 closes equally.
Snapshot Block
A specific, predetermined block height used as the reference point for determining who held which assets, used to fairly distribute an airdrop or weight an off-chain governance vote.
A project airdropping tokens to early users might take a snapshot at a specific block height, basing each wallet's allocation on its token balance at that exact historical moment.
Snapshot Voting
Off-chain governance voting based on token holdings recorded at a specific past block.
A DAO might use snapshot voting to gauge community sentiment without the gas cost of an on-chain vote.
SOC 2 Type II Audit
An independent audit report assessing whether a service organization's security, availability, and confidentiality controls operated effectively over a sustained period.
An institutional custodian pursuing a SOC 2 Type II audit must demonstrate that its security controls operated effectively over a sustained multi-month observation period, not just that they were well designed on paper.
Social Engineering
Manipulating a person, rather than software, into giving up access or funds.
Someone posing as customer support and asking for a seed phrase is using social engineering.
Social Login
A wallet onboarding method letting users create or access a crypto wallet using a familiar account, such as an email or existing social or Google account, instead of managing a seed phrase directly.
A new user can create a crypto wallet through social login using their existing email account, without needing to understand or manage a seed phrase on day one.
Social Recovery Wallet
A wallet that lets trusted contacts help restore access without a traditional seed phrase.
A social recovery wallet might require agreement from 3 of 5 trusted guardians to restore access.
Soft Cap
The minimum amount a token sale aims to raise for a project to proceed, as opposed to the maximum it's capped at.
A token sale that fails to reach its soft cap is generally expected to refund contributors rather than proceed with a smaller-than-planned raise.
Soft Fork
A protocol change that remains compatible with nodes running older software.
A soft fork might reduce the maximum allowed block size, which older nodes would still see as valid.
Soft Peg
A target exchange rate a stablecoin aims to track closely without an absolute guarantee, allowing for some tolerated deviation.
A stablecoin with a soft peg might trade at $0.998 or $1.002 during normal conditions, without this being considered a genuine depeg event.
Solidity
The most widely used programming language for writing Ethereum smart contracts.
Most Ethereum DeFi protocols have their core smart contracts written in Solidity.
Solo Staking
Running your own validator node directly, with full control and full responsibility, as opposed to delegating to someone else's validator or using a custodial product.
A solo staker is solely responsible for their own validator's uptime, since there's no delegated operator or custodial platform to share that responsibility.
Solver (Intents)
A specialized third party that competes to find and execute the best way to fulfill a user's stated trading intent, in exchange for a portion of the resulting value.
A solver might fulfill a user's swap intent by sourcing liquidity from several different venues simultaneously, finding a better combined price than any single venue could offer alone.
Sophisticated Investor
A legal classification, used in some non-U.S. jurisdictions, for an investor deemed to have enough financial knowledge or experience to understand higher-risk investments without the full protections given to retail investors.
A crypto investment fund marketed only to sophisticated investors in the UK faces different regulatory requirements than one marketed broadly to ordinary retail investors.
SOPR (Spent Output Profit Ratio)
A measure of whether coins moving on-chain are, in aggregate, being sold at a profit or a loss relative to when they were last acquired.
SOPR dipping toward or below 1 during a downtrend is commonly discussed as reflecting holders capitulating and selling near their original cost.
Sortino Ratio
A risk-adjusted return metric similar to the Sharpe Ratio, but measuring volatility using only downside price moves, rather than penalizing upside volatility as well.
An asset with large, favorable price spikes but comparatively contained downside moves would show a meaningfully higher Sortino Ratio than Sharpe Ratio, since the Sortino Ratio doesn't penalize the upside volatility at all.
Soulbound Token
A non-transferable token permanently tied to a specific wallet.
A completed course credential might be issued as a soulbound token rather than a tradeable NFT.
Sovereign Rollup
A rollup that posts its transaction data to a base layer for availability, but handles its own settlement and dispute resolution independently.
A sovereign rollup borrows a base layer's data availability guarantees while handling its own settlement rules independently, unlike a traditional rollup's reliance on base-layer contracts.
Sovereign Wealth Fund
A state-owned investment fund managing a country's national savings or surplus revenue, some of which have begun allocating a portion of their holdings to crypto assets.
A sovereign wealth fund disclosing a crypto ETF position is often read as a signal of growing institutional confidence, even though the position typically represents a very small fraction of the fund's total assets.
Specific Identification
A cost-basis accounting method that lets a taxpayer choose exactly which specific units of an asset were sold, rather than following a fixed order.
A taxpayer using specific identification might deliberately choose to sell units acquired at a higher cost basis, to minimize a reported capital gain.
Spinning Top
A candlestick with a small body centered between roughly equal upper and lower wicks, reflecting a volatile period in which neither buyers nor sellers gained a decisive advantage.
A spinning top forming after a strong, sustained rally is often watched as an early sign that buying conviction may be weakening, similar to how a doji is interpreted in the same context.
Spoofing (Trading)
Placing large orders with no intention of executing them, to create a false impression of supply or demand and move the price, before canceling them.
A spoofer places a large sell wall just above the current price to discourage buyers, then cancels it once the price has dropped and buys at the lower level.
Spot ETF
An exchange-traded fund that holds the actual underlying asset itself, as opposed to futures contracts tied to its price.
A spot bitcoin ETF's custodian holds real bitcoin corresponding to the fund's outstanding shares.
Stability Fee
An ongoing fee charged on debt minted through a Collateralized Debt Position, functioning similarly to interest on a traditional loan.
A CDP holder must repay both the original minted debt and the accrued stability fee to reclaim their locked collateral.
Stablecoin
A cryptocurrency designed to maintain a stable value, often by tracking a currency like the US dollar.
A stablecoin tracking the US dollar aims to stay close to a value of one dollar per unit.
Stablecoin Attestation
A periodic independent report confirming that a stablecoin issuer's reserves match its outstanding token supply at a specific point in time.
A stablecoin issuer publishing monthly attestations gives users more frequent, up-to-date assurance about reserve backing than one publishing only an annual attestation.
Stablecoin Supply Ratio (SSR)
Bitcoin's market capitalization divided by the total stablecoin supply, used as a rough gauge of potential stablecoin-funded buying power.
A falling SSR, driven by stablecoin supply growing faster than Bitcoin's market cap, is commonly discussed as a sign of growing potential buying power on the sidelines.
Staking
Committing crypto to help secure a proof-of-stake network, often in exchange for rewards.
Ethereum validators stake ETH to participate in the network's proof-of-stake consensus.
Staking Pool
A group of token holders combining their stake to meet a minimum requirement or improve reliability.
A staking pool can let someone participate in staking rewards without meeting a network's full minimum stake requirement alone.
Standard Deviation (as a Volatility Indicator)
A statistical measure of how dispersed an asset's prices are around their average over a period — the direct input behind Bollinger Bands' width.
Bollinger Bands' width is directly derived from a rolling standard deviation calculation applied to price.
State Bloat and Stateless Client
State bloat describes a blockchain's ever-growing storage requirement for current account and contract data; a stateless client is a proposed design letting nodes verify blocks without storing that full state.
Left unaddressed, state bloat can make running a full node progressively more resource-intensive over time, as the total account and contract data needed for validation keeps growing.
State Channel
An off-chain channel letting participants exchange many updates before settling a final state on-chain.
The Lightning Network's payment channels are a specific, payments-focused application of the state channel concept.
State Root
A single cryptographic hash, included in each block, that represents the entire current state of the blockchain at that point.
A light client can verify a specific account's balance against a block's state root without downloading and storing the network's entire state itself.
Statistical Arbitrage
A trading strategy that uses statistical relationships between assets to identify and trade temporary pricing divergences expected to revert.
A statistical arbitrage strategy might trade two historically correlated assets whenever their price ratio diverges unusually far from its typical historical range.
Stealth Address
A unique, one-time destination address generated for each incoming payment, so a single published address doesn't reveal all funds received.
A recipient can publish a single stealth address publicly, yet every payment sent to it actually lands at a different, unlinkable on-chain destination.
Stochastic Oscillator and Stochastic RSI
An oscillator comparing a closing price to its recent high-low range, and a variant that applies the same formula to RSI instead of price.
A Stochastic Oscillator reading above 80 is commonly discussed as overbought, and below 20 as oversold, similar in spirit to RSI's thresholds.
Stock-to-Flow
A scarcity model that divides an asset's existing total supply (stock) by its annual rate of new production (flow), used to argue that increasing scarcity should raise value.
Bitcoin's stock-to-flow ratio increases sharply at each halving, since the flow (newly mined supply) is cut in half while the existing stock changes comparatively little.
Stop-Limit Order
An order that becomes an ordinary limit order once a specified stop price is reached, combining a stop-loss trigger with a limit order's precise price control.
A trader using a stop-limit order to sell might set a stop price to trigger the order and a slightly lower limit price, accepting some execution-price flexibility in exchange for a guaranteed worst-case price.
Stop-Loss Order
An order that automatically closes a position once a specified loss-limiting price is reached.
A trader might set a stop-loss order 10% below their entry price to cap potential loss on a position.
Straddle
An options strategy buying both a call and a put at the same strike price and expiration, profiting from a large price move in either direction.
A trader expecting a major price swing around a scheduled network upgrade, but unsure of the direction, might buy a straddle to profit regardless of which way the price moves.
Strangle
An options strategy buying a call and a put at different, typically further out-of-the-money strike prices, profiting from a large move but at a lower upfront cost than a straddle.
A trader expecting significant volatility but wanting to pay less upfront than a straddle would cost might use a strangle instead, accepting that it needs a larger price move to profit.
Stratum Protocol
A communication protocol used by miners to coordinate work with a mining pool.
Mining hardware typically connects to a pool's server using the Stratum protocol to receive work.
Strike Price
The predetermined price at which an option contract can be exercised.
A call option is generally only worth exercising if the market price is above its strike price.
Structured Note
A financial instrument combining a bond-like component with a derivative tied to a crypto asset's performance, offering a customized risk-return profile such as partial downside protection.
A structured note offering partial downside protection on Bitcoin might cap an investor's upside in exchange for limiting losses if Bitcoin's price falls below a specified threshold by maturity.
Subgraph
An open API that indexes and organizes blockchain data for a specific application.
A DeFi application might use a subgraph to efficiently query its own protocol's historical activity.
Submarine Swap
A Lightning Network mechanism that trustlessly swaps on-chain funds for off-chain Lightning funds, or vice versa, using the same hashed-timelock structure as a Lightning payment.
A Lightning wallet might use a submarine swap behind the scenes to let a user deposit funds from an on-chain address directly into their Lightning balance.
Subnet
A customizable, independent network of validators that can run its own blockchain with its own rules, created within a broader platform architecture like Avalanche.
A project needing specific regulatory compliance features or specialized performance characteristics might launch its own subnet, configuring its own validator and token rules independently of the primary network.
Supermajority
A voting threshold requiring more than a simple majority, such as two-thirds or three-quarters, typically used for higher-stakes governance decisions.
A DAO might require only a simple majority for routine grant proposals, but a two-thirds supermajority for any proposal to modify the DAO's own core governance rules.
Supertrend Indicator
A trend-following overlay, calculated from Average True Range and price, that flips above or below price to signal a trend direction change.
Supertrend flipping from below price to above price is commonly read as a signal that the trend has reversed from up to down.
Supply Chain Attack (Crypto)
An attack that compromises a trusted piece of software (such as a library, package, or browser extension) rather than directly targeting the end user.
A single compromised code package can silently affect every wallet application that depends on it, a key reason supply chain attacks are so consequential.
Supply Distribution
How a token's total circulating supply is spread across different holders, commonly analyzed by grouping addresses into size tiers such as whales, mid-size holders, and small holders.
A token where the top ten addresses hold more than half of total supply has a highly concentrated supply distribution, implying greater manipulation and governance-concentration risk.
Supply Shock
A sudden, sharp reduction in the rate of new supply entering the market, which can meaningfully affect price if demand stays constant or grows.
Bitcoin's halving events are commonly described as supply shocks, since they abruptly and predictably cut new issuance by half at a fixed interval.
Support and Resistance
Price levels where an asset has historically tended to stop falling (support) or stop rising (resistance), used in technical analysis to anticipate where price reactions might occur.
An asset that has bounced upward from the same price level three separate times has established that level as a notable support zone.
Suspicious Activity Report (SAR)
A report a regulated financial institution, including many crypto exchanges, must file with authorities when it detects potentially suspicious transaction activity.
A regulated exchange detecting an unusual pattern of transactions may be legally required to file a SAR, without informing the customer involved that it did so.
Swing Trading
A trading style that holds positions for days to weeks, aiming to capture a significant portion of a medium-term price swing.
A swing trader might hold a position for one to two weeks, aiming to capture a significant portion of a medium-term price move.
Sybil Attack
Creating many fake identities to gain disproportionate influence over a network.
An airdrop program might implement anti-Sybil measures to prevent one person claiming many times via fake accounts.
Sybil Resistance
A system's ability to prevent a single actor from gaining disproportionate influence via fake identities.
Proof of stake achieves Sybil resistance by tying influence to staked capital rather than identity count.
Sync Committee
A small, randomly selected, periodically rotating group of Ethereum validators whose signatures let light clients efficiently verify the chain without downloading and checking every block.
A mobile Ethereum wallet acting as a light client can verify recent chain state by checking the current sync committee's signatures, without downloading and verifying every historical block.
Synthetic Asset
A crypto-based token designed to track the price of another asset without directly holding it.
A synthetic asset might track a stock's price without the protocol actually holding shares of that stock.
Synthetic Dollar
A dollar-pegged asset that maintains its peg through a derivatives-based hedging strategy, such as a delta-neutral position, rather than through direct fiat or crypto collateral reserves.
A synthetic dollar might maintain its peg by holding a long spot position in an asset alongside an offsetting short perpetual swap position, rather than holding directly redeemable fiat or crypto reserves.
Systemic Risk
The risk that the failure of one participant triggers failures across a broader interconnected system, rather than staying contained to that one participant.
A widely-integrated DeFi protocol failing can propagate systemic risk directly into every other protocol that depends on it, a documented consequence of DeFi's composability.
T
Taint Analysis
A forensic technique that traces how 'tainted' funds from a known illicit source spread across subsequent transactions and addresses.
An exchange's compliance system might flag a deposit as high-risk if taint analysis traces a meaningful share of the funds back to a known hack, even several hops removed.
Take-Profit Order
An order that automatically closes a position once a specified gain-locking price is reached.
A trader might set a take-profit order at a specific target price to automatically lock in gains.
Taker Order
An order that immediately fills against existing liquidity on an order book.
A market order that fills instantly against existing orders is a taker order.
Taproot
A Bitcoin upgrade that improved transaction privacy, flexibility, and efficiency for complex spending conditions.
A Taproot transaction using a complex spending condition can look similar on-chain to a simple transfer.
Tax Haven
A jurisdiction offering notably low or no tax on certain income or gains, commonly combined with limited transparency, used by some to minimize tax liability.
Using an exchange headquartered in a low-tax jurisdiction doesn't itself change a user's own personal tax residency or reporting obligations.
Tax Residency
The jurisdiction (or jurisdictions) where a person is legally considered resident for tax purposes, which generally determines where and how their income and gains are taxed.
Someone who splits their time across multiple countries may need to carefully establish which single jurisdiction actually holds primary tax-residency claim over them.
Tax Year
The specific 12-month period a jurisdiction uses for tax reporting purposes, which doesn't always align with the calendar year.
A transaction made in March could fall into different tax years depending on whether a jurisdiction's tax year follows the calendar year or a different period, like April to March.
Tax-Loss Harvesting
Deliberately selling an asset at a loss to realize a capital loss that can offset taxable gains elsewhere.
An investor holding a position at an unrealized loss might sell it specifically to realize that loss for tax purposes, before deciding whether to re-establish the position.
Taxable Event
An action, such as selling or trading an asset, that may need to be reported and could result in owing tax.
Trading one cryptocurrency for another can be a taxable event in many jurisdictions, even without ever converting to traditional currency.
Testnet
A separate version of a blockchain used for testing, with no real value at stake.
Developers often deploy and test a new smart contract on a testnet before releasing it on mainnet.
The Merge
The September 2022 Ethereum upgrade that replaced its original proof-of-work consensus mechanism with proof-of-stake, without changing the network's execution layer or user-facing activity.
The Merge changed only Ethereum's underlying consensus mechanism, leaving account balances, smart contracts, and application behavior completely unaffected.
Thermocap
An on-chain valuation metric summing the total cumulative revenue ever paid to miners, used as a rough proxy for the network's total historical security spending.
A market-cap-to-thermocap ratio well above its historical norm has sometimes been cited by analysts as a sign that a network's valuation looks stretched relative to its cumulative historical security spending.
Three White Soldiers and Three Black Crows
Three-candlestick patterns of consecutive strong same-direction candles, signaling a decisive bullish (three white soldiers) or bearish (three black crows) shift in momentum.
Three white soldiers, three consecutive long up candles with small wicks, is generally considered a stronger bullish signal than a single bullish engulfing candle, since it reflects sustained conviction across three periods.
Threshold Signature
A signature scheme requiring a minimum number of participants to jointly produce one valid signature.
A threshold signature scheme might require 3 of 5 participants to jointly produce one valid signature.
Threshold Signature Scheme (TSS)
A cryptographic technique letting a group of parties jointly produce a single valid signature, requiring only a threshold number of them to participate, without any party holding the full private key.
An institutional custodian might use a 3-of-5 threshold signature scheme across geographically distributed servers so no single compromised machine can produce a valid signature alone.
Time Value (Options)
The portion of an option's price that reflects the possibility it becomes more profitable before expiry, beyond its current intrinsic value.
An at-the-money option (strike price equal to current spot price) has zero intrinsic value, so its entire market price is time value.
Time-Weighted Average Price (TWAP)
An order-execution strategy that splits a large order into smaller pieces executed evenly over a set time period, to approach the average price over that window.
A trader using a one-hour TWAP order to buy a large position has the exchange automatically split and execute the order in even slices across that hour rather than all at once.
Timelock
A mandatory delay between a governance proposal passing and its actual execution.
A protocol upgrade might be subject to a 48-hour timelock after a governance vote passes.
Token
A digital asset represented by rules on a blockchain, often through a smart contract.
A stablecoin is a token designed to track the value of another asset.
Token Approval
Permission you grant a smart contract to move a specific token from your wallet.
Using a decentralized exchange typically requires approving it to spend a specific token first.
Token Burn
Permanently removing tokens from circulating supply, generally by sending them to an address no one controls.
A portion of every Ethereum transaction's base fee is permanently burned under EIP-1559, continuously reducing supply as the network is used.
Token Generation Event
The point at which a project's token is first created and distributed.
A project's TGE is when its token is actually created and first distributed, not necessarily its first fundraise.
Token Sink
A mechanism that permanently or semi-permanently removes tokens from circulating supply.
A protocol might design a fee-burning mechanism specifically as a token sink.
Token Standard
A common technical specification that lets different tokens work consistently together.
ERC-20 is a widely used token standard for fungible tokens on Ethereum-compatible networks.
Token Unlock
The scheduled release of previously locked tokens into circulating supply.
A large scheduled token unlock is commonly watched as a potential source of increased sell pressure.
Token Velocity
How frequently a token changes hands within a given period.
A token used primarily for quick transactions tends to have higher velocity than one primarily held long-term.
Token-Bound Account
A smart contract account directly controlled by an NFT, letting the NFT itself own assets and interact with applications.
A gaming NFT with a token-bound account could directly hold in-game items or achievement tokens earned through gameplay, rather than tracking them separately.
Tokenized Carbon Credit
A blockchain-based token representing a verified carbon offset credit, aiming to improve transparency and prevent the double-counting of credits that has long challenged traditional carbon markets.
A tokenized carbon credit on a public blockchain lets anyone independently verify it hasn't already been sold, claimed, or retired elsewhere, addressing a known double-counting problem in traditional carbon markets.
Tokenomics
The design of a token's supply, distribution, and incentives.
A project's tokenomics might allocate portions of supply to the team, investors, and the public.
Total Supply
All coins or tokens that currently exist, including those not yet in public circulation.
A project's total supply may be higher than its circulating supply if some tokens are still locked or vesting.
Total Value Locked
The total value of crypto assets deposited into a DeFi protocol's smart contracts.
A lending protocol's TVL reflects the total value users have supplied and locked as collateral.
Trading Expectancy
The average amount a trading strategy expects to win or lose per trade, combining win rate with average win and loss size.
A strategy that wins only 30% of the time can still have positive expectancy if its average win is several times larger than its average loss.
Trading Pair
Two assets quoted against each other, showing how much of one buys the other.
A BTC/USD trading pair shows the price of Bitcoin quoted in US dollars.
Trading Volume
The total amount of an asset bought and sold over a given period of time.
A sudden spike in trading volume often accompanies major news about an asset.
Trailing Stop
A stop-loss order that automatically adjusts with favorable price movement at a fixed distance, locking in gains while still limiting downside.
A 10% trailing stop on a position that has risen 40% will trigger if the price falls 10% from its highest point reached since the stop was set, not 10% from the original entry price.
Trait Rarity
A measure of how uncommon a specific NFT's combination of visual or functional attributes is relative to the rest of its collection, often used to estimate relative value.
An NFT with several individually uncommon traits typically ranks higher in trait rarity than one with mostly common traits, even if both belong to the same collection.
Transaction Fee Market
The competitive process by which users bid, through their offered fee, for limited block space, with higher bids generally getting priority inclusion.
During a period of high network demand, a blockchain's transaction fee market can see fees spike sharply as users compete for the same limited block space.
Transaction Hash (TXID)
A unique cryptographic fingerprint identifying a specific blockchain transaction, generated by running the transaction's data through a hash function.
A user can paste a transaction hash into a block explorer to independently verify that a specific payment was successfully included in a block and check how many confirmations it has.
Transaction Malleability
A historical Bitcoin issue where a transaction's unique identifier could be altered without invalidating the transaction itself, complicating systems that tracked transactions by ID.
Transaction malleability could change a pending transaction's ID without invalidating the transaction itself, breaking systems that tracked it by that original ID.
Travel Rule
A regulatory requirement that certain transaction and identity information travel with a transfer between platforms.
A large transfer between two regulated exchanges might trigger Travel Rule information-sharing requirements.
Treasury Diversification
The strategy of converting a portion of a DAO treasury's concentrated native-token holdings into a broader mix of stable, liquid assets to reduce dependence on a single volatile token's price.
A DAO pursuing treasury diversification might gradually convert a portion of its native-token-heavy treasury into stablecoins, reducing its operational funding's exposure to that single token's price swings.
Trend Line
A straight line drawn across a series of price highs or lows on a chart, used to visualize the direction and rate of a trend and to spot potential support or resistance.
An uptrend's rising trend line connects a series of successively higher lows, serving as a moving support level that price tends to bounce off of while the trend remains intact.
Triangle Pattern
A chart pattern formed by converging trendlines as price consolidates into a narrowing range, typically preceding a breakout in one direction once the range tightens enough.
An ascending triangle, with a flat upper trendline and a rising lower trendline, is generally considered a bullish continuation pattern within an existing uptrend.
Triangular Arbitrage
An arbitrage strategy exploiting a price inconsistency across three related trading pairs, converting through all three to end up with more than started.
A triangular arbitrage trade might convert BTC to ETH, ETH to a stablecoin, and the stablecoin back to BTC, ending with slightly more BTC than started if a pricing inconsistency existed across the three pairs.
TRIN (Arms Index)
A market-breadth indicator comparing the ratio of advancing-to-declining issues against the ratio of advancing-to-declining volume.
A TRIN reading above 1 can occur even on a day with more advancing issues than declining ones, if declining volume is disproportionately heavy.
TRIX Indicator
The rate of change of a triple-smoothed exponential moving average, designed to filter out short-term price noise and minor trend fluctuations.
TRIX crossing above its zero line is commonly read as a signal that underlying momentum has turned positive.
True Range
A single period's full trading range, including any gap from the prior period's close.
If an asset gaps up overnight, its true range for that period includes the gap, even though the day's own high-to-low range might be small.
True Strength Index (TSI)
A momentum oscillator built from double-smoothed exponential moving averages of price momentum, designed to filter noise while staying responsive.
TSI's double-smoothing is specifically intended to balance noise reduction against responsiveness, rather than maximizing one at the expense of the other.
Trusted Execution Environment (TEE)
A secure, isolated area within a computer's processor that runs code and handles data in a way shielded from the rest of the system, including its own operating system.
A wallet provider might use a device's TEE to handle a user's private key operations in a way shielded even from the device's own operating system.
Trusted Setup
A one-time ceremony generating cryptographic parameters certain zero-knowledge proof systems require, where the security of the system depends on a piece of intermediate data being destroyed afterward.
A trusted setup ceremony with hundreds of independent participants remains secure as long as even just one participant genuinely destroyed their portion of the secret data afterward.
TWAP Oracle
An on-chain price feed that reports a time-weighted average price over a recent window, making it harder for a single large trade to manipulate the reported price.
A lending protocol using a 30-minute TWAP oracle is far more resistant to a single-block flash loan price manipulation attempt than one relying on an instantaneous spot price.
Tweezer Top and Bottom
A two-candlestick pattern where two consecutive candles share almost the identical high (tweezer top) or low (tweezer bottom), signaling a potential reversal at that shared price level.
A tweezer top forms when two consecutive candles reach almost exactly the same high before pulling back, suggesting resistance held firm on both attempts.
Two-Factor Authentication
A login security method requiring a password plus a second, separate verification step.
Enabling 2FA on an exchange account adds a meaningful layer of protection beyond a password alone.
Two-Way Peg
A mechanism letting an asset move between a mainchain and a sidechain or subchain, by locking it on one side (a 'peg-in') and unlocking or minting it on the other (a 'peg-out').
A user moving Bitcoin to a sidechain performs a peg-in, locking their BTC on the Bitcoin base chain in exchange for an equivalent sidechain asset.
Typosquatting
Registering a domain name deliberately similar to a legitimate one, relying on a user's typo or quick glance to land on the fake site instead.
A typosquatted domain might swap two adjacent letters in a well-known exchange's name, counting on a visitor not noticing at a glance.
U
Ulcer Index
A volatility measure focused specifically on downside risk — the depth and duration of drawdowns — rather than treating up and down moves symmetrically.
An asset that only ever moves up in large swings has a low Ulcer Index, despite having high standard-deviation volatility, since the Ulcer Index only penalizes drawdowns.
Ultimate Oscillator
A momentum oscillator that combines buying-pressure calculations across three different timeframes into one weighted reading.
The Ultimate Oscillator's multi-timeframe design is specifically intended to reduce false divergence signals that a single-timeframe oscillator like RSI can produce.
Unbonding
A waiting period required before staked assets can be fully withdrawn after unstaking.
A network might require a multi-day unbonding period before withdrawn staked assets become available.
Uncle Block
A validly mined Ethereum block that lost a brief race to be included in the canonical chain, but was still partially rewarded for contributing to network security.
Under Ethereum's former proof-of-work consensus, a miner whose valid block lost a close race to another miner's block could still receive a partial reward if it was included as an uncle.
Undercollateralized Loan
A loan where the collateral posted is worth less than the amount borrowed, the exception rather than the rule in most current DeFi lending.
A flash loan is effectively a form of undercollateralized borrowing, made safe only by its atomic same-transaction repayment guarantee rather than posted collateral.
Unincorporated Association
The default legal status a DAO without a formal entity may be treated as, often without limited liability.
A DAO with no legal wrapper may default to being treated as an unincorporated association in some jurisdictions.
Unrealized Gain
A paper profit on an asset you still hold, which hasn't been locked in yet.
An asset purchased for $100 that's now worth $150 has a $50 unrealized gain while still held.
Unstaking
Withdrawing previously staked crypto, which may involve a waiting period.
Some networks require waiting several days after requesting to unstake before funds become available.
Upgradeable Contract
A smart contract system designed so its underlying logic can be changed after deployment, typically via a proxy contract pattern.
An upgradeable contract can fix a discovered bug after deployment, something a genuinely immutable contract structurally cannot do.
User-Activated Soft Fork (UASF) and Miner-Activated Soft Fork (MASF)
Two paths for activating a soft fork: a UASF relies on node operators and users enforcing new rules directly, while an MASF relies on miners signaling majority support first.
Bitcoin's 2017 UASF movement for SegWit activation is widely credited with pressuring miners into signaling support before the UASF's own deadline, avoiding a potential chain split.
Utility NFT
An NFT whose primary value comes from functional benefits it grants the holder, such as access, membership, or in-app features, rather than purely from its artwork or collectibility.
A utility NFT granting access to a members-only community or event derives its value primarily from that functional benefit, rather than from the artwork's standalone aesthetic appeal.
Utility Token
A crypto token intended primarily to grant access to a specific product or service.
A token required to pay for a specific application's services is commonly described as a utility token.
Utilization Rate
The share of a lending pool's total deposited assets that are currently borrowed out, used to gauge liquidity pressure and set interest rates.
A lending pool with a 90% utilization rate has only 10% of its deposited assets immediately available for withdrawal, with the rest currently lent out to borrowers.
UTXO
An unspent transaction output — a discrete chunk of cryptocurrency ready to be spent.
Bitcoin uses a UTXO model, while many other networks use an account-based model instead.
UTXO Consolidation
Combining many small unspent transaction outputs into fewer, larger ones, typically to reduce the fee overhead of spending them individually later.
A service that pays out many small UTXOs to the same address over time might consolidate them during a low-fee period to reduce costs on a future large withdrawal.
V
Validator
A participant who helps confirm transactions and produce blocks in a proof-of-stake network.
Ethereum validators must stake ETH to participate in proposing and attesting to blocks.
Validator Activation Queue
A waiting line that limits how many new validators can join a Proof-of-Stake network's active validator set at the same time, to protect network stability.
A surge in new validators wanting to join at the same time can extend the activation queue, delaying how long it takes to begin earning rewards.
Validator Exit Queue
A waiting line that limits how many validators can exit a Proof-of-Stake network's active validator set at the same time, to protect network stability.
A surge in validators wanting to exit at the same time can extend the validator exit queue well beyond the network's base unbonding period.
Validator Node
A node that actively participates in a proof-of-stake blockchain's consensus process, proposing and attesting to blocks, as distinct from a node that only verifies and relays data.
A validator node earns staking rewards for actively proposing and attesting to blocks, while an ordinary full node that only verifies and relays data doesn't participate in consensus or earn these rewards.
Validator Set
The current group of participants authorized to validate blocks on a proof-of-stake network.
A network's validator set size can affect its overall decentralization and security assumptions.
Validium
A Layer 2 scaling design that uses validity proofs for execution correctness but keeps transaction data off-chain, trading some data-availability guarantees for lower cost.
StarkEx-based applications have offered a validium mode for use cases like gaming or high-frequency trading, where lower fees matter more than rollup-grade data-availability guarantees.
Valuation Multiple
A ratio comparing an asset's price or market value to some measure of its underlying economics or activity.
P/E is a valuation multiple comparing price to earnings; P/S compares price to revenue instead.
Value at Risk (VaR) and Expected Shortfall (CVaR)
Risk metrics estimating potential losses: Value at Risk estimates the maximum expected loss over a period at a given confidence level, while Expected Shortfall estimates the average loss beyond that threshold.
A portfolio with a one-day 95% VaR of $10,000 is estimated to have only a 5% chance of losing more than that amount in a single day, based on the underlying model's assumptions.
Value Averaging
An investment strategy that adjusts each periodic contribution so a portfolio's total value grows along a predetermined target path, buying more when prices fall and less (or selling) when prices rise.
A value averaging investor whose portfolio has fallen well behind its target path during a downturn would contribute a larger-than-usual amount that period to catch the portfolio back up.
Value-Added Tax (VAT)
A consumption tax applied incrementally at each stage of production or distribution, ultimately borne by the final consumer -- generally distinct from capital gains tax on crypto.
Many jurisdictions have specifically exempted crypto-to-fiat and crypto-to-crypto exchanges from VAT, treating them under capital-gains rules instead.
Vampire Attack
A strategy where a new protocol offers strong incentives specifically to drain liquidity and users away from an established competitor.
A vampire attack commonly offers a new governance token as a reward specifically for migrating liquidity from a competing, more established protocol.
Vampire Mining
A strategy in which a new or competing mining operation deliberately directs hash power at an established mining pool specifically to disrupt or undermine it, rather than purely to earn mining rewards.
A competing operation engaging in vampire mining might direct hash power toward an established pool specifically to undermine its stability, rather than to earn standard mining rewards honestly.
Vanity Address
A wallet address deliberately generated to contain a specific, chosen pattern of characters.
A vanity address might be generated to start with a recognizable, chosen sequence of characters.
Vault (DeFi)
A smart contract that pools deposited funds and automates a specific investment strategy.
A vault might automatically compound staking rewards back into the original position on a regular schedule.
Verifiable Credential
A cryptographically signed digital claim that can be independently verified.
A verifiable credential's signature can be checked independently, without contacting the original issuer.
Verifiable Random Function (VRF)
A cryptographic function that produces a random output anyone can verify was generated correctly, commonly used to fairly select a block proposer or validator.
A VRF-based validator selection process prevents a validator from knowing with much advance notice that they'll be chosen to propose the next block.
Vesting
A schedule that gradually releases tokens over time instead of all at once.
A team's tokens might vest gradually over several years rather than unlocking immediately at launch.
Veto Power
The authority held by a specific party or group to block a proposal from taking effect, even after it has otherwise passed a normal governance vote.
A protocol's founding team might retain veto power over governance proposals during an early bootstrapping period, intending to relinquish it once the community matures.
View Key
A separate cryptographic key that lets someone see a privacy-coin wallet's transaction history, without granting the ability to actually spend its funds.
Sharing a view key with an accountant lets them verify a wallet's transaction history for tax purposes, without giving them any ability to move the underlying funds.
Virtual Asset Service Provider
A regulatory classification for businesses that provide crypto-related financial services.
A centralized exchange that swaps customers' euros for bitcoin performs FATF's first activity (fiat-to-virtual-asset exchange) and is commonly classified as a VASP in jurisdictions that use this framework.
Virtual Land
A parcel of space within a blockchain-based virtual world, represented as an NFT that gives the holder verifiable ownership and development rights over that parcel.
A virtual land parcel near a metaverse platform's central, high-traffic area has historically commanded a significant price premium over parcels in less-visited areas.
Virtual Machine
The software environment that runs smart contract code consistently across a network.
The Ethereum Virtual Machine (EVM) is widely used, and several other networks have built compatibility with it.
Volatility
How much and how quickly an asset's price tends to move over a given period.
A cryptocurrency that moves 10% in a single day is considered highly volatile.
Volatility Skew
The pattern where options at different strike prices on the same asset show different levels of implied volatility, rather than a single uniform value.
Elevated implied volatility specifically on downside put options is a common skew pattern, often reflecting strong demand for crash protection.
Volume Price Trend (VPT)
A cumulative indicator similar to OBV, but weighting each period's volume by the percentage price change rather than adding or subtracting it in full.
Unlike OBV, VPT gives a larger price move more weight in its running total than a smaller one, even if both moved in the same direction.
Volume Profile
A chart overlay showing how much volume traded at each price level over a period, typically displayed as a horizontal histogram.
A Volume Profile's "point of control" is the single price level where the most trading volume occurred during the period shown.
Volume-Weighted Average Price (VWAP)
The average price of an asset over a session, weighted by the volume traded at each price level, commonly used as an execution-quality benchmark.
Institutional traders commonly use VWAP as a benchmark to evaluate whether a large order was executed at a favorable average price relative to the session.
Volume-Weighted Moving Average (VWMA)
A moving average that weights each price by the trading volume at that period, giving higher-volume periods more influence.
A VWMA gives more weight to a price move that occurred on high trading volume than to one of the same size that occurred on thin volume.
Vortex Indicator
A two-line indicator, derived from price movement relative to the prior period's true range, used to identify the start of a new trend.
VI+ crossing above VI- is commonly read as an early signal of a potential new uptrend beginning.
Vote-Escrowed Token
A governance token that must be locked for a period to gain voting power and rewards.
A longer lock period in a vote-escrowed model typically grants more voting power per token.
Vote-Escrowed Tokenomics (ve-Tokenomics)
A governance design where users lock a protocol's token for a chosen duration in exchange for voting power and rewards that scale with how long they commit to locking it.
A user locking tokens for four years under a ve-tokenomics model typically receives substantially more voting power than a user locking the same amount for just three months.
W
Wallet
A tool that stores the keys needed to access and manage your cryptocurrency.
A mobile wallet app lets a user view their balances and send transactions from their phone.
Wallet Address
A shareable identifier that others use to send you cryptocurrency.
Sharing a wallet address lets someone send you cryptocurrency without giving them any control over your funds.
Warm Wallet
A custody tier positioned between a hot wallet and cold storage, offering faster access than fully offline cold storage while carrying less online exposure than a constantly connected hot wallet.
An exchange might keep enough funds in a warm wallet to process typical daily withdrawal volume, while holding the large majority of total customer funds in deeper, more secure cold storage.
Wash Sale Rule
A general tax rule concept that can disallow a loss if a substantially similar asset is quickly repurchased.
A wash sale rule, where applicable, can disallow a tax loss from a quick sell-and-repurchase of a similar asset.
Wash Trading
Trading with yourself, directly or through coordinated parties, to fabricate the appearance of activity.
Wash trading can inflate a token or NFT collection's apparent trading volume without genuine demand behind it.
Watch-Only Wallet
A wallet that can view balances and activity for an address without holding its private key.
A watch-only wallet lets you monitor a hardware wallet's balance from your phone without exposing its private key.
Watchtower (Lightning Network)
A third-party service that monitors a Lightning Network channel for fraudulent closure attempts while the channel's owner is offline.
A Lightning user who can't stay online continuously can rely on a watchtower service to catch a fraudulent channel-closure attempt on their behalf.
Weak Subjectivity
A property of Proof-of-Stake networks where a new or returning node must trust a recent, reliable checkpoint to correctly identify the legitimate chain.
A node rejoining a Proof-of-Stake network after a long time offline generally needs a trusted recent checkpoint to correctly identify the legitimate chain.
Wealth Tax
A recurring tax on an individual's total net assets above a threshold, assessed annually regardless of whether any gain was actually realized.
A wealth tax can apply to unsold crypto holdings purely based on their year-end value, unlike capital gains tax, which only applies when an asset is actually sold.
Web3
A proposed next phase of the internet built on blockchain infrastructure, emphasizing user-owned data, identity, and assets.
A Web3 application typically uses a crypto wallet for login instead of a traditional username and password.
Wedge Pattern
A chart pattern formed by two converging trendlines both sloping in the same direction, typically interpreted as a reversal signal once price breaks against the wedge's slope.
A rising wedge, where both trendlines slope upward but converge, is generally interpreted as a bearish signal despite price technically still drifting higher within it.
Wei
The smallest denomination of Ether, with 1 ETH equal to 10^18 wei.
A gas price is commonly expressed in gwei rather than wei simply for readability, since 1 gwei equals 1 billion wei.
Weighted Moving Average (WMA)
A moving average that assigns linearly decreasing weight to older prices within its window, rather than equal or exponential weighting.
In a 10-period WMA, the most recent price is weighted 10 times as heavily as it would be in an equally-weighted 10-period SMA.
Whale
A term for an individual or entity holding a very large amount of a given asset.
A wallet holding an unusually large share of a token's total supply might be referred to as a whale.
White Hat Hack
An intervention where a security researcher exploits a vulnerability specifically to protect funds or demonstrate the risk, not to steal for personal gain.
A white hat hacker might drain a vulnerable contract's at-risk funds to a secure address specifically to protect them from a malicious exploit of the same bug.
Whitepaper
A document explaining a project's purpose, design, and technical approach.
Bitcoin's original whitepaper described its design for a peer-to-peer electronic cash system.
Williams %R
A momentum oscillator, similar to the Stochastic Oscillator, plotted on an inverted scale from -100 to 0.
A Williams %R reading near 0 means price closed very near the top of its recent trading range.
Withdrawal Credential
A field in an Ethereum validator's record specifying the address where its staked ETH and accumulated rewards can eventually be withdrawn to.
A solo staker typically sets their withdrawal credential to their own wallet address, ensuring only they can eventually withdraw their staked ETH and rewards.
Withdrawal Whitelist
A security feature restricting an account's withdrawals to a pre-approved list of addresses, blocking transfers to any address not already on that list.
An attacker who gains unauthorized access to an exchange account protected by a withdrawal whitelist still can't redirect funds to their own address without first adding it and waiting out the mandatory delay.
Withholding Tax
Tax deducted at the source of a payment -- before the recipient actually receives it -- and remitted directly to a tax authority on the recipient's behalf.
A payment subject to withholding tax arrives with the tax already deducted, rather than requiring the recipient to separately pay it afterward.
Wrapped Bitcoin (WBTC)
A token representing Bitcoin on another blockchain, typically Ethereum, backed one-to-one by actual Bitcoin held in custody, letting BTC be used within that chain's DeFi ecosystem.
A DeFi user wanting to use their Bitcoin's value as collateral on an Ethereum lending protocol might first convert it to WBTC, since Bitcoin's own chain doesn't natively support that protocol's smart contracts.
Wrapped Token
A token that represents another asset on a different blockchain, one-to-one.
A wrapped version of Bitcoin lets it be used within Ethereum-based DeFi applications.
Wyckoff Method
A technical analysis framework interpreting price and volume together to identify phases where informed, well-resourced participants appear to be accumulating or distributing a position.
A Wyckoff Method analyst examining a sideways price range alongside its volume pattern might conclude the range reflects quiet accumulation by well-resourced participants ahead of a later markup phase.
Y
Yield Aggregator
A protocol that automatically moves deposited funds across strategies to pursue the best available yield.
A yield aggregator vault might automatically move deposited funds between two lending protocols as rates change.
Yield Curve (DeFi)
A comparison of interest rates or yields available across different lending terms or durations, showing how return expectations change the longer funds are committed.
A DeFi yield curve showing meaningfully higher rates for longer fixed-rate commitments suggests the market expects variable rates to rise over that period.
Yield Farming
Actively moving crypto between DeFi protocols to try to maximize returns.
A yield farmer might move funds between several lending protocols as available rates change.
Yield Tokenization
Splitting a yield-bearing asset into a separate principal token (the right to the original deposit) and a yield token (the right to the income it generates), which can then be traded independently.
A holder of a yield-bearing deposit might sell their yield token separately to lock in a fixed, known return today, while retaining the principal token's right to redeem the original deposit at maturity.
Yield-Bearing Stablecoin
A stablecoin that automatically passes a portion of its reserve income, such as interest earned on underlying government bonds, directly to holders, rather than keeping that yield as issuer profit.
A yield-bearing stablecoin might automatically increase a holder's token balance over time to reflect their share of interest earned on the underlying government bonds backing it.
Z
Zero-Day Exploit
An attack that exploits a previously unknown vulnerability, used before the vulnerability has been publicly disclosed or patched.
A zero-day exploit against a smart contract can be especially damaging, since the contract's immutable code often can't be silently patched before funds are drained.
Zero-Knowledge Proof
A method for proving something is true without revealing the underlying information.
Some Layer 2 rollups use zero-knowledge proofs to verify bundled transactions efficiently.
Zig Zag Indicator
An indicator that filters out price moves smaller than a set threshold, connecting only significant highs and lows with straight lines.
The Zig Zag Indicator's most recent segment can change entirely as new price data arrives, a behavior called repainting.
ZK Rollup
A rollup design that submits a cryptographic validity proof with every batch of transactions, checked by the base chain before finalizing.
A ZK rollup's validity proof lets the base chain confirm an entire batch of transactions is correct without re-executing each one individually.
zk-SNARK
A type of zero-knowledge proof that is small and fast to verify.
A zero-knowledge rollup might use zk-SNARKs to prove a batch of transactions was processed correctly.
zk-STARK
A type of zero-knowledge proof that avoids a trusted setup, at the cost of larger proof sizes.
A project prioritizing avoiding any trusted setup might choose zk-STARKs over a zk-SNARK implementation that requires one.
zkEVM
A zero-knowledge rollup built to execute Ethereum-compatible smart contracts while generating validity proofs of correct execution.
A zkEVM lets a developer deploy an existing Solidity contract largely unchanged while gaining the validity-proof security model of a zero-knowledge rollup.