GlossaryBeginner
Protocol
The set of rules that defines how a blockchain or application operates.
A protocol is the set of rules that defines how a blockchain network or application behaves, including how transactions are validated, how consensus is reached, and what actions are allowed.
The term is used broadly across crypto, referring both to entire base blockchains and to individual applications, such as a specific lending or exchange protocol, built on top of one.
Examples
- Bitcoin's protocol defines its 21 million coin supply cap and proof-of-work consensus rules.
- A DeFi lending protocol is an application with its own specific rules, built on top of a base blockchain.