Concepts Glossary

Concept Glossary

Learn about crypto terminology



- IP, -GP

Improve Proposals – usually the protocols/DAOs name is added as a prefix. Ie AIP – Aave Improvement Proposal (governance proposals, etc)


A 1/1 is an NFT that has been issued as a single, unique edition. 1/1s are seen as more scarce and therefore more valuable, because only one person can own them at a time.



AAC (Advanced Audio Coding) is also a popular format, but it hasn’t reached the level of ubiquity that MP3s have. AAC files use a more advanced compression algorithm-but still lossy, like the MP3-so that at the same bitrate, it’s typical for an AAC file to sound better than an MP3.


A major evolution to ABCI, allows every step of consensus to be programmable, creating a tighter connection between the app layer & consensus layer.

ABCI is the interface that sits between an application and consensus, its main role is to execute blocks finalized by consensus. With ABCI, the app only interacted with consensus at decision time and gave it little control on what transactions to pick out of mempool. ABCI++ adds programmability to every step of consensus, allowing applications to reorder, modify, drop, delay or add transactions. This opens up the possibility for numerous improvements, some examples such as:

  • Vote Extensions: validators must agree on some data before block is produced. For example, agreeing on some off-chain price from an oracle
  • Optimistic block production: start processing blocks in parallel with prevote and precommit stages of consensus -> speeds up block times
  • Threshold encryption: encrypt transaction details sent to block proposers to prevent transaction reordering (MEV)
  • Parallel execution: process transactions in parallel instead of sequentially
Account Abstraction

Account abstraction is the concept of decoupling the relationship between the account and the signer for externally owned accounts (EOAs). It aims to make EOAs more programmable, like smart contracts, and thereby drastically improve UX.


Active Liquidity Provision

Automated managers for concentrated liquidity on AMMs such as Uniswap V3 positions

Active Users
Active users represent the total number of unique game interactions within a set time period, such as daily (DAU), weekly (WAU), or monthly (MAU). In order to calculate this, one must first know what constitutes a viewer/user. The most common way to calculate this would be to look at the number of unique visitors that have paid for/downloaded a game and proceed to make an action within the game.
Metrics such as monthly active users (MAU) or daily active users (DAU) are commonly used to assess a game’s relative success post-launch. Retention is measured by changes between these stats, and is regarded as a better metric to track player stickiness than simply looking at sales/downloads. This is because sales/downloads can, more often than not, be a representation of hype and good marketing and not the game’s ability to hook players, which can ultimately increase their lifetime value.
Adaptive streaming

A way to stream multiple resolutions of live video to accommodate viewers with varying degrees of network bandwidth or internet speed. Adaptive streaming limits timeouts or buffering on the user side, giving them a smoother live video experience.

AI Generative Art

AI generative art refers to artworks that AI-powered models have created. Examples of AI models include Stable Diffusion and Midjourney. These models are trained on millions of images and are then able to devise new content that resembles the training data but isn’t identical, based on prompts given by the user.

Airdrop Farming

What is Airdrop Farming?

Airdrop Farming refers to the set of actions users undertake to boost the number of tokens they get from a retroactive airdrop. In simple terms, it’s a way for users to try and get more tokens by working around the rules. This often involves using multiple addresses or repeating certain tasks to increase their rewards.

How Do People Farm Airdrops?

The primary method of airdrop farming involves distributing one’s crypto assets across multiple digital addresses. By doing so, instead of interacting with a crypto service from a single address, users interact multiple times from various addresses. Each interaction from a distinct address can potentially qualify for its own set of airdrop rewards, multiplying the total tokens received. However, this tactic, while smart in approach, is often seen as exploiting the system and is not always viewed favorably by the broader crypto community.

What Are the Implications?

While some praise the ingenuity behind airdrop farming, it’s often criticized for distorting the organic distribution of tokens, potentially disadvantaging genuine users. This strategy bears similarities to Sybil Attacks in cybersecurity. As a result, many crypto teams are now employing advanced detection mechanisms to ensure fairness and maintain their project’s integrity against such farming techniques. As the world of cryptocurrency continues to evolve, so does the dialogue around the ethics and impact of airdrop farming.


In the context of social media, an algorithm is how a social platform determines which content to display at any given time to a particular user. They use data based on a user’s social relationships and interactions to determine which content that user will find most appealing.

Algorithmic Market Operations (AMOs)

Algorithmic Market Operations (AMOs) automatically control the supply of algorithmic stablecoins while improving scalability, decentralization, and transparency.

Anchored VWAP

Anchored VWAP displays the volume-weighted average price for a specific time period, starting from a user-selected point. In other words, Anchored VWAP shows the price of an asset adjusted for its volume starting from any point chosen on the chart.

Annual Percentage Rate

Annual Percentage Rate (APR) is the yearly rate of interest that an individual must pay on a loan, or that they receive on a deposit, or yields that are rewarded for staking.


Unlike general purpose chains, app-chains (or application-specific blockchains) are specialized around certain use cases. Specialization generally results in more reliable fees, higher performance, custom-tailored user/developer experience, and higher value capture for the app token.

Appchains are said to be self-sovereign because the governance of the consensus layer and the application layer are tightly coupled. As such, app-chains can recover from implementation bugs on the app-layer by hard forking the underlying chain. Self-sovereignty also protects apps from platform risks.

On the other hand, appchains impose a higher need for social coordination. Deploying new dapps on an app-chain or establishing secure cross-chain bridges between app-chains typically requires involvement from the respective communities. Cross-chain composability is also significantly more complex than composability between smart contracts on a general purpose chain.

Approval Voting

An electoral system that allows people to choose any number of candidates and elects the candidate with the most support


Annual Percentage Yield, which is the yield/interest after a year, which includes compounding interest. Note that this is different from Annual Percentage Rate (APR), which does not take into account compounding effects.


Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset’s listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets or in different forms.

Aspect ratio

The aspect ratio describes the proportional relationship between the video output’s pixel width and height. For example, the resolution 1920×1080 is wider than it is tall. The ratio of its width to height is 16 to 9, which has an aspect ratio that is 16:9. Standard definition television has an aspect ratio of 4:3.

Asset Curation

From collected artwork to collateral for lending, all DAO assets benefit from goals and processes around curation.

Atomic Swap

Atomic Swap allows two parties to atomically swap tokens without trusted third parties. Atomic swaps suffer from the free-option problem where one party gets an unfair advantage by retaining the option to take or leave the price offer committed by the counterparty for some known period of time.

Atomic Swaps

In an atomic swap, the entire sequence of trades must go through otherwise the swap is not executed at all.

Audio codec

An audio codec is essentially a device or an algorithm capable of encoding and decoding a digital stream of audio. Common audio codecs include: AAC, MP3, and PCM. The audio codec selected determines the quality and amount of compression applied to the original signal during the conversion to digital.

AV sync

Audio to video synchronization is a measure of how well the sound is synchronized with it’s source on video. One of the most common and obvious examples of an AV sync problem are lip synch issues, where the words heard don’t match the speaker’s moving lips.

Available-for-Sale (AFS)

Available-for-sale (AFS) securities are investments that a company or an investor holds with the intention of selling them in the future, and not necessarily waiting until maturity. These securities are recorded on the balance sheet at their fair value, which is the current market price at the end of the reporting period — aka these assets are marked-to-market.

Unlike held-to-maturity securities (HTM), the value of available-for-sale securities is subject to daily market fluctuations and is revalued at the end of each reporting period to reflect the current market price. Any changes in the fair value of these securities are recorded as unrealized gains or losses on the balance sheet, which can impact the company’s net income and shareholders’ equity.

Examples of available-for-sale securities include stocks, bonds, and other debt securities.


An avatar is a visual representation of a person for use in digital contexts. It’s usually a computer-generated image, such as a bitmoji. On social media, the term ‘avatar’ also refers to your profile picture-the image that represents you on the platform. Most individual users choose a photo as their social media avatar, sometimes supplemented by a digital frame or filter. For brands, the company logo is usually the best avatar choice.


Avalanche VMs (AVMs) make it easy to define a blockchain-based decentralized application. Rather than new, limited languages like Solidity, developers can write VMs in Go (other languages will be supported in the future).



Supplemental video footage that can be edited into a video for the purpose of providing extra details, act as a filler, aid in transitions, or add visual interest to the subject.


Where a bot detects that a target transaction will cause a large mispricing of an asset and immediately clears the arbitrage opportunity to bring the prices back to normal after.

Bad Debt

Bad debt refers to loans or outstanding balances owed that are no longer deemed recoverable and must be written off by the protocol.


The maximum amount of data that a network can send over an Ethernet connection specified in Mbps or kbps is the maximum bandwidth of that link.

Bank Capitalization

“Bank capitalization” refers to the amount of money that a bank has available to cover its financial obligations and absorb losses. This includes funds contributed by shareholders and retained earnings. A well-capitalized bank is considered to be financially stable and able to withstand economic downturns.

Bank Term Funding Program (BTFP)

The Bank Term Funding Program (BTFP) is a program introduced by the Federal Reserve Board to provide liquidity to U.S. depository institutions. It offers loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.

These assets are valued at par, meaning they are not discounted by the market prices. The BTFP was created to support American businesses and households and to ensure the ongoing provision of money and credit to the economy amid the 2023 Bank Run.

Batch Swaps

Batch swaps are a decentralized exchange feature that aggregates multiple trades across asset pairs and settles them all simultaneously. Batch swaps are utilized by exchanges such as Balancer and Penumbra and can beneficial for providing improved pricing and trade privacy.

Beacon Chain

The beacon chain stores and manages the registry of validators, and will implement the Proof of Stake consensus mechanism for Ethereum 2.0. The original Ethereum 1.0 PoW chain will continue to run alongside the new Ethereum PoS chain, ensuring that there is no break in data continuity.

Bid/Ask Sum

The bid/ask sum is a measure of the total number of coins/tokens on both the bid and ask sides of the order book – within a specified range.

Binary Options

An option that either pays a fixed monetary amount or nothing at all.

Bitcoin Halving

A Bitcoin halving event is when the block reward (distributed to miners) is cut in half. This in turn reduces the inflation rate for BTC and is the driver behind BTC’s deflationary issuance. The initial block reward for BTC was set to 50 BTC, which has since been reduced to 6.25 BTC over the past three previous halving events. The next BTC halving event will take place at block # 840,000, which is estimated to take place in April/May of 2024.



Bitrate refers to the speed at which data is transferred from one location to another; it is measured in kilobits per second (kbps). Audio files are compressed to many different bitrates. Two of the more common ones are 192 kbps and 256 kbps. An MP3 that is compressed at a higher bitrate will usually sound more clear and have a bigger range of sound than one compressed at a lower bitrate.

Block Header

Meta-data for the block, which consists of some basic information about the block, including the Merkle root of transactions.

Block Lattice

Block lattice is the Directed Acyclic Graph (DAG)-based data structure and consensus mechanism that the Nano protocol makes use of. Nano’s block lattice structure allows individual accounts on the Nano protocol to control their own blockchain and for blocks to be added very quickly to help enable extremely fast, feeless network confirmations.

Block Reward

The payment awarded to a blockchain miner upon successfully validating a new block

Block Time

Block time refers to the time it takes to mine/validate a new block (ie. make progress). It can be thought as the hearbeat of the blockchain.


Created by the team behind Arweave, the blockweave is a blockchain-like data structure. Each block in a blockchain is linked to the block that preceded it. In a blockweave, each block is linked to both the block that preceded it and a recall block – a block from the earlier history of the blockweave.

Book Value

Book value is the value of an asset or a company’s equity that is recorded in its financial statements based on accounting principles.

Banks use book value to assess the value of their assets and liabilities and to calculate key financial ratios such as the capital adequacy ratio, return on equity, and price-to-book ratio. Book value provides a standardized method for recording and reporting the value of assets and liabilities, which is essential for regulatory compliance and financial reporting.

Borrowing Capacity

Refers to the total value that a borrower is allowed to request from a lending pool, given its collateral amount


DAOs use bounties to allow folks to know how to plug in and contribute in a decentralized way.


Connects two blockchain ecosystems, facilitates communication between blockchains through the transfer of information and assets.

Buy Now Pay Later

Buy Now Pay Later (BNPL) is a concept where buyers can purchase an NFT by paying in installments over a period of time. Users make regular payments plus interest fees. After all the payments are completed, the NFT will be transferred to the user. This is a modified form of peer-to-peer lending, with the protocol taking on the role of the lender and associated price risks with the NFT. Cyan and ApeNow are two startups with live BNPL products.

Byzantine Fault Tolerance

BFT stands for Byzantine Fault-Tolerance. Byzantine faults within distributed systems are some of the most difficult to deal with. A Byzantine Fault-Tolerant consensus algorithm guarantees safety for up to a third of Byzantine, or malicious, actors.


Call Option

An option to buy assets at an agreed price on or before a particular date.

Cash-Secured Puts

Cash-secured puts are a strategy that sells puts against stablecoin collateral, and earns premiums from put buyers. The stablecoin collateral can be used to fulfill option exercise obligations in the case of physically-settled options.This strategy performs best in a bullish or neutral market where puts sold stay out-of-the-money.


Citizens Broadband Radio Service, or CBRS for short, refers to 150 MHz of spectrum in the 3550 MHz to 3700 MHz range (3.5 GHz to 3.7 GHz) that the United States Federal Communications Commission (FCC) has designated for public use.


CC0 enables scientists, educators, artists and other creators and owners of copyright- or database-protected content to waive those interests in their works and thereby place them as completely as possible in the public domain, so that others may freely build upon, enhance and reuse the works for any purposes without restriction under copyright or database law.


A Content Delivery Network (CDN) is a system of networked data servers that can store copies of original content (such as video) so that users can access the copy that’s closest to them on-demand, which makes it a fast delivery system.

Cellular bonding

Bonding (or cellular bonding) is when you associate different networks together that have Internet connectivity to create a redundant ‘back up’ connection for your stream in case the primary link fails during the live broadcast. For example, a wired Ethernet connection and a cellular network.


Channels are one of the earliest blockchain scaling proposals. Originally taking the form of payment channels, they can be extended to arbitrary computation with state channels. A fixed set of participants open a channel with an on-chain transaction that defines the rules of the channel. Updates to the channel state are made by unanimous consent: all participants signing a state update, communicated off-chain. Any participant may attempt to close the channel on a particular state, which starts a timeout during which anyone may submit a later state to penalize a fraudulent channel close attempt. If no later state has been shown by the timeout, the channel closes, settling balances based on the closing state.

Chicken Bonds

Chicken Bonds are a novel liquidity bonding mechanism that allows protocols to bootstrap liquidity at a minimal cost while providing better user protection than existing bonding alternatives. The bonding mechanism can be applied to yield-bearing tokens and has been first applied to Liquity’s LUSD. 

Citizens' House

The Citizens’ House is a large-scale experiment in non-plutocratic governance and retroactive funding of public goods of Optimism. Citizenship will be conferred by “soulbound” non-transferrable NFTs, and the set of Citizens will grow over time. The exact mechanism for distributing Citizenships will be determined by the Foundation with input from the Token House.

Client-Server Network

The client server paradigm is the main networking approach to the modern internet. In this model, the internet is dominated by clients and servers. A client is a computing device (software or hardware) that accesses a service provided by a server. The server meanwhile provides services to client devices. This system is generally centralized with servers localized in massive server farms. The centralization of the servers creates ample opportunity for surveillance and data mining of the connected clients.

Close Factor

The maximum proportion of the debt that is allowed to be repaid in a single liquidation.

Collateralization Ratio

Is the ratio between the total value of collateral and debt (cf. Equation 2) where 𝑖 represents the index of collateral or debt if the borrower owns collateral or owes debt in multiple cryptocurrencies.

Collective Asset Management

DAO treasuries and balance sheets that should function like decentralized corporations with considerations of assets and liabilities, liquidity, income, and where to allocate financial resources.

Collector DAO

DAO subsets are emerging with different cultures, incentive models, and governance structures – DAOs with token distribution models that (unlike DeFi DAOs) aren’t tied to usage or participation. Collector DAOs are made up of people who make decisions to collectively purchase art or other digital items.


A compiler is a special class of software that translates a programming language to another programming language. These are required by modern system as they are built in dozens of different languages that need to talk to one another.

Composable Assets

In software development, composability is the ability to combine existing applications or their specific codes/components to build new products. Composable assets, then, are tokens that can be utilized outside of their initial environment for a new purpose or utility.

Concentrated Liquidity

Uniswap v3 introduced range-bound concentrated liquidity. This DEX design allows LPs to decide the limits between which they would like to provide liquidity. In a conventional Uniswap v2 pool, your liquidity is distributed across the entire price curve between 0 and infinity. On Uniswap v3 you can choose to provide your liquidity between a defined range, say for ETH $1400-1900 – where most demand lies. These two values are your LP position’s floor and ceiling respectively.


The curve for concentrated liquidity positions is essentially still an X*Y=K curve, but the action of choosing a floor and ceiling for your liquidity provision makes this a lot more capital efficient. With concentrated liquidity, you’re compressing the X*Y=K price curve between a pre-determined floor and ceiling. The upside of this is that all your capital is being put to good use if the price is within your range. The downside is that impermanent loss is magnified. A recent study showed the majority of Uniswap v3 liquidity providers lost more than they gained.

Concentrated Liquidity Managers

The launch of Uniswap v3’s range-defined liquidity provision also opened a door to a new category of DEX service providers.  Uniswap v3 liquidity providers were often finding the price of assets moving out of their defined range for liquidity provision. As a result, LPs have to manually re-deploy liquidity and closely monitor their positions. This entails amplified impermanent loss (which is realized) and thus less profitability. 


Automated liquidity managers optimize liquidity deployment around current price ranges, re-invest fees, and group transactions to reduce gas costs.  The graph below shows a concentrated liquidity manager deploying liquidity ranges corresponding to price changes of ETH.

Confidence Interval

A confidence interval is the mean of your estimate plus and minus the variation in that estimate. This is the range of values you expect your estimate to fall between if you redo your test, within a certain level of confidence.

Confidence, in statistics, is another way to describe probability. For example, if you construct a confidence interval with a 95% confidence level, you are confident that 95 out of 100 times the estimate will fall between the upper and lower values specified by the confidence interval.

Pyth Network uses Confidence Intervals for their Oracle. Publishers submit their best price and range where they believe that price lies. For example, BTC $40,000 +/- $5. For assets that trade on various venues with different participants, information, deposit/withdrawal limits, liquidity profiles, etc. there is no such thing as a “true” price. Using confidence intervals over a single price can reflect a more realistic state of the market and current liquidity conditions, particularly in times of high volatility.

Consensus Democracy

A decision-making structure that involves and takes into account as broad a range of opinions as possible.

Consensus Mechanism

A consensus mechanism is an algorithm that participants in a blockchain network use to reach an agreement on the state of the blockchain ledger, including the order of transactions. Popular consensus algorithms include Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS).

Consensus Mechanism/Consensus Protocols/Consensus Algorithms

Blockchains are, in essence, distributed databases, where the network’s nodes must reach an agreement on the network’s current state. This agreement is achieved using consensus mechanisms.

Constant Mean Automated Market Maker (CMAMM)

A constant mean AMM keeps the weighted geometric mean of each asset in the pool remains constant. In a pool with three assets, the formula will be (x*y*z)^(⅓)=k.  


Popularized by Balancer, the constant mean pricing equation enables a much higher degree of flexibility.  Because of this, Balancer can support up to 8 different assets in a single pool versus 2 assets per pool such as in Uniswap.


As previously mentioned, one can consider a Uniswap pool a 50:50 portfolio of two assets that constantly rebalance to make sure the USD value of each side is equal. Constant mean AMMs take this up a few notches by introducing up to 8 assets and the ability to target different weights for each asset. This auto-rebalancing feature mimics the functionality of an index product.


Despite the improved flexibility, this primitive lacks traction. Part of the reasoning for this is the high amount of gas required associated with this model. If you’re sourcing liquidity from the same Balancer pool, gas isn’t too much higher than Uniswap v2. But, for larger trades where the optimal route is to go through 2 or more pools, gas consumption is much higher, which eats into a swap’s profitability. Balancer v2 on Polygon, where gas fees are much lower, mitigates some of these concerns.

Constant Product Automated Market Maker (CPAMM)

A CFAMM is a traditional AMM model popularized by Uniswap. The protocol was first inspired by a Reddit post written by Vitalik. 

The price curve for these AMMs abides by the x*y=k equation, where X and Y are the quantities of assets 1 and 2, and K is a constant. 

  • Users have to deposit equal dollar amounts of each asset into a pool. 
  • The nature of this bonding curve ensures that an LPs exposure is always 50:50 in either asset. 
  • When the dollar value of asset X increases relative to Y, a portion of asset X will have to be sold for Y to maintain the pool balance of 50:50. This is balanced by arbitrageurs.

For an in-depth example of how a pricing curve works check this tool out.

Since constant product AMMs determine asset prices on their own, they rely on arbitrageurs for efficiency. The downside of this is that these AMMs are not very efficient. In a constant product AMM, two assets are always bonded to each other, with their corresponding dollar values always equally split 50/50. In the real world, asset liquidity doesn’t work this way; it is much more flexible.

The x*y=k price curve effectively guarantees liquidity at any price from just above 0 to infinity. This isn’t ideal, because liquidity provision at the long tails of the price distribution curve will see little to no utilization.


Constant Sum Automated Market Maker (CSAMM)

The Constant Sum Automated Market Maker uses the formula x+y=k. This model is hardly ever used because it allows the possibility for either X or Y to be reduced to zero, potentially draining the entire pool and leaving a single asset. We mention this concept here to provide comprehensive base coverage of AMM models and help explain advanced concepts in the future.

Continuous Approval Voting

Continuous Approval Voting means that competing proposals may be introduced any time.

Continuous Liquidity Pools (CLP)

A derivative of the XYK constant product model, Continuous Liquidity Pools (CLP) is a primitive pioneered by THORChain. In terms of the core mechanics, THORChain’s CLPs are identical to Uniswap v1/v2. But CLPs introduce a much more friendly fee model for LPs. Instead of a fixed fee like Uniswap v1/v2, CLPs use slip-based fees which increase and decrease per a trade’s slippage. 


Slip-based fees allow LPs to earn according to demand for their liquidity. When slippage for a given trade is low, it means the compositions of an LPs holding remain stable. High slippage trades meaningfully move an LPs asset composition and increase impermanent loss. By incorporating slippage into the fee model, CLPs offer LPs have much better impermanent loss protection. LPs in low liquidity pools with high trading demand will be able to make a greater yield on fees, which in turn incentivizes more liquidity to the pool.


Fundamentally, the fee model is the only difference between a traditional constant product AMM and CLP-based AMMs. But this change breeds several other benefits. For a deeper understanding of this model and its implications read our reports on Thorchain. 

Contract Account (Smart Contract)

A contract account (smart contract) is an Ethereum or other EVM network account that is controlled by code instead of a private key. Unlike externally owned accounts (EOAs), there is no private key for a contract account and they cannot initiate transactions. Instead, contract accounts can only send transactions in response to receiving a transaction, and in accordance with the logic of the smart contract code.


PrimeDAO – A contributor is an active role, where you’re part of the DAO’s builder collective, creating value through labor.

Conviction Voting

High level: Conviction voting is a voting mechanism in which people stake their voting power on proposals, and over time, those proposals accumulate enough votes to pass.

Core PCE

Core PCE stands for Core Personal Consumption Expenditures, which is a variant of the Personal Consumption Expenditures (PCE) index that excludes the volatile food and energy prices.

The core PCE index is considered a more stable and reliable measure of inflation because it removes the effects of short-term price changes in food and energy that can be influenced by factors such as weather or geopolitical events.

Correlation Coefficient

The correlation coefficient is a statistical measure that showcases the relationship between the relative movement of two different variables. Correlation values range between -1.0 and 1.0, with negative values detailing an inverse relationship. Correlation statistics are often used in finance and investing to demonstrate relative strength between two assets or variables.

Cosmos SDK

The Cosmos SDK is a modular framework that simplifies the process of building secure blockchain applications.

Counter-party risk

Counter-party risk assesses qualitatively how and by who the currency is governed.

Counterparty Discovery

Counterparty discovery is the task of finding another party to trade with.

Apps like AMMs or on-chain order books perform both counterparty discovery and settlement on the blockchain; when a trader executes a swap transaction on-chain, the counterparty happens to be the liquidity provider of the liquidity pool.

However, it’s also possible to decouple counterparty discovery and settlement. To reduce transaction costs, some applications perform counterparty discovery off-chain and only use a blockchain as a settlement layer. Performing counterparty discovery off-chain may have benefits such as better UX, scalability, privacy, etc.


Coverage refers to the amount of risk that a user/protocol is insured for.

Covered Calls

A covered call is a two-part strategy: a long on a spot asset (e.g. holding ETH) and selling call options (e.g. writing an ETH call) of the same asset to earn premiums from option buyers. Covered calls are partially hedged when the calls go in-the-money, as the long spot position continues benefiting from higher prices while the short call position loses more value as prices go up. This strategy performs best in a bearish or neutral market as the calls sold stay out-of-the-money.

CoW (coincidence of wants)

The CPI stands for Consumer Price Index. It is a measure of the average change in the prices of a basket of goods and services that are typically consumed by households.

The CPI is a widely used measure of inflation, and it is used to track changes in the cost of living. It is based on surveys of households and businesses, and it covers a broad range of goods and services, including food, housing, transportation, healthcare, and education.

Credit Delegation

Credit Delegation is a feature which allows a Credit Delegator to delegate the credit of their account’s position to a Borrower.

Cross Margin

Margin is your entire account balance for the chosen currency. In the case that you are using Cross Margin, your open positions will use your available balance to fund any losses to keep a position open. Opposed to only using USD to margin positions.

Cumulative Volume Delta (CVD)

Cumulative Volume Delta (CVD) shows the cumulative volume change based on the trade volume of buy aggressors vs. sell aggressors. It goes up when an offer is lifted, and conversely, goes down when a bid is filled.


Curation, in its most simple form of explanation, is a purely selective process. Curators select collections of works of art or art projects and group them into an idea or theme.


Daily Auction

The Daily Auction economic model is an NFT distribution model where the NFT supply starts from a tiny base and expands at a predictable rate. In a typical PFP distribution model (e.g. Bored Apes), all 10,000 NFTs are released into the market at once, at the same price, during the mint. Oftentimes, this results in a large gap between the NFT supply and actual brand value while the team executes on their community, marketing, and product roadmaps. The Daily Auction model aligns token inflation more closely with the growth of the brand over time and reduces the supply-brand value gap. It also allows for a more equitable method of on-chain NFT distribution as it offers everyone the same opportunity to enter the ecosystem at any time, with no allowlists or gas wars.

Daily Unique Wallets (DUW)

A gaming metric for displaying the daily unique wallets interacting with a dApp.


Danksharding is the main proposal to scale Ethereum’s data availability layer. This form of data sharding would only require validators to sample portions of the data in a given block. In aggregate, they can provide assurances that the entire data set was available. Danksharding would massively increase Ethereum’s data availability bandwidth, providing far higher scale to Ethereum rollups.


Wikipedia – an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government.

Data Access Layer

A data access layer (DAL) is generally considered the main component of the back-end of a computer system or network. It is a layer within a computer program that allows programs to access data and persistent storage. DALs allow running programs to access data anytime it is needed to operate correctly. Applications that make use of DALs leverage a database server, or can operate without one. DALs support several database formats, but must be able to communicate with different data requests within a system.

Data Anchoring

On the Klaytn blockchain platform, the process of data anchoring connects data from the auxiliary service chain to the mainchain. Data anchoring periodically stores block hashes from the faster, more customizable service chain onto the more secure mainchain. The technique is meant to increase the security of service chains, which can be less secure than the mainchain due to their smaller number of nodes.

Data Availability

Data availability answers the question, has this data been published? Specifically, a node will verify data availability when it receives a new block that is getting added to the chain. The node will attempt to download all the transaction data for the new block to verify availability. If the node can download all the transaction data, then it successfully verified data availability, proving that the block data was actually published to the network.

Data availability is critical to the security of any blockchain because it ensures that anyone can inspect the ledger of transactions and verify it. Data availability becomes particularly problematic when scaling blockchains. As the blocks get bigger, it becomes impractical for normal users to download all the data, and therefore users can no longer verify the chain.

Data Availability Proofs

Data availability proofs are a new technology that allows clients to check with very high probability that all the data for a block has been published, by only downloading a very small piece of that block.

Data Credit

Data Credits are used to purchase a specific amount of data for use within a wireless network. The exact amount of data per credit varies between networks.

Data Verification Mechanism

The Data Verification Mechanism (DVM) is the oracle process used to resolve disputes on the UMA protocol. When there is a price dispute between two parties over a synthetic token derivative contract, the DVM requests UMA token holders vote on the correct price. The DVM then relays the correct price to the requestor and rewards UMA token holders for their vote.


Currency debasement refers to the reduction in the value of a currency.

This can be achieved through various means, such as increasing the money supply, lowering interest rates, or implementing policies that encourage inflation. When the supply of money increases, the purchasing power of each unit of currency decreases, leading to inflation.

Debasement was traditionally associated with mixing inferior metals into currencies made up of precious metals, such as gold and silver, thus lowering (debasing) their value. Today, debasement occurs when a government prints money (increases the money supply) without a corresponding increase in output.

Debt Monetization

Debt monetization is a process by which a government, central bank, or other financial institution purchases government debt, such as treasury bonds or bills, using newly created money or by creating new money through a process called quantitative easing (QE).

The purpose of debt monetization is typically to finance government spending, such as social programs or infrastructure projects, without increasing taxes or issuing additional debt. By purchasing government debt with newly created money, the government or central bank effectively creates additional liquidity in the financial system, which can stimulate economic growth and increase employment.

However, debt monetization can also have negative consequences, such as inflation, currency devaluation, and a loss of confidence in the government’s ability to manage its finances. If the government or central bank creates too much money, it can lead to an oversupply of currency, which can cause prices to rise and reduce the purchasing power of the currency.

Decentralization Ratio

The Frax Decentralization Ratio (DR) is the ratio of decentralized collateral value over the total stablecoin supply backed/redeemable for those assets. Collateral with excessive off-chain risk (custodial stablecoins, RWAs) are counted as 0% decentralized.

The DR goes through underlying constituent pieces of collateral that a protocol has claims on, not just what is inside its system contracts. The DR is a recursive function to find the base value of every asset.

Decentralized Autonomous Corporations

Decentralized autonomous corporations/companies are a smaller topic, because they are basically a subclass of DAOs, but they are worth mentioning. Since the main exponent of DAC as terminology is Daniel Larimer, we will borrow as a definition the point that he himself consistently promotes: a DAC pays dividends. That is, there is a concept of shares in a DAC which are purchaseable and tradeable in some fashion, and those shares potentially entitle their holders to continual receipts based on the DAC’s success

Decentralized Identity

Decentralized identity allows individuals to manage their identity-related information. With decentralized identity solutions, you can create identifiers and claim and hold your attestations without relying on central authorities, like service providers or governments. Decentralized identifiers are issued, held, and controlled by individuals.

Decentralized identifiers are stored on distributed ledgers (blockchains) or peer-to-peer networks. This makes DIDs globally unique, resolvable with high availability, and cryptographically verifiable. A decentralized identifier can be associated with different entities, including people, organizations, or government institutions.

There are two fundamental premises in decentralized identity that make it different from our Web2 digital identities:

  1. The user owns their identity instead of the organization

  2. The identity is portable and interoperable, able to be used wherever and whenever the user wants

Decentralized Options Vaults

Investors simply ‘stake’ their assets into vaults which deploy the assets into options strategies.

Delegated Voting

Delegated voting allows token holders to transfer their voting rights to others so that those delegates may more actively participate in governance.


A delegator is a type of node that is often employed by Proof-of-Stake (PoS) blockchain networks. Delegators have a diverse range of purposes depending on the specific blockchain protocol they operate on, but they are generally used to help full nodes or validator nodes, which are the primary nodes responsible for carrying out network consensus. Those who wish to participate in consensus, but don’t wish to operate a full node, may become a delegator node and stake their tokens with a public validator node – through a process called delegation – to share in a portion of block rewards.


Delta (Δ) refers to the sensitivity of an option price to a change in the price of the underlying asset. Delta is a measurement of the percentage change in the price of a derivative contract for a 1% change in the price of the underlying asset. At-the-money options have a delta of 0.5. A spot position – as well as perps and futures – have deltas of 1, and are often called delta-1 products.

Demand Zone

A Demand zone is a price area below the current price where there is strong buying interest. The zones are the periods of sideways price action that come before explosive price moves. When the price returns to this level, there is typically a reaction of latent buy orders getting filled and price moves up


A depeg is when an asset moves lower or higher than its tracking counterpart. For example, currency A is pegged to currency B at a 1:1 ratio. When Currency A goes above or below the 1:1 ratio for an extended period of time, it is considered a depeg.

Development Fund

The protocol Foundation’s multi-signature wallet used to hold assets sold for operational expenses.

DEX Aggregator

As the number of available DEXs multiplied exponentially , a new market for DEX aggregation came to life. Traders are able to define the trading pair and trade size and the aggregator identifies the most cost-efficient DEX to execute the trade. In some cases, the most efficient routing splits the trade across multiple venues. Aggregators increase the overall efficiency of the market by minimizing price impact and slippage.


As of writing DEX aggregators capture 25-35% market share of total volume traded on decentralized platforms. With the composable nature of DeFi, we are beginning to see more and more protocols integrate DEX APIs as part of applications with wider functionality such as wallets.

DEX Capital Efficiency

One cause of capital inefficiency is liquidity fragmentation between different pools, trading venues, and platforms. In a traditional AMM, each liquidity pool can only serve one market, ETH/USDC for example. For a trade to occur between Token A and Token B, a dedicated pool must exist between this specific token pair or they must each share a common pool with Token C. Each of these pools requires adequate liquidity provision and as a result, the total liquid assets of each token will be split between all required pools. This effect is further exacerbated by liquidity segmentation across Layer 1 blockchains and Layer 2 scaling solutions.

Digital Collectibles

Digital collectibles are unique digital items that you can share, create, buy, and sell. All of these are stored on the blockchain, enabling them to have verifiable Proof-of-Ownership and Proof-of-Authenticity.

Digital collectible is a newer term that has been coined to replace certain categories of “NFTs”. It is more intuitive that “NFT” or “PFP”, especially for mainstream audiences. The term has gained traction in 2022 with the launch of Reddit’s collectible avatars.


Digital Garments

Digital garments are digital fashion items that can be worn on one’s avatar.

Digital garments unlock an entirely new creative world — they do not need to obey the laws of physics and are only limited by the artist’s imagination. The supply and demand dynamics are magnified in the digital fashion space: garments can be changed with a few clicks depending on your mood, and physical storage space is no longer a consideration.

Directed Acyclic Graph (DAG)

A directed acyclic graph (DAG) is a form of Distributed Ledger Technology (DLT). In contrast to a blockchain, which groups transactions into blocks and orders them in a linear fashion, a DAG is a network of individual transactions themselves connected only to other transactions without blocks. While blockchains require block validation, in a DAG, individual transactions provide validation for one another. All network users in a DAG are simultaneously miners and validators, and therefore transaction fees tend to be much lower than those common to blockchain networks.

Directional Trade

A directional trade is an investment strategy that involves taking a position in a financial asset with the expectation that its price will move in a particular direction. The goal of a directional trade is to profit from the anticipated price movement of the asset.

A directional position is the opposite of market neutral.

In a directional trade, the investor takes a long position if they expect the asset’s price to rise, or a short position if they expect the price to fall. For example, if an investor believes that the price of a particular stock will increase in the near future, they may buy shares of the stock in order to profit from the anticipated price increase.

Discount Window

The discount window is a lending facility that allows eligible depository institutions to borrow short-term funds from the Federal Reserve at a discount rate. Banks borrow from the discount window when they need to meet short-term liquidity needs, such as unexpected deposit outflows or when they are unable to obtain funding from other sources.

The discount rate is typically higher than the federal funds rate, which is the interest rate that banks charge each other for overnight loans. Borrowing from the discount window can be seen as a last resort for banks, as it may signal that they are experiencing financial difficulties.

The discount window is distinct from the reverse repo program, which is a tool used by the Fed to absorb excess cash from the financial system. In a reverse repo transaction, the Federal Reserve sells securities from its portfolio to a counterparty, typically a bank or other financial institution, in exchange for cash. The reverse repo rate is the interest rate paid by the Federal Reserve to the counterparty for the use of the cash. Reverse repo transactions are typically used to manage short-term interest rates and to prevent the federal funds rate from falling too low.

Distributed Validator Technology (DVT)

Distributed Validator Technology (DVT) refers to an Ethereum proof-of-stake validator that operates across multiple nodes or machines. This effectively mitigates some of the vulnerabilities inherent in single-point validation. In a scenario where less than 33% of the nodes participating in a distributed validator cluster become offline, the active nodes that remain can still achieve consensus on what to sign and generate valid signatures for their staking responsibilities. This is a widely adopted approach for reducing downtime in systems.


A distributor is the entity that takes music from an artist or a record label and makes it available in a store or streaming service. They also help ensure that royalties-the money the artist or other rights holders are entitled to for use of the work-are paid out to the correct parties.

Domain Naming System (DNS)

The Domain Name System is an internet protocol which attaches human friendly domain names to IP addresses. DNS is served to computers through name servers which publish domain registry information.

Double spend

A critical risk with digital currencies where the same funds can be copied and spent more than once.


Doxing is the (very frowned-upon) practice of searching for and publishing the personal information of a private individual. Doxers use these attacks as a means to threaten or intimidate their targets.


Delegated Proof Of Stake based blockchain is where anyone can delegate their coins to a validator to participate in securing the network and staking yields. This allows a broader set of token holders to participate in securing the chain without needing the technical expertise of a running a validator themselves.


Dust is a trace amount of cryptocurrency left over after a trade or transaction. It has small or negligible monetary value (from a fraction of pennies to a few dollars) and is usually not enough to cover the cost of a transaction, meaning that what remains is “trapped”.

Dutch Auction

In a Dutch Auction, the price of an NFT starts at an initial price (ceiling) and drops by a fixed amount periodically (e.g. 0.1 ETH every 10 minutes) until it hits the lowest price it will go (the resting price). This means minting begins with a high asking price that decreases over time until the project hits its resting price or is sold out.

Dutch Auctions

Dutch Auctions are a popular auction mechanism used in traditional markets for IPOs share allotments, and U.S Treasury debt instruments. However, as an AMM primitive, they have been underwhelming. 


In a Dutch auction, prices start high and reduce until a buyer has been found. Participants of a Dutch auction can decide when they are happy to commit funds. They can either wait in hopes of a price reduction over the course of the auction or risk missing out completely if the token is sold out. 


Dutch auctions differ from other types of markets in that there are multiple buyers but only one seller. Although it has a perfect use case for teams to conduct public token sales in a completely decentralized manner, Dutch auctions aren’t suitable for secondary market exchanges.

DXY (U.S. Dollar Index)

The U.S. Dollar Index (DXY or USDX) is used to measure the relative value of the dollar against a basket of six foreign currencies. The basket includes the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and the Swedish krona. Higher values represent a stronger US Dollar comparatively, whereas lower values showcase a weaker dollar.

Dynamic AMMs

In a Dynamic Automated Market Maker, dynamic variables are incorporated into CFAMM. Bancor v2 was the first AMM to introduce dynamic weights to mitigate impermanent loss. This model was also further developed by Power Pool and 1inch founder Anton Bukov. 

In a DAMM, the weights of the pool are changed based on an external controlling signal, like an oracle. Instead of immediately selling or buying either side of a 50/50 liquidity pool and realizing impermanent loss, the target weight balance changes based on the controlling signal and optimizes the weight to maximize profit for the LPs. 


Early Access

When a game is in early access, it means that it is still in development but has allowed a certain group of players to test the game. The typical stages of early access can be described as pre-alpha, alpha, pre-beta, or beta phases. The difference between them is at what stage of development the game is currently in, with pre-alpha being the earliest and beta generally being the last stage before a game is ready for a full launch. Early access gameplay can either be closed or open, with the former meaning that it is only available to select players and the latter meaning it is open to the general public.

In web3, some gaming projects will conduct an NFT sale before the actual game is ready for a full launch and token gate their early access gameplay to holders of the NFT collection. This model is very similar to what we have seen with Steam’s early access feature or as one of the various benefits offered to participants in a game’s Kickstarter campaign.

Offering early access to a game’s community is a popular method of rewarding the early supporters who have, in some cases, already invested capital into the game’s development. It is also a great way for developers to test their game for bugs before the full launch. Despite all games going through rigorous internal testing, nothing can prepare a team for when the game is released to thousands of players engaging with the game simultaneously.


A cryptographic algorithm used by Ethereum to ensure that funds can only be spent by their owners. It’s the preferred method for creating public and private keys. Relevant for account address generation and transaction verification.

Economic Specialization

Adoption of a focused role within an economic system.

Ecosystem Incentives

Underlying attributes of a network where a token incentivize users to adopt the token’s project and ecosystem.


“Edge” is a repeatable process in which a trader can expect to make money over time, net of costs and fees. In other words, edge can be thought of as a trading process with positive expected value. Expectation is integral when defining edge.

Efficient Market Hypothesis

The Efficient Market Hypothesis (EMH) is a theory that states that financial markets are “informationally efficient,” meaning that the prices of securities fully reflect all available information about those securities. According to this theory, it is not possible for an individual investor or a group of investors to consistently earn returns that are higher than the average returns of the market as a whole, because all relevant information is already incorporated into market prices.

The EMH has three forms:

  1. Weak form: This form of the EMH states that all past market prices and trading volume data are already reflected in current prices.
  2. Semi-strong form: This form of the EMH states that all publicly available information, including financial statements, news articles, and analyst reports, is already reflected in current prices.
  3. Strong form: This form of the EMH states that all information, whether public or private, is already reflected in current prices.

EIP-1599 is an Ethereum Improvement Proposal designed to make network transactions more efficient by using a hybrid system of base fees and tips. In the proposal, a base fee is defined as an algorithmically determined price that all Ethereum users would pay to complete transactions. Tips are defined as optional fees that users could include to speed up their transactions. If implemented, EIP-1559 could greatly reduce transaction costs and improve the overall Ethereum user experience (UX).

Emergency Shutdown

A security feature allowing the system to shut down and make underlying collateral available for redemption by CDP owners and debt-backed stablecoin holders.

Emission Bribes

Emissions bribes are bribes, typically given out by protocols to incentivize voters on platforms like Convex and Aura to vote on their pools. This will direct emissions of CRV (for Convex) and BAL (for Aura) towards the bribed pools. Protocols that vote for CRV/BAL emissions may find it more cost-efficient, as for every $1 spent on bribes, the protocol can receive more than $1 worth of emissions in CRV and CVX.

Emission-adjusted Revenue

Emission-adjusted revenue is a way of determining a protocol’s real revenue. There are a number of crypto projects that generate revenue and simultaneously reward their users and token holders. Sometimes they use the revenue to create value accrual, and sometimes users/token holders are rewarded with emissions. Emission-adjusted revenue analyzes a protocol’s revenue relative to their cost of sales i.e. token emissions/incentives.

End of History

The concept of the “end of history” is associated with political scientist Francis Fukuyama, who popularized it in his 1989 essay titled “The End of History?” and later expanded upon it in his book “The End of History and the Last Man” published in 1992.

Fukuyama’s thesis argues that with the fall of the Berlin Wall and the collapse of the Soviet Union, humanity had reached the endpoint of its socio-political evolution. He claimed that liberal democracy, with its focus on individual rights, market capitalism, and the rule of law, represented the highest and final stage of human development.


ERC1155, pioneered by the Enjin team, brings the idea of semi-fungibility to the NFT world. With ERC1155, IDs represent not single assets but classes of assets.


Pioneered by CryptoKitties, ERC-721 is the first and most commonly used Solidity smart contract standard for representing NFTs today.


Ethereum 2.0 (ETH2) is the next phase in the evolution and improvement of the public Ethereum network. With a shift from a Proof of Work to Proof of Stake consensus algorithm, Ethereum 2.0 will result in improved scalability, security, and usability for the network.


A stack-based virtual machine that executes bytecode. In Ethereum, the execution model specifies how the system state is altered given a series of bytecode instructions and a small tuple of environmental data. This is specified through a formal model of a virtual state machine.

Exchange Traded Fund (ETF)

An exchange-traded fund (ETF) is a type of investment security that functions similarly to that of a mutual fund. Generally, ETFs will follow a particular index, sector, commodity, or other assets. However, unlike mutual funds, ETFs can be purchased or sold on a stock exchange.


Proposal that has been executed. The code is live.

Expected Value

Expected value is a mathematical concept that represents the average outcome of a probability distribution over multiple trials or events. It is calculated by multiplying each possible outcome by its probability and then summing the results.

In other words, the expected value is the long-term average of a random variable or event. For example, if you toss a fair coin, the expected value of the outcome is (0.5 x 1) + (0.5 x 0) = 0.5, where 1 represents the value of getting heads and 0 represents the value of getting tails. This means that over the long term, you can expect to get heads 50% of the time and tails 50% of the time.

Expected value is used in many areas of finance and economics, such as investment analysis, risk management, and game theory. By calculating the expected value of different outcomes, investors and analysts can make informed decisions about the potential risks and rewards of different investments or strategies.

Externally Owned Account (EOA)

An externally owned account (EOA) is an Ethereum or other EVM network account that is controlled using the traditional pair of cryptographic keys (private and public). Control of the private key of an EOA is equivalent to control of the account and any associated funds. The majority of accounts on EVM networks are EOAs.


Fair Launch

A fair launch is a method of launching a token or NFT project that enables all participants to acquire the asset at the same price, time and quantity. A fair launch ensures there is no early access, pre-mine, or pre-determined allocation of tokens.


fAssets represent a share of user’s funds in the vault, which are then made available for investment according to a pre-defined “strategy” specified by the Harvest devs. Whenever an investment strategy generates revenue (or losses), the total amount of assets in the Vault is updated, however the number of existing fASSET shares does not change.

Federal Open Market Committee (FOMC)

The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System, the central bank of the United States. The FOMC is responsible for setting monetary policy, including decisions about the target range for the federal funds rate, which is the interest rate at which depository institutions lend and borrow reserves overnight with each other.

The FOMC is composed of 12 members, consisting of the seven members of the Federal Reserve Board and five of the 12 Reserve Bank presidents. The chair of the Federal Reserve Board serves as the chair of the FOMC.

The FOMC meets several times per year to review economic and financial conditions and make decisions about monetary policy. At each meeting, the committee considers a variety of information, including data on economic growth, employment, inflation, and financial market developments, in order to assess the outlook for the economy and financial markets.

Based on its assessment of economic and financial conditions, the FOMC may decide to adjust its target range for the federal funds rate, or take other actions to influence monetary conditions, such as buying or selling government securities on the open market. The decisions made by the FOMC can have significant implications for financial markets and the economy as a whole.

Federal Reserve

The Federal Reserve (the Fed) is the central bank of the United States. It was created by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed is a quasi-public institution, meaning that it has both public and private characteristics. Its main functions are to conduct monetary policy, supervise and regulate banks and other financial institutions, and maintain the stability of the financial system.

The Federal Reserve is made up of three main entities: the Board of Governors, the 12 Federal Reserve Banks located throughout the country, and the Federal Open Market Committee (FOMC). The Board of Governors, which is located in Washington, D.C., is responsible for setting monetary policy and supervising and regulating banks and other financial institutions. The Federal Reserve Banks are responsible for carrying out the monetary policy decisions of the FOMC and providing services to banks and other financial institutions. The FOMC is responsible for setting monetary policy by deciding the target for the federal funds rate, which is the interest rate at which banks lend to each other overnight.

The Federal Reserve plays a crucial role in the U.S. economy and financial system, and its policies have a significant impact on a wide range of economic and financial indicators, such as inflation, interest rates, and employment.

Fee Ratio Multiple

The Fee Ration Multiple (FRM) is a technique used to measure the increased fees PoW chains will need to have to maintain their security without inflation.

FRM is expressed in multiples and is found by dividing Transaction Fee Revenue by Transaction Fees. This equation gives each chain a numerical value that represents the multiple fees needed to increase to maintain a chain’s security budget. For example, if Bitcoin miners make $10B in revenue and only $100M in fees, Bitcoin would have an FRM of 100 ($10B/$100M = 100). An FRM of 100 means that the fee revenue on Bitcoin would need to increase by 100x to maintain its security budget.

The lower the FRM, the better, as the chain will not need to increase its fees to cover its security.


Once a block is finalized, it is secure regardless of network latency (unlike confirmations in PoW), and reverting the block requires >= 1/3 of validators to cheat in a way that’s detectable and can be used to destroy their deposits

Finality Gadget

Finality gadget allows blockchain to execute transactions optimistically and only commit them after they have been sufficiently and provably audited.

Fixed Coupon Notes

Fixed coupon notes (FCN) are a type of exotic option structured product with equity option and bond-like characteristics. FCNs act like bonds as investors provide capital to the note issuer in return for interest that is paid periodically. The issuer returns the initial capital (principal) when the note expires. The periodic yield payment is predetermined. FCNs act like equity in that it’s linked to the price performance of the underlying asset. And when the asset price is down, the investor experiences losses on their principal. FCNs are for investors with a neutral or bullish market outlook.


FLAC (Free Lossless Audio Codec) files are another example of lossless audio, but there’s not much technical support for them-as in, you can play an MP3, AAC, or WAV file on almost any device, but not FLACs.

Flash Loan

Flash Loans allow you to borrow any available amount of assets without putting up any collateral, as long as the liquidity is returned to the protocol within one block transaction. To do a Flash Loan, you will need to build a contract that requests a Flash Loan. The contract will then need to execute the instructed steps and pay back the loan + interest and fees all within the same transaction

Floor Price

The lowest price of a NFT in any given collection of NFTs


A fork occurs when one blockchain is divided into two blockchains. This type of split in a blockchain network happens when an update is made to the blockchain protocol but not all of the network participants, or nodes, agree to adopt it. Blockchains can experience two main types of forks – a soft fork or a hard fork.


The organization that was created to develop and bootstrap the protocol.

Fractional-Algorithmic Stablecoin

A stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market’s pricing of the stablecoin.

Frame rate

Video frame rate specifies the number of images or video frames that are encoded per second and applies to encoded video recordings, like an AVI file or a live stream to YouTube. Common frame rates include: 24 fps (cinematic), 30 fps (television), and 60 fps (game play). The choice of frame rate depends on the motion effect you want, from a more natural looking motion blur (24 fps), to crisp fast moving sports (30 fps), and high definition game play (60 fps). Reducing the frame rate reduces the amount of bandwidth needed for live streaming since there are fewer video frames to stream.

Fraud Proof

Fraud Proofs present evidence that a state transition was incorrect. They reflect an optimistic view of the world: the assumption is that blocks represent only correct states of L2 data, until proven otherwise

Free-to-Own (Free Mint)

Free-to-Own is a distribution model for NFTs where the tokens can be minted for free by the community. The creator does not take any revenue upfront and instead relies upon royalties to generate revenue which is then invested into the project. This aligns incentives between the team and the community in a better way. Free-to-Own is in contrast to typical mints where you have to pay to mint an NFT.

This term was pioneered by Limit Break and their DigiDaigaku NFT collection.


When a bot sees a pending transaction in the mempool and pays higher gas to jump in front of it, often causing the affected transaction to fail in the process

Full Node

Nodes that download and check that every transaction in the blockchain is valid. While full nodes require a lot of resources and hundreds of gigabytes of disk space, they are the most secure nodes as they can’t be tricked into accepting blocks that have invalid transactions.

Fully Homomorphic Encryption (FHE)

Fully homomorphic encryption (FHE) is a special way to encrypt data such that anyone can perform computation (addition and multiplication) over encrypted data (also known as ciphertext) without having to first decrypt it. As any program can be represented as a combination of addition and multiplication circuits, FHE enables Turing-complete private smart contracts.

Funding Rate

The funding rate helps the price of perpetuals track the index price of the underlying asset. If the perpetuals price trades above the price of the underlying asset then longs pay funding to shorts to incentivize a convergence of price (and vice versa).


A futures contract is an agreement to buy or sell an asset at a predetermined price at a specific time in the future. Futures contracts are traded on futures exchanges and can be traded with margin.


Gaming Guild

Decentralized gaming guilds collectively own game items and/or collectibles, and share in their usage and proceeds when sold.

Gartner’s Hype Cycle

Gartner’s Hype Cycle represents the maturity and adoption of new technologies in solving real business problems. The Gartner Hype Cycle methodology gives you a view of how a technology or application will evolve over time, providing a sound source of insight to manage its deployment.

Each Hype Cycle drills down into the five key phases of a technology’s life cycle.

  • Innovation Trigger
  • Peak of Inflated Expectations
  • Trough of Disillusionment
  • Slope of Enlightenment
  • Plateau of Productivity

Refers to the unit that measures the amount of computational effort required to execute specific operations on the blockchain network.


Gateways are devices that make use of Internet of Things (IoT) technology to connect to a blockchain system or related network infrastructure. Most IoT network devices are generally inhibited by poor battery life, limited computing power, restricted communication bandwidth, and other criteria that affect performance. Gateways were designed to help combat these inefficiencies and can be made up of any number of devices that possess the capability to run a network themselves. Examples of gateways include a mobile phone connected to various wearable devices, a smart car linked by multiple in-car devices, or a 5G base station connected to a multitude of IoT devices.

Gauge Voting

Simply put, a gauge weight translates into how much of the daily token inflation a pool receives.

Generative Art

Generative art describes pieces of art that have gone through a generation process by an algorithm, often via smart contract in the context of NFTs. It can be seen as ‘collaboration between an artist and an autonomous system’.


A geotag is a specific location added to a photo, video, or other social media post. Geotags can expose your posts to more people, since content is often searchable by location.

Ghost Liquidity

Ghost Liquidity is defined as observable/seemingly accessible liquidity that instantly disappears when an entity tries accessing it. It is sometimes referred to as “order book spoofing” as well.


GIF is an acronym for Graphics Interchange Format, a file format that supports both static and animated images. GIFs rose to popularity as a way to react on social media without words. Facebook and Twitter both support animated GIFs.

Global Liquidity

When we refer to “global liquidity”, we’re talking about funding liquidity, which is private sector access to finance through savings and credit. CrossBorder Capital defines this as balance sheet capacity.

“Liquidity consists of all cash and credit available to financial markets, once the immediate transactions needs of the real economy have been fulfilled.” 

Golden Cross

A Golden Cross is a technical analysis term used to describe a bullish signal that occurs when the 50-day moving average crosses above the 200-day moving average.

The Golden Cross is sometimes used as a buy signal by traders, as it’s considered a confirmation that the stock’s upward trend is likely to continue in the near future.


Governance is simply a tool an organization uses to decide where power should reside and who gets to click on what button. This process places rails around operations, which helps an organization get from point A to point B more smoothly. Processes and rules can be restrictive, but for large organizations, having these processes and rules are essential, if only to prevent implosion before it gets the chance to move from point B to point C. So governance is not only about today, but even more about tomorrow. When a group agrees to move forward as a DAO-whatever that might entail-its members can make choices about the processes and rules that help them do that.

Governance Markets

Platforms that allow for the trading of influence in governance where votes are bought, sold, lended, borrowed, and priced. It follows that governance outcomes can also be bought and sold.

Governance Minimization

Governance minimization means reducing the power and reliance on governance wherever possible. Governance minimization is not the idea that governance can or should go away entirely.

Governance Poll

A time-based vote to gather a soft consensus and measure community sentiment on potential changes to the Protocol.

Governance Portal

A front-end application that allows you to interact with the protocol’s on-chain governance.

Governance Security Module

A security feature that delays certain governance actions by a predetermined amount of time.

Governance Token

Governance tokens are cryptocurrencies that represent voting power on a blockchain project. They represent the main utility token of DeFi protocols since they distribute powers and rights to users via tokens.

Governance Token DAOs

Usually fully permissionless, depending on the token used. Mostly these governance tokens can be traded permissionlessly on a decentralized exchange. Others must be earned through providing liquidity or some other ‘proof-of-work’. Either way, simply holding the token grants access to voting.

Governor Bravo

Governor Bravo is the governance module of the protocol; it allows addresses with more than 65,000 COMP to propose changes to the protocol. Addresses that held voting weight, at the start of the proposal, invoked through the getpriorvotes function, can submit their votes during a 3 day voting period. If a majority, and at least 400,000 votes are cast for the proposal, it is queued in the Timelock, and can be implemented after 2 day

Graph Node

The Graph blockchain protocol is designed to index and query data from blockchains, and Graph Node is the tool that enables this function. Graph Node is a Rust-based framework that acts as a master server to event source the Ethereum blockchain (the only blockchain currently supported) and the system’s corresponding subgraphs. It deterministically updates a data store that can be queried and searched via the GraphQL endpoint. In essence, Graph Node is the main server that carries out the processes needed to obtain the answers to complex queries from blockchain databases.


Hard Fork

Hard forks can be used to change the rules of consensus, but they require coordination between all participants in the system. Any nodes that do not upgrade to the new consensus rules are unable to participate in the consensus mechanism and are forced onto a separate chain at the moment of the hard fork. Thus, a change introduced by a hard fork can be thought of as not “forward compatible,” in that non-upgraded systems can’t process the new consensus rules after the hard fork event.

Hard Landing

A “hard landing” refers to an abrupt economic slowdown or downturn following a period of high growth. Restrictive monetary policy meant to curb inflation can sometimes lead to a “hard landings,” which occur when an economy slips into a stagnant period of growth or even a recession.

A “hard landing” can be contrasted to a “soft landing,” which is considered to be a more desirable goal for economic policy makers. A “soft landing” occurs when fiscal and monetary policy is reduced in an attempt to curb inflation without sacrificing jobs or inflicting economic pain on the economy.

Hardware Wallet

A hardware wallet is a physical device which stores a user’s private keys. They are a type of cold wallet since they store the keys offline. Hardware wallets are widely considered to be the most secure option for storing private keys.

Hash Functions

Hash functions are algorithms that take data of any size and convert it into a fixed-length hexadecimal number, or hash. Hash functions are one-way functions and cannot be inverted to reveal the data input to create the hash. The Bitcoin blockchain utilizes the SHA-256 hash algorithm in its transaction validation process

Hash Rate

The hash rate is the unit of measure for the computing power of a Proof-of-Work consensus mechanism. Valued in terahashes per second (TH/s), and increases or decreases according to the number of miners operating on the network.

Health Factor

The health factor measures the collateralization status of a position, defined as the ratio of the borrowing capacity over the outstanding debts. The higher the value is, the safer the state of your funds are against a liquidation scenario. If the health factor reaches 1, the liquidation of your deposits will be triggered.

Held-to-Maturity (HTM)

Held-to-maturity (HTM) securities are debt securities that a company or an investor intends to hold until maturity. These securities are typically purchased with the intention of collecting the interest payments and principal repayment at maturity rather than selling them before maturity to realize capital gains or losses.

Held-to-maturity securities are recorded on the balance sheet at their amortized cost, which is the initial purchase price plus any accrued interest, minus any principal payments received. The value of these securities is not subject to daily market fluctuations as they are not revalued to their current market value — aka they are not marked-to-market.

Examples of held-to-maturity securities include government bonds, corporate bonds, and municipal bonds.

High Volume Nodes

High Volume Nodes (HVN) are peaks in volume at or around a price level. HVN can be seen as an indicator of a period of consolidation. Usually there is a great deal of activity on both the buy and sell side and the market stays at that price level for a great deal of time compared to other levels in the profile. This can imply a ‘fair value area’ for the asset. When price approaches a previous HVN (or fair value area) a sustained period of sideways movement is expected. The market is less likely immediately break through that price.

Holographic Consensus

Holographic Consensus (HC) was a concept spearheaded by DAOstack. This voting mechanism associates a prediction market with each proposal. Predictors can stake funds for or against a proposal they believe will pass or fail. If they predict correctly, they benefit financially. Proposals that are predicted to pass are ‘boosted’ and voting switches from 50% quorum to relative majority (where you only look at For vs. Against votes, and no quorum is needed), making the barrier to pass proposals much lower than proposals that don’t have funds staked on them.


A hotkey (key connected to the internet) that is used to sign the validator’s assigned duties.


Hotspots are devices that operate on the Helium Network both as specialized network nodes and as wireless internet hotspots. Helium Hotspots are manufactured by multiple vendors and are designed to be easily deployable solutions to participate in the Helium Network and earn rewards for providing internet coverage to various devices on the network.


The Cosmos Hub is the primary blockchain protocol used for connecting with other blockchains as part of the Cosmos Network’s endeavor to facilitate an ‘internet of blockchains.’ The Cosmos Hub is a Proof-of-Stake blockchain built by the Tendermint team. Its ATOM token is used to both secure the network through staking and vote on governance decisions.

Hub & Zone

Cosmos ecosystem has two classes of blockchains: Hubs and Zones. Zones are regular heterogenous blockchains and Hubs are blockchains specifically designed to connect Zones together. When a Zone creates an IBC connection with a Hub, it can automatically access (i.e. send to and receive from) every other Zone that is connected to it. As a result, each Zone only needs to establish a limited number of connections with a restricted set of Hubs. Hubs also prevent double spending among Zones. This means that when a Zone receives a token from a Hub, it only needs to trust the origin Zone of this token and the Hub.

Hybrid Constant Function Automated Market Maker (HCFAMM)

An example of a Hybrid Constant Function Automated Market Maker (HCFAMM) is Curve, which utilizes a combination of a Constant Product Automated Market Maker (CPAMM) and Constant Sum Automated Market Maker (CSAMM.)  One of Curve’s key features is its StableSwap invariant design, which allows for more efficient trading when it comes to pegged assets relative to a constant product AMM. 


Trading efficiency is achieved by reducing price slippage with the use of an “amplification coefficient” (A) to the constant product equation. The use of leverage with A is dynamic and provides either:

  • Infinite leverage when there is a large price divergence between asset x and y or
  • Zero leverage when the price is 1 to 1 (essentially functioning like a constant product AMM).

A higher A implies the pool is more tolerant to slippage when an imbalance exists, as a greater amount of leverage effectively simulates deeper liquidity. The performance of the StableSwap invariant is best demonstrated by this chart, where dx is the change in price for coin x. We dive into a detailed comparison of Curve v2 and Uniswap v3 in a recent Delphi Pro report (unlocked for everyone to read).



Inter-Blockchain Communication protocol (IBC) is an interoperability protocol for communicating arbitrary data between blockchains. IBC leverages the instant finality property of Tendermint consensus (although it can work with any ‘fast-finality’ blockchain engine) to allow heterogeneous chains to transfer value (i.e. tokens) or data to each other.

Impermanent Loss

Impermanent loss is a temporary loss of funds occurring when providing liquidity. Impermanent loss is usually observed in standard liquidity pools where the liquidity provider (LP) has to provide both assets in a correct ratio, and one of the assets is volatile in relation to the other, for example, in a Uniswap DAI/ETH 50/50 liquidity pool.

Impermanent loss

Impermanent loss is a phenomenon observed in AMM pools. It’s the difference in value between holding the tokens together in a liquidity pool and separately as assets in your wallet over time. The divergence in relative price between the two tokens in a pool (extracted by arbitrageurs maintaining the pool balance) results in Impermanent loss. 

Impermanent loss is made permanent or realized when the LP removes liquidity from the pool. Highly correlated assets i.e. USDC-USDT suffer less IL than uncorrelated assets like WETH-APE.

Realistically, impermanent loss is just a form of opportunity cost. And thus mitigating it requires a user to be able to predict how asset prices are going to move in the future.

In-game asset

In-game assets are digital assets, items, or possessions that are used by a player within a game. In the case of blockchain games, in-game assets may be associated with an NFT specific to that asset. Among other things, this enables ownership of these assets to be verified on the blockchain. In traditional non-blockchain games, ownership is not verifiable over a shared ledger. Instead, ownership is determined and verified by the company in control of the game.


Indexers are node operators in The Graph Network that stake Graph Tokens (GRT) in order to provide indexing and query processing services. Indexers earn query fees and indexing rewards for their services.

Industrial Policy

Industrial policy refers to a set of strategic measures and government interventions aimed at promoting the growth and development of specific industries or sectors within an economy. It involves a range of policies, regulations, and initiatives designed to enhance the competitiveness and productivity of targeted industries.

The objective of industrial policy is to foster economic transformation, stimulate industrialization, and enhance overall economic performance. Governments often intervene in the economy to address market failures, promote innovation, improve infrastructure, provide targeted incentives, and create a favorable business environment for specific industries or sectors.


Inflation refers to the sustained increase in the general price level of goods and services in an economy over a period of time. In other words, inflation means that, on average, the prices of goods and services are increasing, and the purchasing power of money is decreasing.

Inflation is typically measured by the percentage change in the Consumer Price Index (CPI) or the Personal Consumption Expenditures (PCE) index.

Inital Margin

The amount a trader must deposit with their broker to initiate a trading position.

Initial Breeding Offering (IBO)

Introduced by BreederDAO, IBOs allow participants to stake BREED via a BreederDAO chute to guarantee preferential access to early batches of in-game assets manufactured on a particular production line. BreederDAO chutes utilize an oversubscription format (similar to IEOs) where the percentage of total chute staking pool that a participant has at the end of the staking period dictates the manufacturing round they are entitled to.


Inscribing is the process of putting data on Bitcoin. The data is inscribed to a specific sat, which is tied forever. If the sat is transferred, the data goes to the new address. Inscriptions retain their order forever – creating important ramifications for their value.

Insured Constant Product Automated Market Makers (ICPAMM)

Insured or bonded constant product AMMs work exactly as a CFAMM explained above, with one large twist – users only provide one side of the pool’s liquidity. Every single pool has one variable asset and one common asset. The common asset is a token native to the protocol, which is a necessity since the DEX has to have absolute control over supply. As a result, single asset deposits are enabled, dramatically improving the user experience for LPs.


An example of this model is Bancor. This Delphi Pro article explores Bancor v2 in depth. Bancor uses its native governance token, BNT, to provide LPs with protection from impermanent loss. LPs earn swap fees to offset some portion of their IL, and the Bancor protocol guarantees any other losses. It is important to note that this IL protection is offered by the protocol and less so by the native AMM design. As such, Bancor experienced severe dumping of its native token during a volatile period that lead to them suspending IL protection

Interchain Accounts

An IBC standard that gives Cosmos zones (blockchains) the ability to open and control accounts on other zones, negating the need to develop new IBC standards for every cross-chain interaction. Zones can be hosts, controllers, or both. Hosts will harbor accounts from other zones, listen for IBC instructions, and then execute the transactions. Controllers create accounts on host zones and control them.

The analogy frequently used is that an Interchain Account transaction is a letter inside an envelope inside a box.

  1. Zone A sends the box to Zone B through IBC
  2. The IBC module on Zone B will open the box and send the envelope to the Zone A controlled account on Zone B
  3. The Interchain Account will open the envelope, read the letter and complete the Zone B-specific task that is required

Interchain Accounts enable a more seamless end-user experience; users don’t need to leave a chain to do activities on others. This creates a better UX and mitigates potential operational and security risks like manually transferring assets between chains, managing different wallets for different chains etc.

Interchain Security

Interchain security is the Cosmos solution to shared security. It allows for a provider chain (like the Cosmos Hub), to be in charge of producing blocks for a consumer chain. The participating validators would run two nodes, one for the Cosmos Hub and one for the consumer chain, and receive fees and rewards on both chains.

Interest-bearing Tokens

Interest-bearing Tokens or ‘ibTokens’  are interest accumulating tokens that represent a share in a lending pool that grows in value as borrowers pay interest on them.

Internet Protocol (IP)

Internet Protocol (IP) is the method or protocol by which data is sent from one computer to another on the internet. Each computer — known as a host — on the internet has at least one IP address that uniquely identifies it from all other computers on the internet.


A concept of allowing blockchains to be compatible with each other and build upon each other’s features and use-cases.


The Internet of Things (IoT) refers to physical objects that are connected to the internet to enable features. IoT devices include appliances, home media systems, and security systems among a rapidly increasing list of others. IoT products offer increased functionality, share data, and interact with each other.


The InterPlanetary File System (IPFS) is a network for storing files and transferring verifiable data peer-to-peer. Developed by Protocol Labs, the IPFS is complementary to Filecoin, which is a blockchain designed to incentivize persistent data storage. Both protocols, while complementary, can be used separately.


An ISRC (International Standard Recording Code) is a string of 12 alphanumeric characters that is used to identify any sound recording or music video. ISRCs are like ISBNs for books or VINs for cars-no two are identical. ISRCs make recordings automatically identifiable, which helps ensure that royalties are properly distributed.


Just In Time Liquidity

Just In Time Liquidity is an occurrence unique to Uniswap v3’s concentrated liquidity. A large amount of liquidity is added by a JIT bot when they see a large trade in the Ethereum mempool. It is then removed immediately after within the same block. The large amount of liquidity added before the trade reduces price impact for the trader by increasing the pool size, but at the same time dilutes the trading fees distributed amongst LPs from the trade. Unlike MEV, where a sandwiched trade causes a loss to the trader, JIT causes a loss to LPs.



A kernel is the core of an OS and sits between the user and the hardware. It controls all the functions of a machines hardware including CPU instructions, memory management, file systems, and scheduling. When a user and app makes an input, the kernel interprets the input, and send instructions to the CPU and allocates system resources to it.


A knock-in is a feature of barrier options that specifies a strike price at which the option comes into existence. For example, a barrier put option with a knock-in strike price of $100 means the option only comes into existence once price goes below $100. Until then, it has no value.


A knock-out is a characteristic of a barrier option that specifies a price at which the option ceases to exist. For example, a barrier call option with a knock-out strike price of $120 means that the option is active while the underlying price is $0-119.99, and the option ceases to exist once the price of the underlying is above $120.


Lazy Consensus

Anyone in the community can make a motion for something to happen. If no one objects within a certain amount of time, it happens. If someone objects, then a reputation-weighted vote decides whether or not it should happen.

Lending Spread

In the case of lending, the spread is the difference between the lending APY (the % of interest paid to lenders) and the borrowing APY (the % of interest paid by borrowers).


The proportion of your trade that will be paid for with borrowed funds. If you are using 2x leverage, you will be funding half of the trade.

Leverage Ratio

Leverage ratio is an indicator which shows how much leverage is being used on average by crypto traders. The leverage ratio for a particular asset is defined as the ratio of global open interest of a digital asset to its market capitalization, expressed in percentage terms. Global open interest represents the combined dollar value of open interest on perpetual futures across all major exchanges.

Light Node

Light nodes are typically downloaded wallets and are connected to full nodes to further validate the information that is stored on the blockchain.

Limit Order

A type of order that only executes at the specified price.

Liquid Staking

Liquid staking protocols allow users to earn staking rewards on their assets while retaining liquidity. Users of these protocols can deposit the staking tokens and receive a liquid derivative token in return that still accrues the staking yield. The DAO controlled smart contract then stakes tokens with DAO-picked staking providers.


The forced closure of a trade due to the available margin being exhausted, forcing the exchange to close the trade to stop losses and mitigate risk.

Liquidation Bonus

The bonus received by liquidators to incentivise the purchase of specific collateral that has a health factor below 1.

Liquidation Threshold

The threshold of a borrow position that will be considered undercollateralized and subject to liquidation. If a collateral has a liquidation threshold of 80%, it means that the loan will be liquidated when the debt value is worth 80% of the collateral value.


Liquidity refers to the degree to which an asset or security can be easily bought or sold in the market without causing a significant change in its price.

It is a measure of how quickly and efficiently an asset can be converted into cash. Assets that are highly liquid are usually in high demand and have active markets, which allows buyers and sellers to transact easily and without significant price fluctuations.


The depth of a market. A market with good liquidity has a lot of traders actively trading, which means there are lots of buy and sell orders enabling other traders to enter and exit positions, regardless of size, easily without too much market fluctuation.

Liquidity Book

Trader Joe’s v2 Liquidity Book (LB) is a concentrated liquidity DEX similar to Uniswap v3 but with some key differences. On LB, liquidity is allocated into discrete price bins (similar to Uni v3’s ticks), and trade occurs within the active price bin. Traders enjoy zero slippage swaps if the trader occurs within the active price bins as LB implements a constant sum model (x+y=K) within each price bin. Additionally, liquidity positions utilize a fungible ERC-1155 token standard that gives LPs the flexibility to add liquidity in a non-uniform and flexible way. This opens up various strategies that one can utilize.

Liquidity Bootstrapping Pools

One defining feature of constant mean AMMs is the ability to change the target weight for an asset over a specific period of time. This feature birthed Liquidity Boostrapping Pools (LBPs) which have since become one of Balancer’s most compelling use cases. LBPs allow for fair market access with low starting capital. 

In a typical LBP, the pool balance starts with the new protocol token and a stablecoin in an 80:20 ratio. The example above shows Perpeptual Protocol launching $PERP on the first ever LBP.  Over the course of the sale, the pool balance shifts to 20:80. This structure allows new projects to conduct public sales in a fair market on decentralized infrastructure without having to worry about frontrunning. Historically, it also allows for wider genesis token distribution. 

Liquidity Capitalization

Liquidity Capitalization of an asset is defined as the ratio of market capitalization to the amount of liquidity (in USD) that resides within a pre-defined price range. The ratio helps us determine the best price one would obtain in the event of a large market buy/sell. The ratio does not take into consideration exogenous factors such as ghost liquidity, order addition/removal, etc.

Liquidity Cascade

A liquidity cascade occurs when a decrease in liquidity leads to a rapid and widespread sell-off of assets.

In a liquidity cascade, investors may begin to sell off assets not directly affected by the liquidity shortage, which can cause a domino effect and further exacerbate the crisis. This can lead to a vicious cycle, where falling asset values lead to more selling, which in turn causes further declines in value.

Liquidity cascades can significantly impact the broader economy, leading to widespread financial instability, credit freezes, and even bank failures.

Loan to Value Ratio (LTV Ratio)

The Loan to Value (LTV) ratio defines the maximum amount of currency that can be borrowed with a specific collateral. For example, if LTV=75%, for every 1 ETH worth of collateral, borrowers will be able to borrow 0.75 ETH worth of the corresponding currency.


A buying position that enables the trader to profit if the price of an asset increases.

Loss Versus Rebalancing (LVR)

Loss Versus Rebalancing (LVR) is a metric designed to quantify the impact of adverse selection on AMM LPs. LVR is calculated as the difference between the value of a liquidity pool and a rebalancing portfolio. LVR can be thought of as the best case scenario for arbitrageurs.

Though in many ways AMMs are more reliable than order books, they are prone to having stale prices compared to the market. In an exaggerated example, if an AMM quotes ETH at $1000, and the market price jumps to $2000, informed traders will purchase cheap ETH from the liquidity pool until the price of ETH reaches $2000. If the pool originally contained $1000 USDC and 1 ETH, it would now hold around $1414 USDC and .707 ETH. LPs effectively sold ~0.29 ETH at ~$1414, well below the true market price of $2000. The LVR on this trade would be:

If the price returned to $1,000, the AMM holdings would return to 1,000 USDC and 1 ETH, but it would have purchased 0.29 ETH at $1,414, well above market price of $1,000.

If the LP held a rebalancing portfolio and executed the same trades as the liquidity pool on an external exchange like Binance, they would have performed much better.

Once the price of ETH returns to $1,000, impermanent loss would be 0, while LVR would be >0. LVR is a function of volatility and will be >0 unless price remains constant enough such that trading fees offset losses to arbitrageurs. Impermanent loss only looks at a starting and ending point, and compares LP performance to that of an omniscient trader. IL ignores the cost LPs assume by taking the other side of trades with arbitrageurs.

Loss versus rebalancing has some very aggressive assumptions. Rebalancing on a feeless, infinite liquidity exchange is not a viable alternative for LPs. Like Black-Scholes, LVR also assumes volatility is constant and LPs are delta-hedged.

Furthermore, there are many pairs where Uniswap is Binance, as it is the deepest/most liquid venue and where price discovery takes place. In this scenario, a large portion of the volatility would be noise traders with no edge rather than arbitrageurs.

LVR has some tough to swallow assumptions, but is an earnest attempt at measuring a real variable. Loss versus rebalancing offers a new way to conceptualize the costs associated with liquidity provision. It is likely new DEXs begin to emerge that are LVR resistant, making passive liquidity provision more viable without increasing costs to traders.

Low Volume Nodes

Low Volume Nodes (LVN) are the opposite. They are valleys (or significant drops) in volume at or around a price level. Low Volume Nodes are usually a result of a breakout rally or a breakdown. During a rally or a breakdown, there will typically be an initial burst of volume and then a significant drop off. The drop off can imply an “unfair value area” for the asset. When price approaches a previous LVN (or unfair value area), the market is much more likely to rally through or bounce off of that price level. Because it is seen as an unfair value area, the market will not spend as much time there compared to some other levels in the profile.

LP Share Token

Liquidity provider tokens or LP tokens are tokens issued to liquidity providers on a decentralized exchange (DEX) that run on an automated market maker (AMM) protocol.


Maintence Margin

The amount of money a trader must have on deposit in their account to continue holding a position.


Margin is the portion of your own funds that you put into a trade.

Mark-to-Market (MTM)

Mark-to-market (MTM) is an accounting practice used to value assets and liabilities based on their current market value, which sometimes refers to the price they are trading at on the open market.

MTM accounting is commonly used for financial instruments that are traded on public markets, such as stocks, bonds, and derivatives. It is also used for non-traded assets and liabilities, such as real estate, private equity investments, and pensions. By using MTM accounting, companies can provide more transparent and accurate financial statements that reflect the current market conditions and the economic realities of their assets and liabilities. However, MTM accounting can also lead to increased volatility in financial statements, especially during periods of market turbulence, which can make it challenging for investors and analysts to assess the true financial condition of a company.

Notably, banks only mark-to-market “available for sale” (AFS) securities, which are those securities that might be sold before maturity. The “held to maturity” (HTM) securities, which are those securities that are expected to be held to maturity, are reported at cost, not at fair value. Banks may not mark to market their bond holdings for HTM securities because they do not intend to sell them and realize the losses or gains.

However, this also exposes them to the risk of insolvency if the market value of their assets declines significantly due to rising interest rates (e.g. 2023 Banking Crisis). Banks may also seek regulatory relief to amortize their mark-to-market losses on bond holdings over a longer period of time to reduce the impact on their capital and profitability.

Mark-to-Market (MTM)

In trading, mark to market involves recording the price or value of an asset, portfolio, or account to reflect the current market value rather than book value. This is done most often in futures accounts to ensure that margin requirements are being met. If the current market value causes the margin account to fall below its required level, the trader will be faced with a margin call.

Market Neutral

“Market neutral” refers to an investment strategy that seeks to generate returns without taking directional bets on the overall direction of the market. The goal of a market neutral strategy is to profit from the relative performance of different securities or asset classes, while minimizing exposure to overall market movements.

In a market neutral strategy, the investor takes both long and short positions in a portfolio of securities or asset classes. The long and short positions are designed to offset each other, so that the overall exposure to the market is minimized. This allows the investor to profit from the relative performance of different securities or asset classes, while reducing the impact of market movements on the portfolio.

Market neutral strategies can be executed using a variety of financial instruments, including stocks, options, futures contracts, and ETFs. The strategy is often used by hedge funds and other institutional investors who seek to generate returns in a variety of market conditions.

Market Order

An order that executes instantly, taking the best the market offers to fill the order.

Market Policies

These policies are defined in the context of each market and, for markets belonging to the Aave ecosystem, they are specified within the boundaries identified by the Protocol Policies. A market participating in the Aave ecosystem needs to operate under safety policies that are not violating the protocol safety policies.

Market Profile

A Market Profile is a graphical representation that combines price and time information in the form of a distribution. A Market Profile is used to determine elapsed time, number of ticks and volumes traded at specific prices, or over a price interval, over a given period.

Market Risk

Market risks are linked to the market size and fluctuations in offer and demand. These risks are particularly relevant for the assets of the protocol: the collateral.

Market Variance

Market variance, also known as market volatility, is a statistical measure that represents the degree of variation in the prices of financial assets or securities over a given period of time. It is often measured using the standard deviation of the returns of an asset or a portfolio of assets.

Higher market variance indicates that prices are fluctuating more widely, while lower variance indicates that prices are more stable. Market variance can be caused by a variety of factors, including economic conditions, political events, and market sentiment.

Market variance is an important consideration for investors, as it can impact the risk and return of an investment. High variance can indicate higher risk, but it can also present opportunities for profit through volatility trading strategies. Lower variance may be preferred by some investors who prioritize stability and predictability over potential returns.

Massive Multiplayer Online

The term Massively Multiplayer Online (MMO) and the term is usually applied to any online video game in which a player can interact with a large number of players simultaneously.

World of Warcraft (WoW), Runescape, and EVE Online are three examples of popular MMOs in the traditional gaming industry.

Illuvium, Star Atlas, and Embersword are all examples of Blockchain MMOs. These games also fit into the RPG (Role Playing Game) genre and thus are known as MMORPGs.


An online meme is a joke or comment made for sharing on social networks. It usually appears in the form of a graphic or GIF with text above the image or superimposed.


Where an unconfirmed transaction waits after being verified by a node and before being included in a block

Merkle Root

A Merkle root is found at the top of a Merkle tree and represents the transaction hashes located at the bottom of its associated Merkle tree. These transaction hashes are then repeatedly hashed in pairs until a singular Merkle root is left. The resulting Merkle root can then be used to validate every transaction hash located in its Merkle tree.

Merkle Tree

A Merkle tree is a way of organizing and structuring large amounts of data to make it more straightforward to process. Merkle tree structure enables users to verify that an individual transaction has been included in a block without having to go through the process of downloading the entire blockchain.

Meta Governance/Soft-Governance

Discussions that inform the direction of land and the implementation processes behind policy but which don’t quality as policy themselves.


Metadata is data that provides information about other data; in the case of an NFT, it describes essential properties, including its name, description, and anything else its creator feels is important. Often, the NFT’s metadata also contains links to various media such as images.

MetaMask Snaps

MetaMask Snaps are applications built on top of the existing MetaMask wallet that run in an isolated environment and extend the functionality of the wallet. Introduced as part of MetaMask’s Flask program (an experimental sandbox for developers), external developers can develop their own apps to add/ customize features of the existing MetaMask application. For example, Snaps can add support for different blockchain protocols and create custom transaction confirmation screens.


Miner extractable value (MEV) refers to the maximum value that can be extracted from block production in excess of the standard block reward and gas fees by including, excluding, and changing the order of transactions in a block.


MEV-Boost is an early out-of-protocol iteration of Proposer-Builder Separation (PBS). It was developed by Flashbots and went live on Ethereum after the Merge. It allows validators (proposers) to outsource block building to sophisticated entities (builders) who can build higher value blocks that maximize MEV received. A doubly-trusted entity known as a relay sits between the builder and proposer.

MEV-Boost seeks largely to address two shortcomings of MEV-Geth from proof-of-work Ethereum:

  1. Client diversity – MEV-Boost is run as a sidecar compatible with any Ethereum client (as opposed to being a fork of Geth).
  2. Open to many participants – MEV-Boost allows any validator to participate while reducing the trust that needs to be placed in them by using a commit-reveal scheme over blocks. MEV-Geth only worked with a handful of mining pool operators who were trusted to behave honestly.

Miners are an essential component of every Proof-of-Work (PoW) blockchain consensus protocol, and are responsible for validating new transactions and recording them on the blockchain ledger. Miners validate these transactions by solving complex math problems, which results in the minting of new tokens while reinforcing the network’s security and trustworthiness. In order to incentivize users to allocate processing power to mine new blocks, miners are typically rewarded a fraction of a network’s native currency with every successfully mined block.


Minting is the creation of new tokens on the blockchain, using computational processes to validate and record the information on-chain. This can refer to both fungible tokens and non-fungible tokens (NFTs).

In NFTs, minting also refers to the process of distributing NFTs to collectors. This is typically done via a smart contract.

Money Market Fund (MMF)

Money market funds are a type of mutual fund that invests in low-risk, short-term debt securities, such as commercial paper, certificates of deposit, and Treasury bills. These funds aim to provide investors with a relatively safe and liquid investment option that generates a modest level of income.

Money market funds typically maintain a stable net asset value (NAV) of $1 per share, which means that the fund’s value is not expected to fluctuate significantly. Money market funds are often used as a cash management tool by individuals and institutions to temporarily park cash and earn a small return while maintaining easy access to their funds.


Moneyness represents an option’s intrinsic value relative to the current spot price of the underlying asset. This is calculated using spot/strike price. For example, if SOL is $42 now, the moneyness of a $40 strike is $42/$40 = 1.05.

Moneyness is interpreted as follows:

  • More than 1 = in-the-money calls / out-of-the-money puts
  • 1 = at-the-money calls/puts
  • Less than 1 = out-of-the-money calls / in-the-money puts
Monte Carlo Simulation

Monte Carlo Simulation is a mathematical technique used to estimate the possible outcomes of an uncertain event.


MP3 (MPEG-1 Audio Layer 3) files are what everyone usually thinks of when they think of an audio file. It’s the most popular audio format on the planet. MP3s use lossy data compression-“lossy” literally refers to the loss of data-as the larger original audio file is compressed to the MP3 format.

Multi Party Computation (MPC)

MPC allows for multiple participants to compute a function of their inputs in a privacy-preserving way. Applying MPC to secret sharing allows for secret shares to be distributed amongst participants, to perform decentralized computation of these inputs and generate the secret-shared output without reconstructing the secret on a single device.


A special type of digital signature scheme where there can be multiple signers for a single ditigal signature. A multi-signature transaction is only valid if it is signed by a set threshold of participants, just like some legal documents require a co-signer. Multi-signature schemes enable more advanced smart contracts and Layer 2 scalability solutions. They are also particularly important for digital asset custody.


A mechanism by which a secret (or private key) is split and distributed across different participants in a way that each participant holds a share of that secret. Individual shares cannot be used to reconstruct the secret. To reconstruct the secret a pre-defined number (or threshold) of shares needs to be combined.


Multisigs are smart contract wallets that custody assets. They have embedded logic that broadcasts transactions once they have received sufficient signatures. For example, a multisig may need 2-of-3 keys to sign a transaction before broadcasting it to the blockchain.

For those familiar with traditional corporate governance, this is similar to requiring multiple signatories to approve a company resolution before anything important can be executed. Multisigs have become a critical piece of infrastructure, facilitating trustless collaboration for asset management for multi-billion dollar DeFi protocols, bridges, investment DAOs, funds, and even individuals.

Muti-Party Computation

Secure Multi-Party Computation (SMPC) is a subset of cryptography that enables functions to compute in a distributed system across multiple parties, without sharing data among other network participants. SMPC allows nodes within a network to jointly compute a function while keeping the inputs private from other nodes within the network. The process is one of many methods in distributed computing that allows for privacy and security in a blockchain environment.


Native Tokens

A DAOs own governance token. Often considered part of their treasury.

Network Baseline Model

The Network Baseline Model is Filecoin’s schedule for minting tokens, which is tied to growth in the protocol’s storage capacity. While tokens are only minted via block rewards, 70% of rewards are distributed in proportion with the growth of the total storage capacity of the network. The remaining 30% of rewards are distributed according to an exponential decay model, in which block rewards are greatest at the protocol’s inception and diminish over time.

NFT Appraisals

Appraisal where a third-party is paid a fee or utilized to estimate the market value of the asset

NFT Finance

NFT Finance is an emerging sector that ushers in DeFi-type products for NFTs. The creation of credit markets for NFTs adds a new utility layer for them beyond their primary use cases, bringing them closer to becoming a proper, investable asset class. Sub-sectors within NFT finance include Lending/Borrowing, Derivatives, Pricing, Rental, Buy Now Pay Later, Fractionalization, Liquidity protocols, and Analytics.

A brief market sizing analysis of NFT finance estimates it to be approximately $0.2B (according to research by NFTfi in Feb. 2022). This is just a tiny fraction (<0.5%) of the total NFT market size and shows that there is a lot of room for growth.n

NFT Fractionalization

Splitting of an NFT into multiple smaller parts which each provide partial ownership rights. Sellers can parts of an NFT to buyers

NFT Marketplace Aggregator

NFT Marketplace Aggregators allow users to optimize their experience in discovering and buying NFTs across different marketplaces from a single interface.

NFT Rental

With NFT rentals, borrowers pay a fee to gain access to an NFT for a specified time period. The borrower typically needs to put up some collateral, although some projects are experimenting with non-collateralized renting. NFT rental is particularly interesting for NFTs that have demand for their utility, such as game assets, virtual land, or membership passes. reNFT and UnitBox DAO are two examples of NFT rental platforms.

NFT Wash Trading

NFT Washing trading is when the wallet address of the seller and buyer are both in control of the same individual, where the NFT sold returns to the seller’s address and/or the seller and buyer aim to manipulate market participants or marketplaces by changing the value of an NFT or the volume of an NFT collection to take advantage of trading rewards



NFT-Driven Governance

NFT-driven governance is a model where NFTs are used to represent governance rights within a DAO instead of fungible tokens. 1 NFT = 1 vote. This enables greater transparency around ownership and token unlocks. With NFTs, it is much harder to hide allegiances and intentions during voting since it typically involves unique NFTs that do not change hands often. Each NFT’s voting history is visible to all. Nouns DAO is the pioneer of the NFT-driven governance model.



On-chain data availability (OCDA) is a hybrid approach to data storage that allows users to choose if their data is stored on-chain or off-chain. OCDA was launched as one of the newly developed features with the release of Loopring 3.0. While this feature is off, and data is stored on-chain, the network achieves 2,025 transactions per second (TPS). However, if OCDA is on and data is stored off-chain (by using Validium mode), throughput can reach 16,400 TPS. However, at that speed, network security is that of a consortium blockchain and not always ideal. These dynamic scalability solutions are known as volitions. In short, OCDA and zk-Rollup technology work together to allow Loopring 3.0 to become comparable to non-custodial exchanges by matching their centralized, custodial competitors’ performance by facilitating very fast asset exchange and transaction times.

Off Chain Governance

Off-chain governance supports on-chain governance by providing a process for gathering feedback prior to proposing on-chain votes and making decisions that don’t require on-chain voting.

Off-chain Transaction

Transactions that occur off a given blockchain network, that may be later reported or batched together before submitted to the main chain.

On Chain Governance

Is a term used to describe governance protocols built into a blockchain. Usually done through staking, voting and funding mechanisms. These protocols can vote on new upgrades or on how to spend their funding.

On-Chain Active Users
There is a common misconception between active users and on-chain active users. The latter represents wallet interactions within a gaming project’s smart contract(s), i.e; every time a user signs a wallet request. These interactions can include:
  • Staking
  • Token trading
  • The deposit or withdrawal of tokens
  • Interacting with game contracts on-chain e.g. sending characters to battle

It is possible for one player to own multiple wallets and NFTs to expand their on-chain footprint. This often happens where there are gameplay incentives, and thus the data might become inflated. Here is a simple example using a game that requires players to own one NFT and sign a wallet request before being allowed to start playing:

  • Player 1 owns one NFT and plays the game daily using his/her personal wallet. Every day they sign in, accept the wallet request, and start playing.
  • Player 2 owns ten NFTs and holds them in ten separate wallets. Every day they sign in, accept the wallet request for each individual wallet, and start playing.

In this scenario, the on-chain data would suggest that there are eleven daily active players when in fact, there are only two. You can imagine how this gets more complicated when you factor in multiple daily wallet interactions for different activities, such as token trading, token withdrawals, NFT renting, or bot accounts.

On-chain Transaction

Transactions that are recorded on the blockchain itself and shared with all of the participants are done on-chain.

Open Interest

Open interest is the total number of outstanding derivative contracts (such as options or futures) that have not been settled yet.

Optimal Utilization Rate

The Optimal Utilization Rate refers to the utilization rate where the kink of the interest rate curve lies. Before the optimal utilization rate, the interest rate increases gently until a certain point (the kink). After this point, the interest rate rises sharply. It’s the ideal utilization rate because it keeps the cost of capital reasonable for borrowers while lenders get paid a healthy coupon.

Optimistic Rollup

In an Optimistic Rollup, the new state root is published by operator(s) without being checked every time by the Rollup smart contract. Instead, everybody hopes that the state transition is correct. However, if an incorrect state transition is published, other operators or users (who MUST observe what’s going on in the L1 Rollup contract, executing every single transaction) will be able to point to the invalid transaction and revert the incorrect block, slashing malicious operators.


Options contracts offer the buyer the opportunity to buy or sell (depending on the contract they hold) the underlying asset. Unlike futures options contracts do not need to be exercised. They do still have a specific expiration date.

Oracle-Based DEX

Oracle-Based DEXs are trading venues that rely on an oracle price feed to price assets in the exchange. Market pricing for assets is “imported” from external venues rather than deduced via organic price discovery. Protocols like GMX, Mycelium and MUX use this type of pricing to enable zero-slippage trades. However, as these price feeds are secondary data sources, there are risks associated with this, such as oracle front-running and price manipulation of assets with low liquidity.


An oracle is a bridge between the blockchain and the real world. They act as on-chain APIs that can be queried for information and used in smart contracts.


Ordinal is the term used for the data inscribed to a sat on Bitcoin. They have some similarities to smart contract NFTs but many differences as well. Ordinals are similar in that they are non-fungible and, so far, have mainly been used for JPEGs and PFPs.

There are a few critical differences between ordinals and NFTs:

  1. They are inscribed to a specific sat on Bitcoin forever. If the sat moves, so do the inscriptions.
  2. They are ordered. There is a 1st ordinal and a 10,000th ordinal.
  3. Ordinals are inscribed to Bitcoin, one at a time, not en-masse through a smart contract.

Ordinals are also sometimes called an inscription.

Ordinal Theory

Ordinal Theory is a novel concept developed by ex-Bitcoin core contributor Casey Rodarmor that ascribes a unique, ordered numerical identifier to each sat (lowest denomination of bitcoin) on the Bitcoin blockchain. Applying a unique number to each sat allows them to be tracked and transferred individually.

Ordered sats can be shown as an integer, decimal, degree, percentile, or with an alphanumeric name.

As each sat has an identifier with Ordinal Theory, some sats will have different providence than others.

Outcome Based Resource Allocation

Created by 1kx Network, and proposed in the SafeDAO forum in Sept. 2022, Outcomes Based Resource Allocation [OBRA] is a novel model for allocating DAO resources. Broadly, this approach attempts to minimize resource allocation (spending) to governance goals, strategy, initiatives, and a review process.

Overcollateralized Loans

Loans that require borrowers to provide collateral larger in value than the loan.


The Optimistic Virtual Machine (OVM) is a virtual machine (VM) created by the Optimism blockchain team to help scale Ethereum through Optimistic Rollup (OR) technology. The OVM was designed to make Ethereum transactions faster and cheaper; it also provides a framework for developers to scale smart contracts with its Ethereum Virtual Machine (EVM) Layer-2 compatibility. This technology has been implemented on the Uniswap decentralized exchange (DEX) in partnership with Optimism.


P2P Lending

Peer-to-Peer (P2P) lending enables an individual to obtain a loan directly from another individual, without the need of an intermediary. In crypto, smart contracts automatically execute loans as per the agreed terms, which allows for trustless transactions between parties.

P2P Network

A P2P (Peer-to-Peer) network is a type of networking architecture where nodes/devices in the network connect to one another, without passing through a higher privileged server. This model stands in contrast to the more popular client-server model in that it is more decentralized, resistant to surveillance, and hard to censor. Examples of a P2P network include things like Bitcoin, IPFS, and torrenting platforms.

P2Pool Lending

Peer-to-Pool (P2P) lending enables an individual to obtain a loan from a liquidity pool made up of individual depositors using an intermediating protocol such as Aave. Smart contracts  automatically execute a loan at the prevailing interest rate (given there is ample liquidity), which enables trustless transactions between parties.

Pair Trade

A pair trade is an investment strategy that involves buying and selling two related financial instruments simultaneously in order to profit from the difference in their prices. The goal of a pair trade is to take advantage of pricing discrepancies between two similar assets, while minimizing exposure to overall market movements.

In a typical pair trade, the investor identifies two assets that have a high correlation with each other, such as two stocks in the same industry or two exchange-traded funds (ETFs) tracking the same market sector. The investor then takes a long position in one of the assets and a short position in the other, with the expectation that the long position will increase in value while the short position will decrease in value.

The advantage of a pair trade is that it is designed to reduce overall market risk since the strategy is based on the relative performance of two assets rather than the broader market. Pair trades can be executed using a variety of financial instruments, including stocks, options, futures contracts, and ETFs.


Parachains are Polkadot-based independent blockchains that connect to and run off of the Polkadot network’s main Relay Chain Parachains can also be considered shards (with entire blockchains inside them). Parachains run in parallel to the Relay Chan and process transactions through parallelization by using sharding and exhibit extremely fast transaction times. Parachains are able to host their own blockchain-based tokenized assets within their independent network and control their own governance processes by paying to use a parachain slot by attaching to the main Relay Chain. Parachains also run on the Rococo Relay Chain on the Kusama network (both the Polkadot and Kusama networks have the capacity to operate 100 parachains via their corresponding Relay Chain).

Parametric Insurance

Parametric insurance is a type of insurance contract that protects against the occurrence of a predefined event, rather than against actual losses. For example, flood insurance would cover a home for damages from floods. Parametric insurance could involve a payment to the policyholder in the event of a flood taking place in a defined geographical area, regardless of monetary damages. This simplified approach to insurance can be implemented in blockchain applications through the use of oracles such as Chainlink.

Parimutuel Markets

Parimutuel betting, also known as pool-betting, is a unique form of betting without fixed odds. Wagers are placed against other participants in a PVP fashion, rather than against a bookmaker. All wagers go into a pool, which is shared by those who make the correct prediction. Payouts are a function of the number of participants and the percentage of correct wagers. Predicting payouts in advance can be difficult. Due ability of this architecture to protect the house, parimutuel markets are promising for DeFi applications. Thales and Hxro are two examples of projects that are implementing parimutuel markets.


Proposal that is passed through voting, but still awaiting vetting or execution.


The PCE stands for Personal Consumption Expenditures.

It is a measure of the total amount of money spent by households on goods and services. The PCE is calculated by adding up the prices of all the goods and services purchased by households in a given period and adjusting for changes in quality and quantity.

The PCE is similar to the CPI (Consumer Price Index) in that it is used to measure inflation. However, the PCE is considered a more comprehensive measure of inflation because it takes into account changes in the composition of household spending over time. For example, if households switch from buying more expensive products to cheaper ones, the PCE will reflect this change, while the CPI may not.

The PCE is also used by the US Federal Reserve as its preferred measure of inflation when setting monetary policy. The Fed typically aims to keep inflation at around 2% per year, as measured by the PCE.

Peer-to-Peer NFT Lending

In Peer-to-Peer NFT lending, NFT owners can pledge their NFTs as collateral to obtain loans directly from another individual. Borrowers can list NFTs that they want to borrow against. Lenders place bids by offering loan terms — loan amount, loan duration, and interest rate. When the borrower accepts an offer, the NFT is transferred to an escrow contract, and the loan amount is dispensed from the lender to the borrower. The borrower can repay the loan plus interest at any time before the expiry date to get back the NFT. If the loan is not repaid on time (a default), the lender can foreclose on the loan and obtain the escrowed NFT.

Peer-to-Peer lending products match borrowers and lenders, functioning as a middleman. NFTFi is the oldest and leading platform for Peer-to-Peer NFT Lending.

Peer-to-Pool NFT Lending

In Peer-to-Pool NFT lending, NFT owners obtain loans from a liquidity pool instead of an individual. It is a newer and yet-to-be-proven concept. In this model, lending and borrowing demand can be matched with a high efficiency level. Liquidity is immediate: there is no need to make or wait for bids. . There are a variety of design approaches in peer-to-pool lending, particularly with how the liquidity pool functions. In some designs, loan parameters can be algorithmically adjusted to optimize outcomes for borrowers and lenders, or set by the pool owners.

BendDAO has the most considerable liquidity for NFT peer-to-peer lending today.

Peg Stability Module

The Peg Stability Module (PSM) is a component of a stablecoin protocol that allows users to swap the native stablecoin for other protocol-accepted stablecoins at a 1:1 rate. PSM’s allow users to swap between stablecoins at a fixed rate to help the native stablecoin remain pegged to the dollar. This is currently used by Maker and Hubble.

Peg Zone

A peg-zone is a mechanism employed by the Cosmos ecosystem to allow blockchain protocols – such as Bitcoin and Ethereum – which can lack settlement finality (for example because they employ probabilistic finality), to interoperate with the Cosmos Network. Normally, Cosmos makes use of the Inter-Blockchain Communication protocol (IBC) to interoperate with other chains. However, IBC can only be used correctly if both the starting and destination chains are able to achieve settlement finality. To solve this problem, peg-zones were built to serve as a translator zone or ‘finality gadget’. Peg-zones generally employ a 2-way peg, meaning that assets can be sent between chains in both directions.


The permaweb is a human-readable layer built on top of the Arweave protocol. The permaweb allows you to view the collection of websites and decentralized applications (dApps) hosted by Arweave. The permaweb is intended to be visually similar to the traditional web and can be accessed via traditional web browsers.

Permissioned relative majority

Relative majority (ie, where you just compare total number of for and against votes) isn’t a viable governance option for DAOs due to the ease with which they can be attacked (1 person can easily drain the DAO’s funds while others aren’t looking!). However, Moloch DAOs have a nice little feature to prevent this: proposals need to be sponsored by DAO members in order to be voted on, which adds a nice security buffer.

Perpetual Future

Perpetual Futures “Perps” are the most common form of leverage within crypto. Perps are futures contracts that never expire and instead use a “funding rate” to stay anchored to spot prices. When the perp contract price trades above spot prices then longs must pay shorts a funding fee, and vice versa when contract prices are below spot. 

Perpetual Pools

Perpetual Pools are a feature utilizing AMMs launched by Tracer (now Mycelium). They form the derivative structure for leveraged tokens, facilitating the transfer of value between the long and short sides of the pool. The value transfer is determined by a transfer function known as Power Leverage, which can obtain its input from any price or data feed.  The Power Leverage function acts as a rebalancing mechanism, not too dissimilar from how a funding rate is used in perpetual swaps. Leveraged Tokens become the ERC-20 representation of perpetual pool ownership. The pools ensure that the long (L-token) and short (S-token) leverage tokens are fully collateralized and non-liquidatable. The perpetual pool design is immune to slippage, transaction costs, and removes the need for funding. This is possible because no underlying asset is purchased or sold, the pool simply shifts the imbalance between longs and shorts and facilitates the minting of leverage tokens.


Profile Picture – typically used as avatars or social media profile photos


Phygital refers to items that exist in both digital and physical form, tied together by an NFT. In essence, a digital twin. Demand for these will grow as we juggle our real-life and online identities.

An example of a phygital item is the Nike AR Hoodie. Clone X NFT owners can “forge” and claim a physical hoodie, while their Clone X avatars can wear the digital version in several virtual environments. Each physical hoodie contains an NFC chip which can be used to link and authenticate the item with the NFT.

Plasma Chain

A plasma chain is an off-chain, Layer-2 scaling solution. A plasma chain is simply a specific type of non-custodial sidechain through which users may withdraw their funds and revert back to the mainchain in the case of errors or security breaches.

Player Liquidity

Guilds will often coordinate their community through limited-time competitions or quest, thus acting as a source of player liquidity for up-and-coming games.


Playlists are collections of songs by one or more artists that are tied together by some concept, which could be just about anything—it could be the mood they create or some common thread between the artists who created the songs or even just a specific lyrical theme.


Pods are Orca Protocol’s answer to the scaling problems that DAOs face. Pods are small working groups, usually centered around one expertise.

Point of Control

The price level for the time period with the highest traded volume.

Pool Cover

On Maple Finance, lending pools mitigate risk by having Pool Cover made out of MPL-USDC Balance Pool Tokens (BPTs) added by stakers. The value of Pool Cover held provides a buffer for lending capital in the pool in the event that borrowers default. If a borrower defaults the Pool Cover will be liquidated to cover the default amount before any loss is incurred by lenders in the pool. As a reward for putting their capital at risk, stakers earn a percentage of the interest generated by the pool and MPL rewards.

Pool Cover Providers

On Maple Finance, Pool Cover Providers are participants who provide Pool Cover by staking MPL tokens into a Balancer Pools as first loss capital. These tokens will be first to be liquidated in the event a Borrower defaults. Cover providers receive a percentage of the interest earned by the pool from borrowers and MPL staking rewards.

Pool Delegates

On Maple Finance, Pool Delegates are credible experts who launch and manage lending pools. They each develop their own investment strategy and underwriting process for determining creditworthy borrowers.


An alternative sybil control mechanism to Proof Of Work. The main idea is that participants can lock coins (their ‘stake’), and at particular intervals, the protocol randomly assigns the right to one of them to validate the next block. Typically, the probability of being chosen is proportional to the amount of coins – the more coins locked up, the higher the chances.

Power Claims

A better way to get convexity where a non-linear function can be applied for leveraged exposure

Power Perpetuals

Power perpetuals provide global options-like exposure without the need for either strikes or expiries, giving them the potential to consolidate much of options market liquidity into a single instrument.


Pre-saving in the streaming world is just like pre-ordering an album in the physical one; it’s how a fan indicates that they want information and digital access to new music the moment it is available.




The price-to-sales ration is a way of valuing a company by looking at its annual sales. P/S is calculated by taking a company’s market capitalization and dividing it by the company’s total sales or revenue over the past 12 months. The lower the P/S ration, the more attractive the investment and vice versa.

Price-to-Sales (P/S) Ratio

A price-to-sales ratio is a valuation method that compares a company or protocol’s market cap to its revenue (or sales). This ratio is found through dividing a protocols market cap by its total annual revenue. This is expressed in a multiple. For example, a protocol could have a P/S of 15x – meaning that the tokens trades at 15 times its revenue. In general, low P/S ratios are desirable as it could indicate the token is undervalued. High P/S ratios could suggest the token is overvalued.

P/S ratios are not a perfect tool as it does not account for debt or balance sheets, and is not suitable for comparing protocols/companies in different industries.

Priority Gas Auction (PGA)

Priority Gas Auctions (PGAs) are competitions between network participants for transaction prioritization. They compete by increasing bids for gas fees.

Private-Public Keypair

A private-public keypair is a core element of Public-key cryptography (PKC), a technology used to encrypt data and validate its authenticity. A keypair consists of two “keys”, one private and one public, which are mathematically linked so that you can derive the public key from the private key but not vice versa. For cryptocurrency transactions, the public key allows you to receive cryptocurrencies, while the private key is needed to prove that you are the owner of the cryptocurrency received in the transaction.


Proactive Automated Market Makers (PAMMs)

The key difference between Proactive Market Makers (PMMs) and conventional AMMs is their ability to change parameters such as pool ratios and price curves. This allows PAMMs to be adaptable to market conditions and flexible for different use cases.


The PMM pricing model uses dynamic slippage to encourage the market to constantly bring the pool back to equilibrium if an asset’s price skews too far in either direction. Unlike Uniswap v2, you don’t have to deposit both assets into the pool, LPs can choose to deposit only one of the assets. This can minimize impermanent loss, however, if inventory isn’t constantly brought back to equilibrium then LPs could result in permanent losses.

programmable NFTs

 “Programmable NFTs” are a new standard for Solana NFTs introduced by Metaplex to enable the enforcement of creator royalties. Programmable NFTs allow creators to decide which protocols their NFTs are allowed to interact with through the use of allow and deny lists. Creators can prevent their collections from trading on marketplaces that do not enable royalties.

Most marketplaces (including Magic Eden), wallets, and protocols support programmable NFTs. It will be the dominant standard for royalty enforcement on Solana. Metaplex began allowing NFT collections to upgrade to this new token standard on February 6th 2023.

Proof of Access

PoA is the consensus mechanism of the Arweave Protocol. In order to mine or verify a new block, miners must provide cryptographic proof that they have access to a recall block, which is a block from earlier in the blockweave’s history. For this reason, Arweave’s consensus algorithm is called Proof of Access (PoA), and is a variation of a Proof-of-Work (PoW) algorithm. PoA is intended to incentivize long-term data storage because miners must access older, random blocks from the blockweave’s history in order to mine new blocks and receive mining rewards.

Proof Of Coverage

Proof of Coverage (PoC) is a consensus mechanism employed by the Helium Network. As a variation of Proof of Work (PoW), PoC relies on mining to achieve network consensus. However, miners on the Helium Network – known as Hotspots – double as wireless internet access points for Internet of Things (IoT) devices. As such, PoC incorporates nuanced mechanisms to track the participation of nodes – or Hotspots – and their continued provision of services.

Proof of Replication

Proof of Replication (PoRep) is one of the consensus mechanisms used by the Filecoin network. Specifically, it is a process through which a storage miner proves to the blockchain protocol that it has created a distinct copy of a specific piece of data on the network’s behalf. This process is verified by the network through zk-SNARK cryptographic proof technology.

Proof of Spacetime

Proof of Spacetime (PoSpacetime) is a consensus mechanism utilized by the Filecoin network. It allows the blockchain to prove its capacity, and in doing so, it can cryptographically verify that the entire file is being stored in an unaltered fashion for an agreed-upon time frame. Proof of Spacetime is made up of two distinct subsets: 1.) Window Proof of Spacetime (WindowPoSpacetime) and 2.) Winning Proof of Spacetime (WinningPoSpacetime).

Proof of Storage

Proof of Storage (PoStorage) is a consensus algorithm used by the Filecoin network to prove that network participants are indeed providing the specified amount of storage that they claim to be. This storage space is verified by the network through zk-SNARK cryptographic proof technology.

Prop House

Prop House is an experimental new approach to capital deployment: an auction of ETH where the bids placed are proposals that anyone can submit. At the end of each auction, Noun owners & appointed communities vote on which proposal gets funded. This promotes competition & prioritization of proposals, rather than the traditional Yes-No approach. Prop House minimizes friction for proposals, allowing the proliferation of new ideas not limited to Noun owners, and making it easier for anyone to launch an idea. Prop House represents a more scalable way for capital deployment since it does not require a full vote by Nouns members who may not have time to go through every proposal. Instead, part of the responsibility is delegated to various Nounish communities.


A proposal is executable code that modifies the governance contract or treasury and how they work.

Proposal Power

The proposal power that gives access to creating and sustaining a proposal.


Proposed proposal, usually live for voting. First part of an execution stream used by some DAOs

Proposer-Builder Separation

Consensus nodes (miners or validators) traditionally would serve two roles. They build the actual block, then they propose it to other consensus nodes who validate it. Miners “vote” by building on top of the previous block, and validators vote directly on blocks as valid or invalid.

Proposer-Builder Separation (PBS) splits these up – it explicitly creates a new builder role. Specialized builders will put together blocks and bid for proposers (validators) to select their block. This isolates the centralizing forces of MEV to the builder role, away from validators.

MEV-Boost is an early out-of-protocol iteration of PBS. Eventually, PBS will be enshrined into the Ethereum protocol which will run the auction process internally.

Protected Collateral
Protected Collateral is a feature on Euler Finance which allows collateral to be deposited (to borrow against), but not made available for lending. It earns a user no interest, but is free from the risk of borrowers defaulting. It can always be withdrawn instantly, and helps protect against borrowers using tokens to influence governance decisions.
Proto-danksharding (EIP-4844)

Proto-danksharding is a potential Ethereum upgrade which significantly improves Ethereum’s data availability layer. It’s a stepping stone solution which is forward-compatible with the full danksharding specification. It provides meaningfully more data availability bandwidth to rollups compared to today, but it is not as scalable as the full danksharding proposal.

Protocol Owned Builder

Protocol-owned builder (PoB) refers to a protocol that has a built-in block builder, as opposed to relying on off-chain builders. This functionality is best suited for app chains looking to retain control of their MEV. Under PoB, blocks are built communally by every validator, with results enforced by consensus. PoB also allows governance to have full control over block building and how MEV is distributed.

Protocol Owned Liquidity

Protocol Owned Liquidity (POL) refers to secondary market liquidity of a protocol’s native token that is owned by a protocol’s DAO treasury. This is opposed to “external liquidity,” owned by token holders.

Protocol Policies

These policies govern the overall behaviour of the protocol and the entities belonging to it. They regulate specific aspects of the protocol related to safety, economics and expansion.


ProtoRev is a backrunning module developed through a collaboration between the Skip and Osmosis teams that allows Osmosis to capture backrun MEV on their exchange. Backrunning is when liquidity pools become imbalanced, and as a result, a risk-free profit opens up. ProtoRev transactions are prioritized (they run outside of the regular block-building process and cannot be frontrun, reordered, or left out) and the protocol even has the ability to flash mint whatever tokens necessary to complete the transactions.


Provenance is the history of ownership behind an item. This includes its origin and a record of those who have owned or interacted with it previously on the blockchain. This term is often used with reference to art. The ability to easily track the provenance of an NFT is one of the key advantages of the technology, allowing users to identify the origin and verify the authenticity of artwork easily on-chain

Public Key Infrastructure (PKI)

Public Key Infrastructure (PKI) is a group of tools that a network uses for the creation and management of keys for encryption. There are two keys in this system: private and public keys. PKI is used throughout the internet for secure communication and information transfers, as well as for common protocols like email.

Public Raffle

Public raffles are a lottery-like distribution mechanism for NFTs. It allows everyone to sign up for the raffle over some time, and winners are randomly selected among all the participants. Winners get the opportunity to mint the NFT first. Public raffles give everyone a fair chance to win.

PREMINT is one platform that supports public raffles for NFT launches.

Puell Multiple

The Puell Multiple is defined as the ratio between the daily issuance of BTC (in USD) divided by the 365-day moving average of the daily issuance of BTC (in USD). In other words, the Puell Multiple compares the difference between short-term BTC miner revenue to that of the longer-term revenue trend. A lower score equates to lower profit for miners and vice versa. This indicator has proven itself to be one of the most reliable macro-bottoming signals for BTC. Historically, values under that of .50 are considered to be indications that a bottom is in/near.

Put Option

An option to sell assets at an agreed price on or before a particular date.


Quadratic Voting

Quadratic voting is a collective decision-making procedure which involves individuals allocating votes to express the degree of their preferences, rather than just the direction of their preferences

Quantitative Easing

Quantitative easing (QE) is a form of monetary policy in which a central bank, like the U.S. Federal Reserve, increases the size of its balance sheet by purchasing securities from the open market.

QE is a tool central banks use to increase the money supply and lower interest rates. A central bank pursuing QE usually buys government bonds, corporate bonds, or mortgage-backed securities. QE typically lowers borrowing costs, encourages lending and investment, and stimulates economic growth.

Quantitative Tightening

Quantitative tightening (QT) refers to monetary policies that reduce the Federal Reserve’s balance sheet.

QT occurs when the Fed sells Treasuries (government bonds) into the market or allows them to mature and ‘run off’ its balance sheet. This process removes liquidity from financial markets and is usually associated with higher borrowing costs and slower economic growth.

Qui tacet consentire videtur

Who is silent is seen to agree. Rule of Non-opposition.


The purpose of a quorum is to ensure that the only measure that pass have adequate voter participation.

Quorum Voting

Quorum voting requires a certain threshold of voters in order for a proposal to pass (for example: 60% quorum, which means 60% of voting power needs to vote). Once this threshold has been met, whichever decision has more votes wins. Without reaching the quorum threshold, proposals fail.



Ragequit is the process in which a member of the DAO decides to opt out of the DAO for any given reason.

Ranked Choice Voting

A ranked-choice voting system (RCV) is an electoral system in which voters rank candidates by preference on their ballots

Real-world assets (RWAs)

Real-world assets (RWAs) are tangible assets or financial primitives  like real estate, equities, securities, corporate bonds, and government treasuries that can also be brought on-chain through tokenization.

Recall Block

In the Arweave protocol, the recall block is the block from the earlier history of the blockweave. In Arweave’s blockweave data structure, each block is linked to both the recall block and the previous block in the chain. Additionally, miners must prove that they have access to the recall block in order to add new blocks to the blockweave.


A recession is a significant, pervasive, and persistent decline in economic activity. Economists measure a recession’s length from the prior expansion’s peak to the downturn’s trough. Recessions typically produce declines in economic output, consumer demand, and employment.


Reflexivity is a concept introduced by the investor and financial expert George Soros, which refers to the idea that the relationship between an individual’s beliefs and the reality they are observing is a two-way street.

In other words, our beliefs and expectations about the world can actually influence the way the world behaves, rather than just being passive reflections of it.

Soros believes that this concept is particularly relevant to financial markets, which he argues are not always efficient or rational, but are instead influenced by the beliefs and actions of the people participating in them. This feedback loop between beliefs and reality can lead to self-reinforcing cycles of behavior in financial markets, where rising prices lead to more optimistic beliefs, which in turn lead to further price increases, and so on. However, these cycles can also be fragile and prone to sudden reversals if new information or events cause beliefs to shift in the opposite direction.


The relayer is responsible for forwarding cross-chain messages from the egress in chain A to chain B’s egress.


Reputation is the subjective qualitative belief a person has regarding a brand, person, company, product, service. In this case, it can be either the DAOs reputation or the persons reputation within the DAO or broader ecosystem.

Reputational Identity

Identity in Web3 can be approached in various ways, all of which can be combined to form the true picture of an individual. Some of these pieces of information include:

  • On-chain transaction history

  • Asset ownership

  • Biometric verification (bringing off-chain identity on-chain)

  • Web3 social graphs

Reputational identity is a subset of Decentralized Identity. It relies on track records and accomplishments to represent an individual’s digital identity. Imagine a Web3 LinkedIn-type resume.

Reserve Factor

The reserve factor allocates a share of the protocol’s interests to a collector contract as reserve for the ecosystem. The Reserve Factor is also a risk premium and so it is calibrated based on the overall risk of the asset.

Retrieval Miner

Retrieval miners, along with storage miners, are the two key components that make up Filecoin’s decentralized market structure. The Filecoin network benefits three main groups of users: (1) Retrieval miners who receive tokens by serving data, (2) storage miners, who receive tokens by providing storage, and (3) clients who pay to store and retrieve data. The retrieval market is built off-chain, and is powered by retrieval miners who help transmit data back and forth.

Retroactive Airdrops

Delivery of tokens to current or former users’ wallets to spread awareness, build ownership, or reward early users retroactively. The retroactive airdrop is a tool for increasing both token distribution and governance participation from active users.


Retroactive Public Goods Funding is Optimism’s approach to reward impactful projects that operate as public goods. Funding is retroactively distributed based on governance from Citizens’ House.

Reverse Repo Program (RRP)

The Fed’s Reverse Repo Program (RRP) is a monetary policy tool that allows eligible counterparties, such as money market funds, to lend funds to the Federal Reserve overnight in exchange for U.S. Treasury securities held by the Fed.

The RRP is designed to help the Fed control short-term interest rates by draining excess liquidity from the banking system and providing an alternative investment option for cash-rich investors. In the RRP, the counterparties deposit funds in the Fed’s account at an interest rate that is determined by the Fed, which currently serves as the floor for short-term interest rates. The counterparties receive the Treasury securities as collateral, which they can hold until the next business day when the Fed repurchases the securities and returns the funds to the counterparties with interest.

The RRP is considered to be a safe and low-risk investment option, as the Treasury securities held by the Fed are backed by the full faith and credit of the U.S. government.

RIAA certificate recquirements

The Recording Industry Association of America (RIAA) has different certifications for what kind of numbers make a release gold, platinum, multi-platinum, and diamond. An album or song has to hit a certain number of units to obtain any of those certifications. Gold, for example, is 500,000 units. But one stream doesn’t equal one unit. According to the RIAA website regarding Album Awards, each permanent digital or physical album sale counts as one unit, ten permanent track downloads from the album count as one unit, and 1,500 on-demand audio and/or video streams from the album count as one unit. For Digital Single Awards, each permanent digital download counts as one unit, and 150 on-demand audio or video streams count as one unit.

RIAA certificate recquirements

The Recording Industry Association of America (RIAA) has different certifications for what kind of numbers make a release gold, platinum, multi-platinum, and diamond. An album or song has to hit a certain number of units to obtain any of those certifications. Gold, for example, is 500,000 units. But one stream doesn’t equal one unit. According to the RIAA website regarding Album Awards, each permanent digital or physical album sale counts as one unit, ten permanent track downloads from the album count as one unit, and 1,500 on-demand audio and/or video streams from the album count as one unit. For Digital Single Awards, each permanent digital download counts as one unit, and 150 on-demand audio or video streams count as one unit.

Risk Free Value (RFV)

Risk Free Value, is the amount of funds the treasury guarantees to use for backing a reserve currency.

Risk Management

Volatility, price, and other market conditions necessitate continuous monitoring.

Risk Premia Harvesting

Risk premia harvesting is an investment strategy that involves systematically capturing the returns associated with specific risk factors or “premia” that are believed to generate excess returns over the long term. These risk factors can include factors such as value, momentum, quality, size, and low volatility.

The strategy involves investing in a diversified portfolio of assets that have exposure to these specific risk factors. By systematically harvesting the returns associated with these factors over time, the strategy seeks to generate excess returns compared to a traditional market-cap-weighted portfolio.

Role-Playing Game

Role-Playing Games (RPGs) refer to video games in which each player assumes the role of a character, generally in a fantasy or science fiction setting. These characters can often be separated by classes that have defining characteristics (e.g. warrior, wizard, etc.) and increase in power levels as well as skills and abilities as the player progresses through the storyline of the game.

Although they originated from popular tabletop games such as Dungeons & Dragons, modern examples of RPGs in the traditional gaming industry are Witcher 3, Elden Ring, and Pokemon Legends: Arceus.

Examples of up-and-coming crypto gaming RPGs include Illuvium and Embersword.


A Rollup is a Layer-2 scaling solution similar to Plasma: a single mainchain contract holds all funds and a succinct cryptographic commitment to a larger ‘sidechain’ state (usually a Merkle tree of accounts, balances and their states). The sidechain state is maintained by users and operators off-chain, without reliance on L1 storage (which is the source of the biggest scalability win). What differentiates Rollup from Plasma is that it solves Plasma’s huge problem – data availability – by publishing some data for each transaction via the L1 network (in Ethereum specifically tx CALLDATA is used for this purpose). Thousands of transactions can thus be bundled up (rolled up) together in a single Rollup block. While this approach grows strictly linear in costs (O(n) of the number of transactions), it provides a practical 100-fold improvement in throughput, because CALLDATA is way cheaper than L1 storage and computation.


Fees that are earned by an NFT creator when the NFT is resold. This can be set as a percentage of sale price on NFT marketplaces such as OpenSea

RSS feed

An RSS feed is a format for syndicating web content. RSS feeds are created in a standard XML format that makes them compatible with a variety of readers and aggregators that readers can subscribe to.


Safety Module

Also known as the Protocol Safety Module. Component in charge of shielding the protocol from insolvency, protecting the liquidity providers from risks resulting in loss of funds, such as liquidation and smart contract risk.

Sandwich Attack

Combination of front running and back running. A bot front runs you before your trade drives up the price, then immediately sells for a risk free profit right after (slippage plays a big role here).

Schnorr Signatures

Schnorr-Signed ElGamal Encryption is an encryption mechanism commonly employed by various types of public-key cryptography (PKC) systems that blockchains and other types of networks employ. The framework is designed to hide sensitive data using Schnorr signature technology and is characterized by Diffie-Hellman key exchange and other complex mechanisms. The standardized Digital Signature Algorithm (DSA) that most blockchain systems are based on is a variant of the Schnorr and ElGamal signature frameworks. The Schnorr-Signed ElGamal Encryption scheme is named after its Egyptian creator Taher Elgamal, who proposed the solution in 1985.


Generally bots that scan the public mempool for MEV opportunities, although they can also be regular users.

Secret Shared Validators (SSV)

Secret Shared Validators (SSV) is the first secure and robust way to split a validator key for ETH staking between non-trusting nodes, or operators. The validator key is split in such a way that no operator must trust the other to operate, a certain amount can go offline without affecting network performance, and no operator can take unilateral control of the network.

Secured Lending

Securing lending is when the borrower is required to give the lender collateral as a form of insurance against defaulting on the loan.

Security Budget

The security budget is the incentive that a blockchain pays to miners or validators to secure the chain. This often comprises two parts: the fees and block rewards.


A financial term referring to the fulfillment of a contract and the physical delivery of a promised security or intererst.


SETTs are vaults where users can deposit their assets to earn a yield generated on strategies that follow opportunities presented across different DeFi protocols. After depositing, the smart contract puts those assets to work by executing the selected strategy for the particular sett the user deposited funds on.

Shanghai Upgrade

The Shanghai upgrade is the name given to the hard-fork of the Ethereum blockchain which, most notably, introduced the ability for validators to unstake their ETH and accrued rewards (EIP-4895).


Sharding is a scalability method that splits the database in multiple shards so that each shard contains a subset of the state. Its purpose is to distribute the network’s computational and storage across a broader set nodes, in order to increase the throughput and transaction speed.

Share DAO

Share-based DAOs are more permissioned, but still quite open. Any prospective members can submit a proposal to join the DAO, usually offering tribute of some value in the form of tokens or work. Shares represent direct voting power and ownership. Members can exit at anytime with their proportionate share of the treasury.

Shared Security

A term that applies to a family of technologies including optimistic rollups, zk-rollups, sharding, and interchain security.

Sharpe Ratio

The Sharpe Ratio is one of the most popular measures of return against risk. It quantifies an investment’s excess return per unit of risk. A higher Sharpe ratio implies a higher return for the same amount of risk. A negative Sharpe ratio implies a portfolio under-performed its benchmark.

The Sharpe Ratio is expressed as SR=(RpRf)/σp, where:

  • Rp = return of the portfolio
  • Rf = risk-free rate
  • σp = standard deviation of excess return

A selling position that enables a trader to profit if the price of an asset decreases.


A sidechain is a separate blockchain which runs in parallel to Ethereum and operates independently. It has its own consensus algorithm and is connected to Ethereum by a two-way bridge.

Signal Threads

Signal Threads measure the sentiment of the public governance community.


Slashing means that a significant part of the validator’s stake is removed. Any validator found to have broken the rules of a consensus mechanism will be slashed and ejected from the network.


In basic AMM mechanics, the available liquidity distributed across a wide price curve results in slippage within a given range of prices. If the token is only traded within a tight price range, (as buyers don’t want to overpay and sellers don’t want to undersell), then only a small share of the total liquidity is being used for trading. 

The effects of slippage and price impact are particularly evident in long-tail assets where the available liquidity is low. To minimize price impact, users have to trade at a venue with the deepest market or a pool with liquidity in the desired price range.

Slippage Protection

DEXes often indicate quoted prices that do not factor in slippage, as a result, users often find that the realized price can be drastically different to what a front-end estimates. It is not uncommon to see an option for slippage tolerance in a DEX’s transaction settings. Users should be aware, however, that setting a low slippage tolerance can often result in the trade failing. 

One method of slippage protection that 0x uses is to utilize slippage statistics to predict slippage outcomes for different trade sources, pairs, and sizes. The slippage statistics are incorporated into the trade routing algorithm to quote more accurately and execute at a better price. 

Smart Contract

Smart contracts are programs whose terms are recorded in computer code. While they often contain agreements or sets of actions between parties that emulate a traditional legal contract, they are not, in and of themselves, legal documents. Smart contracts are automated actions that can be coded and executed once a set of conditions is met, and are the dominant form of programming on the Ethereum Virtual Machine.

Smart Contract Risk

Smart contract risk focuses on the technical security of a currency based on its underlying code.

Smart Contracts

a smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.


Snapshot is a simple voting interface that allows users to signal sentiment off-chain. Votes on snapshot are weighted by the number of tokens an address votes with.

Snowman Consensus Protocol

Snowman consensus is part of the Avalanche consensus family founded by Avalanche. The Contract Chain (C-Chain) on Avalanche implements the Snowman consensus protocol.

Social Tokens

Social tokens are digital tokens on a blockchain that allow creators to monetize experiences and services. Within NFTs, social tokens enable a verifiably-scarce digital asset that can be tied to an individual’s (or community’s) reputation and success. Social tokens represent and govern how influencers and creators transfer value to their communities. They have the potential to remove rent-seeking intermediaries involved in the value transfer.

Soft Fork

The term soft fork was introduced to distinguish this upgrade method from a “hard fork.” In practice, a soft fork is not a fork at all. A soft fork is a forward-compatible change to the consensus rules that allows non-upgraded clients to continue to operate in consensus with the new rules.

Soft Landing

A “soft landing” refers to when an economy enters an slowdown but avoids recession. A “soft landing” is the goal of a central bank when it enacts restrictive monetary policy measures (i.e. raising interest rates) to combat inflation.

A “soft landing” occurs when interest rates rise, the economy slows, but a severe downturn is averted and the economy is spared from significant pain.  A “soft landing” can be contrasted to a “hard landing” where the economy slows abruptly, causing significant economic damage and sometimes resulting in recession.

Soft Liquidation

A soft liquidation refers to the use of a dynamic close factor during liquidation. Soft liquidations are used on Euler Finance, where liquidators are allowed to repay up to the amount needed to bring a violator back out of violation (plus an additional safety factor). This means that borrowers who are only slightly in violation will often have much less than half their debts repaid during a liquidation, whilst borrowers who are heavily in violation will often have much more than half their debts repaid during a liquidation (their whole position might be closed in some circumstances).


The price difference between the lowest sell offer and the highest buy offer.


Squeeth is a new financial primitive launched by Opyn. It offers the ability to trade an index that tracks the price of ETH squared, and is built on the concept of “power perpetuals.” Like any other perpetual, Squeeth uses an index price and funding rate to ensure the contract trades close to equilibrium at all times. However, Squeeth is a tokenized perpetual that users can buy on Uniswap or by minting oSQTH against ETH.


The utility of such a primitive is wide-ranging. Squeeth can be used as a means of levering up on ETH, hedging options positions, hedging Uniswap V3 LP positions, and as a volatility oracle.


Higher upsides, lower downsides and asymmetric payoffs are Squeeth’s most defining features. Other advantages include no strikes, no expiry and no need to ‘roll’ positions, reducing the cost of gas and removing the loss in spread paid to market makers. Importantly, however, If you are long Squeeth, the normalization factor will reduce your oSQTH value over time. It is therefore important to note that holding Squeeth over extended periods during sideways and bear markets may cause a loss in ETH^2 exposure due to funding rates. Squeeth can be tracked on Opyn’s Squeeth Dashboard.


Read more about Squeeth in this article here.

Stability Pools

The Stability Pool is the first line of defense in maintaining system solvency. In the case of Liquity Protocol, LUSD holders commit capital upfront to the Stability Pool in order to “buy” liquidated ETH and offset bad debt. During a liquidation event, LUSD is taken from the Stability Pool and used to pay off an undercollateralized loan. The ETH collateral in the Vault is distributed proportionally amongst stability providers.

Stability Providers

In the case of Liquity Protocol, users who deposit LUSD into the Stability Pool are stability providers. Users are incentivized by LQTY rewards and liquidation proceeds. Stability providers participating pro rata with their pool deposits acquire collateral from liquidated positions at a significant discount. In general, stability providers will receive more ETH (in $ terms) than LUSD burned.

Stable Rates

A loan with a stable rate behaves like a fixed rate loan in the short term, but the rates can be rebalanced following sudden market changes in the medium/long term.


Staking cryptocurrencies is a process that involves locking your crypto assets to support a blockchain network and confirm transactions. Staking is also synonymously used to decribe locking your crypto assets and LP tokens with the protocol to earn rewards.

Staking Pool

Staking pools allow multiple stakeholders to combine tokens in a collective pool in order to secure the benefits held by a larger, collectivized network stake. By combining computational resources, the individual stakeholders who choose to participate in a staking pool aggregate their staking power to more effectively verify and validate new blocks, which consequently increases their chances of earning a portion of the resulting block rewards.

Staking Yield

Yield (block rewards and transactions fees) that accrues to tokens staked to secure the blockchain network.


The set of data that a blockchain network strictly needs to keep track of, and that represents data currently relevant to applications on the chain.

State Rent

State rent, also known as storage rent or state fees, requires users to prepay rent for storing data on the blockchain. The amount of rent paid is proportional to both the size of the data and the amount of time the data is stored on-chain; many different models of charging rent have been suggested with no clear winner. By making the user rather than the full node pay for the cost of state, this prevents state bloat by ensuring that unused information falls out of the state over time.

State Root

Ethereum, unlike Bitcoin, has the property that every block contains something called the ‘state root’: the root hash of a specialized kind of Merkle tree which stores the entire state of the system: all account balances, contract storage, contract code and account nonces are inside.

Stateless Organization

An organization, like a DAO, not tied to any particular state (government).

Statistical Arbitrage

Statistical arbitrage is a quantitative trading strategy that involves using statistical analysis and mathematical models to identify and exploit pricing discrepancies in financial markets. The goal of statistical arbitrage is to generate profits by buying undervalued assets and selling overvalued assets in order to take advantage of temporary price differences.

The strategy typically involves identifying two or more securities that are expected to move in tandem based on statistical analysis of historical price data. The trader then places simultaneous long and short positions on these securities, with the expectation that the undervalued asset will increase in value while the overvalued asset will decrease in value, resulting in a profit.

Stop Loss

A price level you can set on a position which will, once reached, close the position and prevent any further loss.

Storage Miner

The Filecoin protocol relies on storage miners to furnish its marketplace of decentralized cloud storage. Storage miners are essentially nodes that solve cryptographic proofs in order to verify storage across time. These nodes must use Filecoin tokens (FIL) as collateral to ensure that they uphold their contractual obligations, and in return earn additional FIL by storing data for clients on the network. Due to the design constraints imposed by Filecoin’s Proof-of-Replication (PoRep) and Proof-of-Spacetime (PoSpacetime) mechanisms, storage mining requires fairly powerful hardware to meet the network’s storage and algorithmic proof requirements.

Storage Node

The Storj network utilizes storage nodes to provide bandwidth to the network and store clients’ data in a secure, decentralized format. Anyone individual or entity with a stable internet connection and excess hard drive space and bandwidth can set up a storage node. Each month, node operators are compensated via STORJ tokens valued in USD based on current market rates.

Structured Products

Structured products are pre-packaged investments that normally include assets linked to one or more derivatives.


A SubDAO is a DAO created by, or spun out of, a parent DAO.


A subgraph is a specialized type of application programming interface (API) employed by The Graph indexing and querying platform. It is designed to create a global graph – via the Ethereum network – of some of the world’s most important public data, allowing software developers to use, index, and serve blockchain data in a cryptographically verifiable manner. Subgraphs help reduce the typically centralized structure of mainstream indexing servers, which often require significant engineering and hardware resources to achieve reasonably secure access to decentralized data.

Subgraph Manifest

A subgraph manifest is a subgraph description that allows subgraphs to autonomously learn what Ethereum data to index, as well as how to index it. Subgraph manifests can help form subgraphs – which after deployment can become a part of the network’s global graph of blockchain data. Often, subgraph manifests are part of the digital database (made up of many subgraphs) that defines what specific smart contracts a subgraph indexes, which events from the contracts are important, and how to map event data to entities that a Graph Node stores and generates queries around.


DAOs that operate independently and focus on specific tasks (development, marketing, etc.).


A subnetwork (subnet) is a separate blockchain protocol that is built to operate within a Layer-1 blockchain protocol (such as the Ethereum or Bitcoin network). It is quite common for there to be many subnetworks – up to hundreds, or even thousands in the future – that run in unison with and complement the parent chain. Subnetworks are commonly employed by various blockchain ecosystems in the industry, and all have different design parameters, depending on their individualized architecture and their proposed real world uses.


Substrate is a blockchain integration platform and application development framework that was designed by Parity Technologies, the creator of blockchain interoperability pioneer Polkadot. The purpose of Substrate is to help simplify the process of building dApps or independent blockchains that run on the Polkadot network. Substrate accomplishes this by offering a fully adaptable blockchain design framework that features software development in numerous languages, forkless upgradability, light-client architecture, and multifaceted development tools. As a result, Substrate is one of the most powerful components of the Polkadot ecosystem. However, blockchains on the Polkadot network do not need to be built with Substrate.

Summary of Economic Projections (SEP)

The Federal Reserve Summary of Economic Projections (SEP) is a quarterly report published by the Federal Reserve that provides an overview of the economic projections of the Federal Reserve Board members and Federal Reserve Bank presidents.

The SEP includes projections for various key economic indicators, such as GDP growth, inflation, and unemployment, over a three-year horizon and a longer-run period. It also includes projections for the appropriate path of the federal funds rate (“the dot plot”), which is the interest rate at which depository institutions lend and borrow reserves overnight with each other.

The SEP provides important insights into the thinking of the Federal Reserve policymakers, including their views on the state of the economy, the outlook for economic growth and inflation, and the appropriate stance of monetary policy. Financial market participants closely watch the SEP, as it can influence expectations for future monetary policy actions and can affect asset prices and interest rates.

Supply Zone

A Supply zone is a price area above the current price where there is strong selling interest. The zones are the periods of sideways price action that come before explosive price moves. When the price returns to this level, there is typically a reaction of sell orders getting filled and price moves down.

Surveillance Capitalism

First coined by Shoshana Zuboff, Surveillance Capitalism is the corporate practice of collecting and commodifying user data. This differs from government surveillance, which is less profit driven. Surveillance Capitalism initially stemmed from companies using the personal data of their users to create targeted ads. Today, surveillance and mass data collection are fundamental parts of the web2 experience, and are often hidden from the end user.

Sybil Attack

A Sybil attack is a kind of security threat on an online system where one person tries to take over the network by creating multiple accounts, nodes or computers. This can be as simple as one person creating multiple social media accounts. But in the world of cryptocurrencies, a more relevant example is where somebody runs multiple nodes on a blockchain network.

Sybil Resistance

Sybil Resistance is the measure of a networks ability to withstand Sybil attacks. Sybil attacks occur when an attacker creates numerous identities on a network and uses them to gain power or influence.

Synthetic Asset

Synthetic assets are digital cryptographic assets that represent commodities like gold and silver, stablecoins, fiat currencies, and similar financial instruments. In short, synthetic assets are tokenized versions of traditional asset types that are often less readily available to users who participate in the traditional financial sector. Synthetic assets can often represent derivatives contracts from underlying assets such as stocks, bonds, commodities, currencies, indices, and interest rates. This capability gives investors the opportunity to invest in traditional asset classes through unique decentralized finance (DeFi) instruments and their underlying protocols, thus increasing ease of use and lowering the barrier to entry for investing in the assets in question.

Synthetic Liquidity

Synthetic liquidity involves the creation of derivatives or synthetic instruments. The best example of this is Synthetix. In Synthetix, you can stake stable crypto assets as collateral and borrow a synthetic asset (usually sUSD) against it. Users are then able to execute trades with the use of the borrowed synthetic assets.

All of these assets are powered by Chainlink oracles, so their pricing is 100% dependent on external markets. Because prices of all synthetic assets are drawn from Chainlink price feeds, the protocol lets you swap to and fro with infinite liquidity and zero slippage. This depth of liquidity is only possible because you’re essentially changing the asset your debt is denominated in.

The drawback of this model is the inability of these markets to ever influence pricing. Since liquidity is virtual and relies on external markets for prices, these DEXes are unable to influence price discovery in any way. However, it’s a great model for bringing traditional assets like stocks and bonds to DeFi, and makes sense for liquid crypto assets.


We recently wrote about Synthetix and their ecosystem in our Pro report here.

Systematic Rebalancing Strategies

Systematic rebalancing strategies refer to a set of rules or algorithms used by investors to maintain a target asset allocation in their portfolio over time. The goal of systematic rebalancing is to adjust the portfolio’s holdings periodically to ensure that the portfolio remains aligned with the investor’s long-term investment objectives and risk tolerance.

Systematic rebalancing strategies typically involve periodically reviewing the portfolio’s asset allocation, comparing it to the investor’s target allocation, and making adjustments as necessary. For example, if the portfolio’s target allocation is 60% stocks and 40% bonds, and the value of the stock holdings increases, the investor may need to sell some of the stocks and purchase more bonds to bring the portfolio back into balance.

There are different methods of implementing systematic rebalancing strategies, including calendar-based, threshold-based, and risk-based approaches.



“T-bill” refers to a Treasury bill, which is a short-term debt security issued by the U.S. government to finance its operations and pay for its expenses.

T-bills are issued with maturities ranging from a few days to 52 weeks and are typically sold at a discount from their face value, with the difference between the purchase price and the face value representing the investor’s return. T-bills are considered to be one of the safest investments available, as they are backed by the full faith and credit of the U.S. government and are exempt from state and local taxes. T-bills are widely used as a benchmark for short-term interest rates and are commonly held by individuals, institutional investors, and foreign governments as a means of preserving capital and generating income.


TARO, which stands for Taproot Asset Representation Overlay, is a proposed protocol that will allow the issuance of digital assets on the Bitcoin blockchain. Taro assets can be fungible currencies such as stablecoins, or non-fungible, unique tokens such as NFTs or collectibles. They can be transferred over the Bitcoin network, or instantly, at low cost and more privately over the Lightning Network.

Temperature Check

A Temperature Check is to determine if there is sufficient will to make changes to the status quo. Sometimes through voting, sometimes through an informal poll in a forum/discord.


Tendermint is a company founded in 2014 by computer scientist Jae Kwon. Tendermint is the creator of the Proof-of-Stake (PoS) Tendermint Core Byzantine Fault Tolerant (BFT) consensus mechanism that was initially built for the Cosmos Hub blockchain protocol. Tendermint functions as the gateway to the Cosmos blockchain ecosystem. The company created the Application Blockchain Interface (ABCI), which is designed to enable the replication of dApps written in a wide variety of programming languages. They also built the Inter-Blockchain Communication (IBC) protocol, an interoperability protocol designed to enhance the security of data transfers and value exchanges between different blockchain networks.


Territories are the geographical divisions that are used to define where various rules apply to an artist’s music; most music-licensing agreements will have specifications around territories, indicating whether and how an artist’s music can be used inside (or outside) those territories. Music cannot be streamed in a territory where it isn’t licensed. If there are no territory restrictions on the music, it can be available worldwide at the artists discretion.

The Merge

Transition of ETH 1 (Proof of Work) to ETH 2 (Proof of Stake).

Threshold Signatures

Threshold signatures represent a specialized cryptographic digital signature encryption scheme that is designed to protect sensitive information. Threshold signatures are often distributed throughout a system of fault-tolerant nodes within a computerized network. The technology is often considered a more general term because there are numerous threshold signature types including the Rivest-Shamir-Adleman algorithm (RSA), the Digital Signature Algorithm (DSA), as well as the Elliptic Curve Digital Signature Algorithm (ECDSA), among others. Threshold signatures are generally used to secure public and private key data needed to process transactions on blockchain networks and other related computing platforms.

Time-Based Voting

A voting design that ends a vote at a predetermined time.

Time-Weighted Average Market Maker (TWAMM)

The purpose of TWAMM ( pronounced “tee-wham”) is to execute one large order by splitting it up into many smaller virtual orders smoothly over time and a fixed number of blocks. In doing so, a user is less vulnerable to sandwich attacks, suffers less from price impact, and reduces the manual effort required to execute these orders over time.  This concept was first introduced by Paradigm and implemented by Frax Finance. TWAMM was a particularly beneficial use case for Frax to maintain the stability of the FRAX and FPI stablecoin. In traditional finance, this function is often known as a time-weighted average price (TWAP) order.


A set amount of time where all governance and other administrative actions are required to remain, after which they can be implemented.

Token Faucets

In the context of blockchain gaming, token faucets refer to mechanics within a game that result in an increase in token emissions (how many new tokens are generated by the player). They can take the form of in-game prize pools, passive token yields, among others. Token faucets have existed in games for decades, however, it was their use in blockchain gaming that gave rise to the term “play-to-earn”.

Having in-game tokens stored on-chain allowed players to easily extract these assets and exchange them for real-world currency. However, when there is more value extraction than value injection (withdrawals are higher than deposits), supply-side pressure can result in rapid token inflation, and ultimately, a crash of the in-game economy.

A general rule of thumb of game design is for token faucets to be balanced against token sinks, or in other words, for there to be ample ways for players to spend their in-game token rewards instead of selling them on the open market.

Token Sinks

In the context of blockchain gaming, token sinks refer to mechanics within a game that incentivizes players to spend their in-game tokens. They can manifest as various forms of fees or burn mechanics and can be used by developers to directly influence the in-game economy and counter token inflation. See also: sinks and faucets.

Token Unlocks

Token economics refers to the distribution, value accrual mechanism, emission schedule, and sinks associated with a token. A well-designed token economy helps good projects compound their growth by enabling a flywheel to bootstrap usage. If successful, the value generated by the project can be passed on to token holders.

Total Value Secured (TVS)

Similar to TVL, TVS is the total value locked in DeFi protocols secured by a particular Oracle.


The sum total of all non-native digital assets that a protocol controls and can manage through governance – Adapted from here.

Treasury as a Service (TaaS)

Treasury as a Service, is the business model of decentralized custody of partnership funds. Protocols like OlympusDAO are designed for TaaS by selling bonds and absorbing partners’ liquidity into its treasury as a result.

Treasury Management

Treasury management operations is defined as how a DAO uses its treasury in practice as well as the platforms and tools the DAO uses to manage it (ie. Superfluid, Multisig etc).

Treasury Swap

When DAOs agree to swap some portion of their ‘treasury’ with another protocol/DAO. Often this is done with native governance tokens.

Trust Minimized Bridges

Secure communication across blockchains without a trusted third party or a synchrony assumption is impossible. Trust minimized bridges rely on a synchrony assumption for security instead of a trusted third party (TTP). Atomic swaps and rollup bridges fit under this category.


Undercollateralized Loans

Loans that do not require borrowers to provide collateral equal to or larger in value than the loan.

Unsecured Lending

An unsecured loan is a loan that doesn’t require collateral. Instead of relying on a borrower’s assets as security, lenders approve unsecured loans based on a borrower’s creditworthiness.

User-generated content (UGC)

User-generated content is content created by the regular people on social media, rather than brands. Brands collect that content through contests, branded hashtags, or simply reaching out to ask permission. When brands reshare that content with their own followers, they’re implementing a UGC campaign.

Utilization Rate

Total Borrows Divided by Total Supply. Utilization rate monitors which share of the reserve’s total capital is borrowed at a certain point in time.


An Unspent Transaction Output (UTXO) is the amount of cryptocurrency that remains after a transaction is executed. Each UTXO represents a chain of ownership, which is represented as a chain of digital signatures in which a transaction originator signs a message transferring ownership of their UTXO to the recipient’s public key. As a result, UTXOs are responsible for beginning and ending each cryptocurrency transaction.



A node in a Proof of Stake system responsible for storing data, processing transactions, and adding new blocks to the blockchain.

Validity Proof

Validity Proofs present evidence that a state transition is correct. They reflect a more pessimistic view of the world. Blocks include values representing L2 state if, and only if, that state is correct.

Value Area

The Value Area is a range of prices where the majority of trading volume took place on the prior trading day. In specific, this area is the range where 70% of the prior day’s volume happened. The value area is approximately one standard deviation above and below the average highest volume price.


Virtual AMM is based on the traditional concept of a AMM. In a vAMM tokenswaps are expanded in its application to derivatives such as perpetual swaps. This was created by Perpetual Protocol.

Variable Rate Gradual Dutch Auctions (VRGDA)

Variable Rate Gradual Dutch Auctions are a new model for NFT distribution. It provides a way to issue NFTs using nearly any schedule while allowing users to seamlessly buy them at any time. The mechanism works by raising prices when sales are ahead of schedule and lowering prices when sales are behind schedule. If sales are perfectly on schedule, the price to buy the next one will remain the same.

This model was designed by the Paradigm team and has been initially used in 2 projects: Art Gobblers & 0xMonanco.

Variable Rates

Variable rate refers to interest rate on loans or deposits whose rate is constantly evolving with utilisation.

Vault Strategies

After depositing, your funds first go to the vault contract and then are deployed to one or more strategy contracts. Guardians and strategists monitor deposits in order ensure optimal returns and to be available during critical situations.

Ve - Tokens

Vote escrowed tokens. Locked for a period of time to participate in governance.

Veblen Goods

A Veblen good is generally a type of luxury good for which the price directly impacts the demand, the higher the price, the greater the demand.

These items also tend to have further appreciation in demand when they are exclusive. Apart from price-related barriers to entry, this could also be represented by scarcity in the market.


Vega refers to the sensitivity of an option price to a change in implied volatility. Vega measures the change in an option price for a one point change in implied volatility. Vega is positive for option buyers and negative for option sellers. Vega is the highest when the underlying price is near the strike price, and decreases as the contract approaches expiration.

Verifiable Authenticity

Verifiable authenticity is the ability to verify that something is accurate and genuine using the blockchain. It is a frequently referenced attribute of NFTs, with many valuable, potential use cases such as art, certifications, and IDs.

Verifiable Credentials

Verifiable credentials (VCs) are tamper-proof credentials that can be verified cryptographically on the blockchain while representing all the same information as a physical credential. VCs are doing for physical credentials what crypto has done for cash. There are three parties involved in verifiable credentials:

  1. Issuers. These create and transfer VCs to holders. VCs can be issued to represent milestones, accomplishments, and significant activities.

  2. Holders. Holders possess VCs in their wallets and present them to others. They can be an individual like you and me or an entity.

  3. Verifiers/relying parties. These receive the presented VCs from holders and rely on the credentials to grant access or process transactions.

Verifiable Delay Function (VDF) (AMMs)

Verifiable Delay Functions have a wide number of applications in decentralized systems. In most simplistic terms, it is a function that is difficult and time-consuming to compute but easy to verify.  In the context of AMMs, VDF parameters are generated on the front-end AMM over time and quickly verified on the blockchain. Although AMM with VDF can be a direct on-chain solution to MEV, this feature has seen little traction.


veTokens stands for voting escrow Tokens, which are Tokens locked for voting. The longer you lock your Tokens for, the more voting power you have (and the bigger boost you can reach). The number of veTokens you will receive depends on how long you lock your Tokens for. The minimum locking time is one week and the maximum locking time is four years. The veToken mechanism is pioneered by the Curve Team.

VEV - Voter Extractable Value

Here – VEV solves the issue of voter apathy and brings value to the DAOs integrated with Bribe

Video codec

The video codec determines the type of compression and decompression, and also affects the video quality. Common video codecs are MP4, H.264, and Motion JPEG.

Virtual AMMs

An AMM where the physical liquidity pool is not required

Virtual Automated Market Makers (vAMMs)

 vAMMs are trading systems designed to replicate the liquidity depth of an AMM without actually having any liquidity. As the name suggests, the liquidity depth of these AMMs is derived from setting virtual parameters. Instead of setting up a Uniswap v2 pool with $5M in each of ETH and USDC, you create a virtual AMM that is a replica of the v2 pool’s liquidity curve as if it had $5M of ETH and USDC. 


Assets are stored in a smart contract vault that manages all of the collateral backing the vAMM. In a traditional AMM, the liquidity comes from liquidity providers to facilitate trading, but in a vAMM the liquidity comes from the vault, outside of the vAMM. With the absence of liquidity providers, there is no impermanent loss. 

We expand on Virtual AMMs Perpetual Protocol and Drift protocol in this report here.

Virtual Land

Virtual land is an ownable area of digital land on a metaverse platform. Popular NFT land projects include Decentraland, The Sandbox. NFTs are suited to representing land ownership as each one is unique and easily proves digital ownership. Virtual land can be used for advertising, socializing, gaming, and work, among other use cases

Volatility Surface

A volatility surface is a three dimensional plot of the implied volatility profile of options. It shows the implied volatility at different levels of moneyness across different expires.

Volume Profile

Volume Profile is an advanced charting study that displays trading activity over a specified time period at specified price levels. The study plots a histogram on the chart meant to reveal dominant and/or significant price levels based on volume. Essentially, Volume Profile takes the total volume traded at a specific price level during the specified time period and divides the total volume into either buy volume or sell volume and then makes that information easily visible to the trader.

Volume Weighted Average Price (VWAP)

The volume-weighted average price (VWAP) is a trading benchmark used by traders that gives the average price a security has traded at throughout the day, based on both volume and price. VWAP is important because it provides traders with insight into both the trend and value of a security.

Vote Bribe

Payments in exchange for voting on proposals in a certain way.

Voter Participation

Voter participation is a measure of proposal participation by DAO members. A higher voter participation rate (20%+) is indicative of a healthier DAO, as more members are participating (voting) in major decisions that effect the organization, whereas a low participation rate (e.g. 10-20%) is indicative of a small percentage (centralized) of voters participating in major decisions.

Voting Power

The voting power which is used to vote for or against existing proposals.



A wallet is software or a physical device which stores a user’s public and private keys for a blockchain address. It provides an interface through which users can view their token balances and submit transactions to the blockchain.

There are 2 main types of crypto wallets: hot wallets and cold wallets. Hot wallets, such as browser-based and mobile wallets, are connected to the internet and are considered to be more convenient but less secure. Cold wallets  are not connected to the internet and are therefore considered to be more secure but less convenient to use. Hardware wallets are cold wallets.

Washington Consensus

The Washington Consensus refers to a set of economic policy prescriptions that were widely promoted by international financial institutions, such as the International Monetary Fund (IMF) and the World Bank, in the 1980s and 1990s. The term “Washington Consensus” was coined by economist John Williamson in 1989.

The Washington Consensus advocated for a series of neoliberal policies aimed at promoting economic liberalization, free markets, and fiscal discipline.


WAV is a raw audio format, and it typically contains lossless (or uncompressed) audio, which means it can preserve all of the original audio file’s data. It’s desirable to have WAVs on hand as well as MP3s for many reasons, particularly for maximum sound quality.

Web3 Game Distribution

Web3 game distribution refers to the accessibility and discoverability of blockchain games. Despite the numerous benefits blockchain technology can add to businesses and users, in the current landscape there are still many barriers to entry and the user experience leaves a lot to be desired.

Both mobile, PC, and console distribution for blockchain games all present their own issues which need to be overcome before truly tapping the mainstream.

Wrapped tokens

Wrapped cryptocurrencies enable crypto assets to be used on blockchains to which they are not native. This interoperability hack has brought bitcoin (BTC) and other popular cryptocurrencies to smart contract platforms, including the Ethereum ecosystem. Wrapped cryptocurrencies increase the utility and liquidity of smart contract platforms and popular decentralized finance (DeFi) applications. Other reasons to wrap cryptocurrencies may include ERC-20 token swapping or taking advantage of blockchain functions that a crypto asset might not have on its native chain.


xNFT (Executable NFT)

An xNFT (executable NFT) is a new token standard on the Solana blockchain. It is tokenized code representing ownership rights over its execution. This means that developers can create apps that a user can add directly to their wallet. In essence, xNFTs are applications like on a mobile phone. These applications can be built directly into the digital assets that they represent, meaning holders can use the asset however they like within an application itself, without connecting to an external platform.



Yield Aggregator

Yield aggregators essentially automate the process of staking and collecting the generated rewards on behalf of users, to optimize gas fee spending via different strategies [sometimes complex]. These strategies involve moving tokens around different platforms and maximizing yields via auto compounding.

Yield Curve

The yield curve is a graphical representation of the relationship between interest rates and the time to maturity of bonds with similar credit quality.

It shows the yield (or rate of return) on bonds of different maturities, typically ranging from 3 months to 30 years. The yield curve can be upward-sloping (long-term rates higher than short-term rates), flat (long-term rates similar to short-term rates), or inverted (long-term rates lower than short-term rates). The shape of the yield curve can provide insights into the expectations and perceptions of investors about future economic growth and inflation.

Yield Farming

Users are rewarded for performing actions like lending, borrowing, staking, or providing other forms of asset liquidity – and the reward comes in the form of a token that represents a piece of ownership of the protocol itself.

yVault Tokens

yVault Tokens are like a deposit receipt. They represent a user’s share of the yVault that they are participating in. If your yVault generates profit, the share price of your yVault tokens will increase. This happens because there are more underlying tokens in the yVault to redeem upon withdrawal.



ZIRP stands for “zero interest rate policy.”

It is a monetary policy approach used by central banks to stimulate economic growth by setting the target interest rate at or near zero percent. ZIRP is typically used when the economy is facing deflationary pressures or a severe downturn and traditional monetary policy tools, such as cutting interest rates, are no longer effective.

By reducing borrowing costs for businesses and households, ZIRP is intended to encourage borrowing, investment, and spending and to stimulate economic activity. However, ZIRP can also have unintended consequences, such as asset price inflation, reduced bank profitability, and higher risks of financial instability.


In a ZK-Rollup, operator(s) must generate a succinct Zero-Knowledge Proof (SNARK) for every state transition, which is verified by the Rollup contract on the mainchain. This SNARK proves that there exists a series of transactions, correctly signed by owners, which update the account balances in the correct way, and which lead from the old Merkle root to the new one. It is thus impossible for the operators to commit an invalid or manipulated state.


SNARKs are short for succinct non-interactive arguments of knowledge. In this general setting of so-called interactive protocols, there is a prover and a verifier and the prover wants to convince the verifier about a statement (e.g. that f(x) = y) by exchanging messages. The generally desired properties are that no prover can convince the verifier about a wrong statement (soundness) and there is a certain strategy for the prover to convince the verifier about any true statement (completeness).


A zero-knowledge scalable transparent argument of knowledge (zk-STARK) is a specialized type of cryptographic proof that is used to ensure privacy on blockchain-based distributed ledger systems. It works by proving that one party is in possession of specific data without actually revealing the data to the network. Zk-STARKs are a crucial element of Zero-Knowledge Rollups (zk-Rollups), a popular Layer-2 scaling solution. Zk-STARKs are a new development based on zero-knowledge succinct non-interactive arguments of knowledge (zk-SNARKS), and are distinguished by being more trustless than their predecessor.


A Zero-Knowledge Proof (ZKP) is a type of cryptographic proof that provides users with a higher degree of privacy when engaging in digital transactions. In essence, ZKPs enable one party to prove to another party that they know a specific value, without conveying any other information apart from the fact that they know that value. In short, these proofs allow for information to be accurately verified without sharing any details about the underlying information and the identities of the transaction participants.

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