Common terms you would come across when reading this document, participating with xHashtag or in the web3 domain in general.
Airdrops: The distribution of tokens directly to users' wallets by crypto projects often for meeting specific participation criteria (i.e., being active in a community, holding a specific number or type of token(s), holding a token for a certain period of time).
APR: Annual Percentage Rate is an ordinary interest rate applied to the principal amount of an investment or a loan. It doesn't take into account the concept of compound interest
APY: Annual Percentage Yield is a measure of interest applicable to an investment or loan that takes into account the compound interest.
Arbitrum: A layer 2 scaling solution for Ethereum that was founded in 2019. It utilizes ETH to pay for transaction fees and its networks include Arbitrum Mainnet and Rinkby Testnet
Avalanche: A layer 1 blockchain founded in 2020 built on Proof of Stake (PoS). AVAX is the native token. Its network includes the mainnet and Fuji.
Blockchain: A distributed database that is shared among computer network nodes. As a database, a blockchain stores information electronically in a digital format.
Bridge: A bridge connects two chains and allows NFT, tokens, and other arbitrary data to be transferred between them.
Campaign: A process/ event of conducting promotions and advertising by the company of a brand or of themselves.
Collateral: An asset that is used as a guarantee that someone will repay a loan that he or she took.
Credentials: These are unique tokens which can be stored digitally as a kind of certificate of performance by an individual. These are non-tradable and verifiable by the issuer.
Crypto: A digital asset that is encrypted using cryptography and is built on blockchain technology.
DAO: Decentralized Autonomous Organization, sometimes called a decentralized autonomous corporation, is 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.
dApp: A decentralized application is a computer application that runs on a decentralized computing system. DApps have been popularized by distributed ledger technologies such as the Ethereum blockchain, through the use of smart contracts.
DeFi: Decentralized finance is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments. Instead, it utilizes smart contracts on blockchains (e.g., Ethereum).
Decentralized: No unique owner, operator, or single point of failure.
DEX: Decentralized Exchange, an on-chain program for buying, selling, trading, or swapping on-chain assets.
ERC20: Ethereum Request for Comments is an application-level standard application level standards for Ethereum (e.g. ERC-20 is a common protocol for deploying fungible tokens on Ethereum).
Ethereum: An open-source and decentralized layer 1 blockchain, which was founded in 2015. Its native cryptocurrency is ETH, which is used for staking and paying transaction fees.
EVM: Ethereum Virtual Machine defines the rules for computing on Ethereum, enabling developers to launch and execute smart contracts.
Free economy: A decentralised economy with a minimum of governmental or organizational restrictions. In web3 this can be similar to DAOs where the members/ users freely make economic decisions.
Fungible Token: An on-chain asset that has a quantity greater than 1 and those assets have no discernable or unique traits that differentiate one from another.
Gas fee: The cost associated with the computational effort required to perform a transaction on a blockchain.
ICO: Initial Coin Offering or Initial Currency Offering is a type of funding using cryptocurrencies. It is often a form of crowdfunding, although a private ICO which does not seek public investment is also possible.
IDO: Initial DEX Offering is an ICO that is completed on a decentralised exchange.
Layer 1: A main network that refers to a blockchain that defines protocol rules (e.g. Bitcoin, Ethereum, Solana).
Layer 2: A program or technology that exists on top of a Layer 1 blockchain, often created to accomplish something that may not be easily achievable by its parent layer 1 (e.g. increase speed or functionality).
Leverage: Borrowing assets from exchanges to amplify your crypto trading capacity
LP token: It is a token given to users who loan their crypto to a liquidity pool. This represents a user's share of the pool and can be used to redeem the original tokens.
Metaverse: A network of 3D virtual worlds.
Minting: To manifest new tokens onto a blockchain.
NFT: An on-chain asset that has a quantity of 1, which has unique traits that differentiate it from any other.
Off-chain: Here some of the work from a blockchain system is transferred to a third party which helps in validating and authenticating transactions and then later integrates it back into the blockchain.
On-chain: This refers to a transaction/task that is carried out on the blockchain network from start to end.
Opensea: It is a marketplace to buy and sell NFTs.
Polygon: A layer 2 blockchain founded in 2020 built on the Proof of Stake (PoS) consensus mechanism. The native token on Polygon is called MATIC and is used for staking and paying transaction fees. Its networks include the Polygon mainnet and Mumbai testnet
Private Key: A private key is a secret number that is used in cryptography, similar to a password. In cryptocurrency, private keys are also used to sign transactions and prove ownership of a blockchain address.
Proof of Authority: PoA, In PoA-based networks, transactions and blocks are validated by approved accounts, known as validators.
Proof of History: PoH, A consensus mechanism that relies on an internal clock to track the passage of time.
Proof of Stake: PoS, is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain.
Proof of Work: PoW, is a form of adding new blocks of transactions to a cryptocurrency's blockchain. The work, in this case, is generating a hash (a long string of characters) that matches the target hash for the current block. The crypto miner who does this wins the right to add that block to the blockchain and receive rewards.
Public Key: A unique cryptographic public identifier for an on-chain account.
Protocol: Basic sets of rules that help in sharing data between computers. In crypto, they establish the structure of a blockchain and help them to be decentralized
Reputation: It is a digital representation of an entity's standing or status in a specific domain, that is verifiable and helps the user create their own public identity to be used for future work.
Rewards: Rewards in web3 are tokens given away to the users to promote their brands and track their reputation.
Smart contract: On-chain programs with pre-defined rules to govern how users and tokens interact with the program when certain conditions are met.
Solana: A layer 1 blockchain founded in 2020 built on a concept called Proof of History (PoH) to enable scaling and affordability. Its native token is called SOL. Its network includes Mainnet-Beta, Testnet, and Devnet
Stablecoins: Cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities.
Testnet: It is a safe environment for testing a project's performance before committing it to the mainnet.
Token: Virtual currency token or a denomination of a cryptocurrency. It represents a tradable asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes.
Tokenomics: The economic details of a token project, including information about supply, inflation/deflation, or other mechanisms that may impact the value of an asset in the future.
USDC: A digital dollar which moves at internet speed and is running on many blockchains around the world. It is issued by the CENTRE consortium.
USDT: A crypto-established stablecoin pegged to the US dollar and backed by Tether's services.
Vetting: Investigating an individual or a company before trusting, investing or borrowing from them
Vaults: It can receive crypto like a normal asset balance in your account, but can also prevent stored crypto from being immediately withdrawn by adding optional security steps.
Wallet: A crypto wallet is used to sign transactions and store the private keys that are used to interact with the blockchain network. A wallet contains a public key (this is the wallet address) and the private keys needed to complete and sign transactions. Control of the private key means control of the assets.
Web3: Web3, also known as Web 3.0, is an idea for a new iteration of the World Wide Web that incorporates decentralization and self-custody of assets. It is often contrasted with Web 2.0, wherein data and content are centralized in a small group of companies sometimes referred to as "Big Tech".
Whitelist: Pre-approved list of users or wallets that are allowed to participate in some type of event (e.g., mint a new NFT or participate in an IDO).
Wormhole: It is a bridge that efficiently facilitates moving digital assets from one blockchain to another.