Crypto Glossary
Crypto has its own language — a tangle of acronyms, slang, and jargon that can make a simple idea sound impossible. This glossary defines 120+ blockchain, DeFi, and trading terms in plain English, so you can read a chart, a contract, or a group chat without getting lost. New here? Skim it top to bottom, or jump to a letter.
A–Z · 120+ terms defined
A
Airdrop
A distribution of free tokens sent to wallet addresses, often to reward early users, bootstrap a community, or market a new project. Some airdrops require you to have used a protocol beforehand; scam "airdrops" bait you into approving a malicious contract.
Altcoin
Any cryptocurrency other than Bitcoin. The term originally meant "alternative coin" and now spans everything from Ethereum to the newest memecoin.
AMM (Automated Market Maker)
The engine behind most decentralized exchanges. Instead of matching buyers and sellers through an order book, an AMM prices trades against a pool of tokens using a formula, letting anyone swap instantly.
Aping / Aping In
Buying into a token quickly and impulsively, usually without much research, because of hype or fear of missing out. "Aping in" is the opposite of a careful, planned entry.
Approval (Token Approval)
A permission you grant a smart contract to spend tokens from your wallet, required for most DeFi swaps and deposits. Unlimited approvals are convenient but risky — a malicious or hacked contract can drain approved tokens later.
APY / APR
Two ways of quoting a yield. APR (annual percentage rate) is the simple yearly rate, while APY (annual percentage yield) includes the effect of compounding, so it looks higher for the same underlying return.
ATH (All-Time High)
The highest price an asset has ever reached. Traders watch ATHs because breaking above one can signal strong momentum, or a blow-off top.
ATL (All-Time Low)
The lowest price an asset has ever traded at. A new ATL often reflects a failing project or brutal bear market.
B
Bear Market
An extended period of falling prices and negative sentiment across the market. "Bearish" describes an expectation that prices will drop.
Bid & Ask
The bid is the highest price buyers will currently pay; the ask is the lowest price sellers will accept. The gap between them is the spread, and a wide spread signals thin liquidity.
Bitcoin (BTC)
The first cryptocurrency, launched in 2009, and still the largest by market cap. It runs on its own Proof of Work blockchain with a fixed 21-million supply, and is often treated as digital gold.
Block
A batch of transactions bundled together and added to the blockchain as a single unit. Each block references the one before it, forming the chain that gives the technology its name.
Blacklist Function
Code in a token contract that lets the deployer block specific wallets from selling or transferring. It is sometimes used against bots, but is also a classic scam tool for trapping ordinary buyers.
Blockchain
A shared, append-only ledger of transactions maintained across many computers at once. Records are grouped into blocks, and each block is cryptographically linked to the previous one, making the history very hard to alter.
Bridge
A tool that moves assets or data from one blockchain to another — for example, taking a token from Ethereum onto Base. Bridges are essential for a multi-chain world but have historically been a major target for hacks.
Bull Market
An extended period of rising prices and optimism. "Bullish" describes an expectation that prices will climb.
Burn
Permanently removing tokens from circulation by sending them to an address no one can access. Projects burn tokens to reduce supply, which can support price if demand holds.
C
CEX (Centralized Exchange)
A company-run trading platform like Coinbase or Binance that holds custody of your funds and matches trades on its own books. CEXes are easy to use but require trust in the operator — "not your keys, not your coins." Learn the difference between a DEX and a CEX.
Circulating Supply
The number of tokens currently available and trading in the market, excluding locked, reserved, or unminted tokens. It is the supply figure used to calculate market cap.
Coin
A cryptocurrency that runs on its own native blockchain, such as Bitcoin (BTC) or Ether (ETH). This contrasts with a token, which is issued on top of an existing chain.
Cold Wallet
A wallet kept offline — typically a hardware device — so its private keys never touch the internet. Cold storage is the safest way to hold crypto long-term because remote hackers can't reach it.
Consensus
The mechanism by which a decentralized network agrees on which transactions are valid and what the ledger's true state is. Proof of Work and Proof of Stake are the two best-known consensus methods.
Cryptocurrency
Digital money secured by cryptography and recorded on a blockchain, with no central bank or government issuing it. Bitcoin was the first; thousands now exist, ranging from currencies to utility and governance tokens.
Custodial vs Non-Custodial
Custodial means a third party (like an exchange) holds your private keys and funds for you; non-custodial means you hold your own keys and have full control. "Not your keys, not your coins" captures the trade-off.
D
DAO (Decentralized Autonomous Organization)
A group coordinated by rules encoded in smart contracts rather than by a traditional management structure. Members typically hold governance tokens and vote on proposals like how to spend a shared treasury.
dApp (Decentralized Application)
An app whose backend runs on smart contracts on a blockchain rather than on a company's private servers. Because the logic lives on-chain, a dApp can keep working without any single operator in control.
DCA (Dollar-Cost Averaging)
Investing a fixed amount at regular intervals instead of all at once, which smooths out your average entry price and removes the pressure of timing the market. See our lesson on dollar-cost averaging.
DeFi (Decentralized Finance)
Financial services — trading, lending, borrowing, earning yield — built on smart contracts instead of banks or brokers. Anyone with a wallet can use DeFi permissionlessly, but the code carries its own risks.
Degen
Short for "degenerate," a half-joking badge of honor for a trader who chases high-risk, speculative plays like brand-new memecoins. Degen behavior can win big or lose everything.
Depeg
When a stablecoin or pegged asset loses its intended fixed value — for example, a dollar-pegged coin trading at 90 cents. Depegs can trigger panic and cascading losses across DeFi.
DEX (Decentralized Exchange)
A trading venue where users swap tokens directly from their own wallets through smart contracts, with no company holding their funds. Uniswap and Raydium are examples. Compare DEXes and CEXes.
Diamond Hands
Slang for holding an asset through heavy volatility without selling, out of conviction. The opposite of paper hands.
Dusting Attack
Sending tiny amounts of crypto ("dust") to many wallets to try to de-anonymize their owners by tracking how the dust moves, or to lure people to scam sites. Best practice is to ignore unexpected dust and never interact with unknown tokens.
E
ERC-20
The technical standard that most fungible tokens on Ethereum follow. Because ERC-20 tokens share a common interface, wallets and exchanges can support them all in the same way.
Ethereum (ETH)
The largest smart-contract blockchain and the home of most DeFi, NFTs, and tokens. Its native coin, Ether (ETH), pays for gas, and its programmable design inspired most of the chains that followed.
EVM (Ethereum Virtual Machine)
The runtime that executes smart contracts on Ethereum. "EVM-compatible" chains like BNB Chain, Base, and Polygon run the same contract code, so developers can deploy across them with little change.
F
FDV (Fully Diluted Valuation)
What a project's market cap would be if every token that will ever exist were already in circulation — max supply multiplied by price. A huge gap between FDV and current market cap warns of heavy future dilution.
Fiat
Government-issued currency like the US dollar or euro that isn't backed by a commodity. In crypto, "fiat" refers to traditional money as opposed to digital assets — "on-ramps" convert fiat into crypto.
Flash Loan
A DeFi loan that is borrowed and repaid within a single transaction, requiring no collateral because if it isn't paid back, the whole transaction reverts. Traders use them for arbitrage, but attackers have used them to exploit protocols.
Fungible
Interchangeable — any one unit is identical in value to another, the way one dollar equals any other dollar. Bitcoin and ERC-20 tokens are fungible, whereas each NFT is non-fungible and unique.
FOMO (Fear of Missing Out)
The anxious urge to buy an asset because it is pumping and you don't want to miss the gains. FOMO drives many people to buy tops and is a common cause of losses.
Fork
A split or change in a blockchain's rules. A soft fork is backward-compatible; a hard fork creates a permanent divergence, sometimes producing a whole new coin (as when Bitcoin Cash forked from Bitcoin).
FUD (Fear, Uncertainty, and Doubt)
Negative information or sentiment — sometimes accurate, sometimes deliberately spread — that pushes people to sell or stay away. "Spreading FUD" implies the negativity is exaggerated or bad-faith.
Funding Rate
Periodic payments exchanged between long and short traders in a perpetual futures market to keep its price tethered to the spot price. A positive rate means longs pay shorts; it signals how crowded each side is.
G
Gas
The fee you pay to a network to process a transaction or run a smart contract, compensating the validators who do the work. When the network is busy, gas prices rise and transactions cost more.
Gas War
A scramble during a hyped mint or launch where many people bid ever-higher gas fees to get their transaction included first. Gas wars can push fees to painful levels for a few minutes.
Genesis Block
The very first block of a blockchain, block number zero, hardcoded into the software at launch. It has no predecessor and marks the origin of the entire chain's history.
Governance Token
A token that grants voting power over a protocol or DAO, letting holders propose and decide on changes like fees or treasury spending. Its value tends to track influence over the project rather than direct cash flow.
GM
Short for "good morning," a friendly greeting used constantly in crypto communities to signal engagement and belonging. "GN" (good night) is its evening counterpart.
Gwei
A small denomination of Ether used to price gas — one gwei is a billionth of an ETH. Gas prices are almost always quoted in gwei because the amounts are tiny.
H
Halving
A scheduled event on some blockchains, notably Bitcoin, where the reward paid to miners for each new block is cut in half. By slowing the creation of new coins, halvings reduce inflation and are watched closely by the market.
Hash
A fixed-length string produced by running data through a one-way cryptographic function. The same input always yields the same hash, but you can't reverse it — hashes link blocks and verify data integrity.
Hashrate
The total computing power that miners are pointing at a Proof of Work network, measured in hashes per second. A higher hashrate means the network is harder to attack and generally more secure.
Hardware Wallet
A physical device, such as a Ledger or Trezor, that stores your private keys offline and signs transactions without exposing them to the internet. It is the practical form of cold storage for most people.
HODL
Holding an asset long-term regardless of price swings, rather than trading in and out. The word began as a typo of "hold" and is now a whole investing philosophy — and a backronym for "hold on for dear life."
Honeypot
A malicious token you can buy but cannot sell, because the contract secretly blocks or heavily taxes selling to trap your money. A honeypot detector simulates a sell to catch these before you buy — scan any token with the CryptoLwa rug checker.
Hot Wallet
A wallet connected to the internet, such as a browser extension or mobile app. Hot wallets are convenient for everyday spending and trading but are more exposed to hacks than cold storage.
I
Impermanent Loss
The paper loss a liquidity provider suffers when the prices of the two pooled tokens move apart, leaving the position worth less than if they'd simply held the tokens. It becomes a real loss only if you withdraw while the divergence persists.
K
KYC (Know Your Customer)
The identity-verification process centralized exchanges require by law before you can trade — typically an ID and a selfie. Decentralized protocols generally have no KYC, since you interact directly from your own wallet.
L
Layer 1 (L1)
A base blockchain that settles its own transactions and provides its own security, such as Bitcoin, Ethereum, or Solana. Everything else in the stack is built on top of an L1.
Layer 2 (L2)
A network built on top of a Layer 1 to make transactions faster and cheaper, then posting its results back to the base chain for security. Arbitrum, Optimism, and Base are Ethereum L2s.
Lending
Depositing crypto into a protocol so others can borrow it, earning you interest in return. Borrowers must post collateral, and rates float with supply and demand.
Leverage
Borrowed money used to size a trade larger than your own capital, multiplying both gains and losses. "10x leverage" means a 10% move against you can wipe out your entire stake.
Limit Order
An instruction to buy or sell only at a specific price or better. Unlike a market order, it won't execute until the market reaches your price — giving you control at the cost of possibly not filling.
Liquidation
The forced closing of a leveraged or borrowed position when losses erode your margin below the required minimum. The exchange or protocol sells your collateral to cover the debt, often at the worst possible moment.
Liquidity
How easily an asset can be bought or sold without moving its price much. Deep liquidity means large trades barely budge the price; thin liquidity means even small trades cause big swings.
Long
A position that profits when the price goes up — the trader buys expecting to sell higher later. It is the opposite of a short.
LP (Liquidity Provider / LP Token)
Someone who deposits a pair of tokens into a DEX pool so others can trade, earning a share of the fees. In return they receive an LP token that represents their stake and can be redeemed for the underlying assets.
M
Mainnet
The live, production blockchain where real transactions with real value take place. It contrasts with a testnet, a practice network that uses valueless tokens for development.
Market Cap
A token's price multiplied by its circulating supply — a rough gauge of its total market value. A "low-cap" coin is smaller and typically more volatile than a "large-cap" one.
Market Order
An instruction to buy or sell immediately at the best price currently available. It fills fast but you accept whatever price the market gives, including any slippage.
Max Supply
The hard cap on how many units of a token can ever exist. Bitcoin's max supply is 21 million; some tokens have no cap at all, meaning supply can grow indefinitely.
Memecoin
A token whose value comes mainly from community, humor, and hype rather than technology or utility — think Dogecoin or the latest dog-and-frog coins. They can pump violently and collapse just as fast.
Mempool
The waiting room of pending transactions that have been broadcast but not yet included in a block. Bots watch the public mempool to spot profitable trades to front-run, which is where much MEV originates.
MEV (Maximal Extractable Value)
Profit that block producers and specialized bots capture by reordering, inserting, or censoring transactions within a block. Sandwich attacks are one common, predatory form of MEV.
Mint
Creating new tokens or NFTs and recording them on-chain. "Minting" an NFT is how a buyer brings it into existence from a collection; a token contract's mint function creates new supply.
Mint Authority
The permission that lets a party create new units of a token. If a project keeps an open mint authority, the team can print more supply and dump it — a serious red flag on any token you're considering.
Mining
The process of using computing power to validate transactions and add new blocks on a Proof of Work chain, earning newly issued coins as a reward. It secures the network but consumes significant energy.
Moon / Mooning
Slang for a price rising rapidly and dramatically. "To the moon" is a rallying cry of optimism, and "mooning" describes a token on a steep vertical run.
Multisig
A wallet that requires several private keys to approve a transaction — for example, 2 of 3 signers must agree. Multisig protects treasuries and teams by removing any single point of failure.
N
NFT (Non-Fungible Token)
A unique, one-of-a-kind token that proves ownership of a specific digital item like art, collectibles, or in-game assets. Unlike a coin, each NFT is distinct and not interchangeable with another.
Node
A computer that runs a blockchain's software, storing a copy of the ledger and helping validate and relay transactions. The more independent nodes a network has, the more decentralized and resilient it is.
O
Off-Chain
Any activity or data that happens outside the blockchain itself, such as an order matched on a company's private servers. Off-chain systems are faster and cheaper but require more trust than on-chain ones.
On-Chain
Anything recorded directly on the blockchain and verifiable by anyone, such as a transfer or a smart-contract interaction. On-chain data is transparent and permanent.
Optimistic Rollup
A Layer 2 that assumes transactions are valid by default and only checks them if someone submits a challenge during a dispute window. Arbitrum and Optimism use this model; it is cheap but withdrawals back to L1 can take days.
Oracle
A service that feeds real-world data — like asset prices — into smart contracts, which can't fetch outside information on their own. If an oracle is manipulated or wrong, the contracts relying on it can be exploited.
Order Book
A live list of all outstanding buy and sell orders for an asset at various prices. Centralized exchanges match trades through order books; the gap between the highest bid and lowest ask is the spread.
P
Paper Hands
Slang for selling an asset quickly at the first sign of trouble or a small gain, lacking the nerve to hold. The opposite of diamond hands.
Perpetual (Perp)
A futures contract with no expiry date, letting traders hold leveraged long or short positions indefinitely. A funding-rate mechanism keeps the perp's price anchored to the underlying spot price.
Phishing
A scam that tricks you into revealing your seed phrase or signing a malicious transaction, usually through a fake website, email, or support impersonator. No legitimate service will ever ask for your seed phrase.
Proof of Stake (PoS)
A consensus method where validators lock up (stake) tokens to earn the right to add blocks, and lose part of their stake if they cheat. It uses far less energy than Proof of Work; Ethereum switched to PoS in 2022.
Proof of Work (PoW)
A consensus method where miners compete to solve a hard math puzzle, and the winner adds the next block. It is extremely secure but energy-intensive; Bitcoin uses Proof of Work.
Private Key
The secret number that proves ownership of an address and authorizes moving its funds. Whoever holds the private key controls the money, so it must never be shared or exposed.
Public Key / Address
The shareable identifier derived from your private key that others use to send you crypto, like an account number. It is safe to share publicly; only the matching private key can spend from it.
Pump and Dump
A manipulation scheme where insiders hype a token to inflate its price, then sell into the buying frenzy, leaving latecomers with heavy losses as the price collapses. Coordinated "pump groups" run this deliberately.
R
Rekt
Crypto slang (a spelling of "wrecked") for suffering a devastating loss, often from a bad trade, a liquidation, or a scam. "Getting rekt" is the outcome everyone fears and jokes about.
ROI (Return on Investment)
The gain or loss on a position expressed as a percentage of what you put in. A "2x" means your money doubled (100% ROI); traders use ROI to compare how different plays performed.
Rollup
A Layer 2 scaling approach that bundles many transactions together, processes them off the main chain, and posts a compressed summary back to it. Rollups inherit the base chain's security while cutting fees dramatically.
RPC (Remote Procedure Call)
The connection your wallet or app uses to read data from and send transactions to a blockchain. An RPC endpoint is essentially the doorway to a network; a malicious one can feed you fake data.
Rug Pull
A scam where a project's team suddenly drains the liquidity pool or dumps their token holdings, crashing the price to zero and leaving buyers with worthless tokens. Checking the contract first can reveal the setup — use the CryptoLwa rug checker before you buy.
S
Sandwich Attack
A form of MEV where a bot spots your pending swap, buys just before it to push the price up, then sells right after — pocketing the difference and worsening your fill. Higher slippage tolerance makes you a bigger target.
Scam Token
A token created purely to steal money, whether through a honeypot, a hidden mint, a rug pull, or a fake copy of a legitimate coin. Contract scans and holder checks help you spot them before buying.
Seed Phrase
A list of 12 or 24 words that backs up your entire wallet and can restore it on any device. Anyone who obtains your seed phrase can take all your funds, so it should be stored offline and never typed into a website.
Sell Tax
A fee, written into a token's contract, charged whenever you sell — sometimes small and disclosed, sometimes extreme and hidden. Very high or asymmetric buy/sell taxes are a warning sign of a trap token.
Short
A position that profits when the price falls — the trader borrows and sells an asset, hoping to buy it back cheaper. Shorting carries unlimited theoretical risk, since a price can keep rising.
Sidechain
An independent blockchain that runs alongside a main chain and connects to it through a bridge, with its own security and consensus. Unlike a rollup, a sidechain does not inherit the main chain's security.
Slippage
The difference between the price you expect on a trade and the price you actually get, caused by the market moving or by thin liquidity. Setting a slippage tolerance caps how much worse a fill you'll accept.
Smart Contract
Self-executing code stored on a blockchain that runs automatically when its conditions are met, with no middleman. Smart contracts power DeFi, NFTs, and DAOs — but a bug or malicious design in one can drain funds.
SPL Token
The token standard on the Solana blockchain, equivalent to Ethereum's ERC-20. SPL tokens share a common format so Solana wallets and apps can handle them uniformly.
Spot
Buying or selling an asset for immediate delivery at the current price, using your own money and actually owning the coin. It contrasts with derivatives like futures or perpetuals, where you trade on price without holding the asset.
Stablecoin
A token designed to hold a steady value, usually pegged to a fiat currency like the US dollar (USDC, USDT). Traders use them to park value, move between trades, and avoid volatility without leaving crypto.
Staking
Locking up tokens to help secure a proof-of-stake network, earning rewards in return much like interest. Some staking locks your tokens for a period, during which you can't sell.
T
Token
A digital asset issued on top of an existing blockchain via a smart contract, rather than having its own chain. Tokens can represent currency, governance rights, access, or ownership of almost anything.
Tokenomics
The economic design of a token — its supply, distribution, emission schedule, and incentives. Good tokenomics align a project's long-term health with its holders; bad tokenomics concentrate supply or reward insiders at buyers' expense.
Total Supply
The number of tokens that currently exist, including locked and reserved ones, minus any that have been burned. It sits between circulating supply and max supply.
Testnet
A practice version of a blockchain that mirrors the real network but uses valueless tokens, letting developers test contracts and users try features risk-free. Its counterpart is the mainnet, where real value moves.
Transaction (TXID)
Any action recorded on a blockchain, such as sending tokens or interacting with a contract. Each one gets a unique transaction hash (TXID) you can paste into a block explorer to look up its status and details.
TVL (Total Value Locked)
The total value of assets deposited in a DeFi protocol, used as a rough measure of its size and user trust. Rising TVL suggests growing confidence; a sudden drop can signal an exodus or an exploit.
U
Unlimited Approval Exploit
An attack that abuses a token approval you previously granted, letting a malicious contract drain the approved tokens whenever it wants. Regularly reviewing and revoking old approvals limits the damage.
V
Validator
A participant in a Proof of Stake network that stakes tokens to verify transactions and produce new blocks, earning rewards for honest work and losing stake for misbehavior. Validators are the PoS equivalent of miners.
Vesting
A schedule that releases a team's or investor's tokens gradually over time instead of all at once. Vesting discourages insiders from dumping on day one, but large upcoming unlocks can still pressure the price.
Volume
The total amount of an asset traded over a given period, usually 24 hours. High volume signals strong interest and liquidity; suspiciously high volume on a tiny token can be faked ("wash trading") to lure buyers.
W
WAGMI
"We're All Gonna Make It," an optimistic rallying cry expressing collective confidence and solidarity in a community. Its pessimistic counterpart is "NGMI" — "Not Gonna Make It."
Wallet
Software or hardware that stores the private keys used to access and move your crypto. The wallet holds your keys, not your coins — the coins always live on the blockchain. Learn how crypto wallets work.
Web3
A vision of the internet built on blockchains, where users own their data and assets through wallets instead of relying on big platforms. It contrasts with "Web2," the era of centralized apps and accounts.
Whale
A holder with enough crypto to move the market when they buy or sell. Whales' large positions can spark big price swings, so traders watch whale wallets for clues.
Whitepaper
A document a project publishes to explain its technology, token design, and goals. A serious whitepaper signals substance, but scammers write polished ones too — read critically rather than taking claims at face value.
Wrapped Token
A token that represents another asset on a different chain at a 1:1 value, like Wrapped Bitcoin (WBTC) on Ethereum. Wrapping lets an asset be used in ecosystems where it doesn't natively exist.
Y
Yield Farming
Moving crypto between DeFi protocols to chase the highest returns from lending, staking, and liquidity rewards. It can be lucrative but stacks risks — smart-contract bugs, impermanent loss, and token price crashes.
Z
zk-Rollup
A Layer 2 that bundles transactions and uses a cryptographic "zero-knowledge" proof to instantly verify they're valid before posting to the base chain. Compared with optimistic rollups, zk-rollups offer faster finality and quicker withdrawals.
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