In the world of blockchain, cryptocurrency, and DeFi, newcomers may encounter a plethora of specialized terms. Phrases like 'staking,' 'Layer2,' or 'yield farming' might seem daunting. This article aims to guide you through this new financial environment.
Introduction to Crypto and DeFi
Every new industry has its own language. This glossary of 100 essential terms will help you confidently navigate discussions, understand news, and explore opportunities in DeFi.
Key Terms A-C
1. Address: A unique string of characters representing your account on a blockchain.
2. Airdrop: A method of distributing free tokens to users.
3. AMM (Automated Market Maker): A decentralized exchange mechanism using liquidity pools.
4. APY (Annual Percentage Yield): The projected annual return on an investment.
5. Arbitrage: A trading strategy exploiting price differences of the same asset across multiple platforms.
Terms D-I
21. DEX Aggregator: A tool that scans various decentralized exchanges to find the best prices.
22. DLT (Distributed Ledger Technology): The underlying technology of blockchains.
23. Double Spending: The risk of spending the same digital asset more than once.
24. Dusting Attack: A tactic used to trace and de-anonymize users.
25. Derivatives: Financial contracts deriving value from underlying assets.
Education is the foundation of participation in the world of Crypto and DeFi. Understanding these terms will enable you to evaluate risks and opportunities in this rapidly evolving sphere.
