3Web3 101
Appendix · Chapter A

Glossary

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Appendix A: Glossary

Alphabetical. Each entry is short; see the chapters for deeper explanations.

#A

  • Address: A public identifier used to receive assets.
  • Airdrop: Free token distribution, often used for promotion or user rewards.
  • AMM (Automated Market Maker): A DEX pricing mechanism using formulas instead of order books. See Chapter 12.
  • APY / APR: Annualized yield. APY includes compounding; APR does not.
  • Approve: A permission that lets a contract spend your token. A common phishing target.

#B

  • Bitcoin: The first major blockchain and the native BTC asset.
  • Blind signing: Signing data your wallet cannot explain. Avoid unless you truly understand the context.
  • Block: A batch of transactions added to a blockchain.
  • Blockchain: A public ledger maintained by a network. See Chapter 2.
  • Bridge: Infrastructure for moving assets between chains; useful but risky.
  • BRC-20: A token experiment on Bitcoin, structurally different from Ethereum tokens.

#C

  • CEX (Centralized Exchange): A company-run exchange such as Binance or Coinbase. See Chapter 14.
  • Coin: A chain's native asset, such as BTC, ETH, SOL. See Chapter 8.
  • Cold wallet: A wallet whose private key is kept offline or isolated. See Chapter 6.
  • Consensus: The mechanism a network uses to agree on valid blocks.

#D

  • dApp: Decentralized application using smart contracts.
  • DAO: Decentralized autonomous organization. See Chapter 13.
  • DeFi: Decentralized finance. See Chapter 11.
  • Depeg: When a stablecoin trades away from its target price.
  • DEX: Decentralized exchange. See Chapter 12.

#E

  • ENS: Ethereum Name Service, which maps names like alice.eth to addresses.
  • ERC-20: Fungible token standard on Ethereum/EVM chains.
  • ERC-721 / ERC-1155: NFT and multi-token standards on Ethereum/EVM chains.
  • EVM: Ethereum Virtual Machine. EVM-compatible chains can run Ethereum-style contracts.
  • EOA: Externally owned account controlled by a private key.

#F

  • Faucet: Site that gives free testnet tokens.
  • Farming: Providing assets to protocols to earn rewards.
  • FOMO / FUD: Fear of missing out / fear, uncertainty, and doubt.
  • Fungible: Interchangeable, like dollars or USDT.

#G

  • Gas: Network fee for on-chain operations. See Chapter 4.
  • Governance token: Token used for protocol or DAO voting.
  • Gwei: Unit for Ethereum gas price. 1 ETH = 1,000,000,000 Gwei.

#H

  • Hardware wallet: Dedicated device for protecting private keys.
  • Hash: A digital fingerprint of data.
  • Honeypot: Scam token that can be bought but not sold.
  • Hot wallet: Wallet with signing ability in an internet-connected environment.

#I

  • Impermanent loss: LP underperformance compared with simply holding assets after relative prices change.
  • IPFS: Decentralized file storage network often used for NFT metadata.

#K

  • KYC: Know Your Customer identity verification. CEXs usually require it; DEX protocols usually do not, but frontends may restrict access.

#L

  • Layer 1 (L1): Independent base blockchain such as Ethereum or Solana.
  • Layer 2 (L2): Scaling layer built on an L1. See Chapter 3.
  • Liquidation: Forced sale of collateral when a loan becomes too risky.
  • LP (Liquidity Provider): User who deposits assets into a liquidity pool.

#M

  • Mainnet: The live production blockchain network.
  • Mempool: Waiting area for unconfirmed transactions.
  • MEV: Maximal Extractable Value; profit from transaction ordering.
  • Meme coin: Token driven mostly by culture and attention.
  • Mint: Create a token or NFT on-chain.
  • Multisig: Account requiring multiple signatures to act.

#N

  • NFT: Non-fungible token. See Chapter 10.
  • Node: Computer participating in a blockchain network.

#O

  • Oracle: Service that brings off-chain data, such as prices, on-chain.
  • Order book: Buy/sell order matching system used by traditional exchanges and some DEXs.

#P

  • Permit / Permit2: Off-chain approval signature; gas-free but risky.
  • PoS: Proof of Stake, where validators stake assets to participate.
  • PoW: Proof of Work, where miners compete with computation.
  • Private key: Secret key controlling an address.
  • Public key: Cryptographic key related to an address and verification.

#R

  • Rebase: Token mechanism that changes balances according to rules.
  • Restaking: Reusing staked assets or staking receipts in additional protocols.
  • Rug pull: Project team drains liquidity or abandons a token.
  • revoke.cash: Common approval revocation tool.

#S

  • Seed phrase / Mnemonic: 12 or 24-word wallet recovery key.
  • Slippage: Difference between expected and executed trade price.
  • Smart contract: On-chain program that executes rules.
  • Snapshot: Off-chain voting tool using wallet signatures.
  • Stablecoin: Token that attempts to track fiat value, usually 1 USD. See Chapter 9.
  • Staking: Locking or delegating tokens to support a network or earn rewards.

#T

  • Testnet: Practice network with valueless tokens.
  • Token: Asset issued on a chain, distinct from a native coin.
  • TVL: Total Value Locked, a common DeFi size metric.

#U

  • USDC / USDT: Major fiat-backed stablecoins.
  • Uniswap: Major AMM-based DEX.

#V

  • Validator: PoS participant that proposes or validates blocks.

#W

  • Wallet: Tool for managing keys and signing transactions. See Chapter 5.
  • Web3: Internet model where users control accounts and assets. See Chapter 1.
  • wETH: Wrapped ETH that follows ERC-20 behavior. 1 wETH = 1 ETH.

#Z

  • ZK / Zero-Knowledge Proof: Cryptography that proves something without revealing the underlying data. Used by some L2s.

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