Summary of abbreviations and crypto words/terms.
A raw material or primary agricultural product that can be bought and sold, such as gold or coffee.
A decentralized exchange (DEX) is a type of marketplace that connects cryptocurrency buyers and sellers. In contrast to centralized exchanges (CEX), decentralized platforms are non-custodial, meaning a user remains in control of their private keys when transacting on a DEX platform.
DOX or doxing is the act of publicly providing personally identifiable information about an individual or organization on the internet.
Governance tokens are a type of cryptocurrency that allow token holders to vote on the direction of a blockchain project. The primary purpose of governance tokens is to decentralize decision-making and to give holders a say in how the project is run.
Impermanent Loss (IL)
When a token price rises or falls after you deposit it in a liquidity pool, this is known as crypto liquidity pools' impermanent loss.
Know your customer. Although used in technically the wrong setting most of the time, the term is used to represent how founders/owners of a project will go through a process of semi-doxing themselves to a group and/or association who will report them to authorities if any malicious activity were to ever occur within the project.
Liquidity Pool
A Liquidity Pool is the combination of 2 or more tokens in a pool that allows people to trade and acquire the tokens in said pool. If there is a small amount of liquidity it will be hard to trade, you will suffer a slippage loss, and the price impact will fluctuate drastically. If there is a large amount of liquidity then it will be an easy trade where you will face almost no slippage loss and low price impact fluctuation.
Multi-Sig Wallet
A MultiSig wallet uses more than one private key to authorize crypto transactions. They can also be configured to allow each in the set of private keys to generate a signature. Holding private keys in different locations enhances security, while allowing multiple keys to sign a transaction improves usability.
Over-collateralization (OC) is the provision of collateral that is worth more than enough to cover potential losses in cases of default. It is used to effectively manage risk and involves placing an asset as collateral on a loan where the value of the asset exceeds the value of the loan.
Protocol-owned liquidity. Meaning the majority, if not all, of the project token liquidity, is owned by the project itself. Many projects have a mixture of protocol-owned and participant-owned liquidity.
Smart contract
Smart contracts are code written into a blockchain that executes the terms of an agreement or contract from outside the chain. It automates the actions that would otherwise be completed by the parties in the agreement, which removes the need for both parties to trust each other.
Yield Farming
Yield farming is a method of earning rewards or interest by depositing your cryptocurrency into a pool with other users. The pooled funds are used to carry out smart contracts such as cryptocurrency lending that generates interest in return.