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Glossary of Web3 Terminology

There are a lot of technologies, processes, and fine details that lay at the heart of Web3, DeFi, and cryptocurrency. This glossary intends to be a useful tool that you can come to if you found a word somewhere that you don't know but feel you maybe should.

BEP20: A technical standard that determines how tokens are transferred and how data is accessed on the BNB Smart Chain.

Binance Coin (BNB): Binance Exchange's native cryptocurrency, used to pay fees for transacting and trading on the platform.

Binance DEX: The decentralized exchange (DEX) built by Binance (separate from the centralized exchange at

BNB Chain: A merge of two separate chains established by Binance: the BNB Beacon Chain (formerly Binance Chain) and BNB Smart Chain (formerly BSC).

Blockchain: A digital ledger of transactions that is distributed and replicated across a network of computer systems (i.e. decentralized).

Bonding curve model: A dynamic model that incentivizes users to deposit tokens into a smart contract that pays out on a regular basis. This ensures that the LP staking tokens are replenished in the staking pool after distribution.

CeFi: An intermediary between the fiat and crypto world that offers users some of the assurances of centralization (e.g. deposit insurance) while gaining exposure to the decentralized, blockchain-based financial world (DeFi).

CeDeFi: A marriage of DeFi and CeFi that utilizes decentralized mechanisms (such as DEXes) but offers a level of support to users that is not typical of most DeFi protocols.

Centralized Exchange: An exchange that facilitates transactions between buyers and sellers using the traditional order book approach (bid/ask price).

Cross-chain technology: A system or application that facilitates the transmission of data between blockchain networks that would otherwise operate in isolation.

Cryptocurrency Exchange: A marketplace that allows users to swap one type of token for another, or to sell their tokens in exchange for fiat currencies.

Decentralized: Decentralization refers to the transfer of control and decision-making from a centralized entity (individual, organization, or group thereof) to a distributed network.

Decentralized Applications (dApps): Applications that exist on a blockchain network, are based on smart contracts, and operate independently of any central authority.

Decentralized Exchange (DEX): A blockchain-native exchange that (unlike centralized exchanges) facilitates trades using algorithms rather than the traditional order book method.

Decentralized Finance (DeFi): An alternative financial system, based on a series of primitives (payments, lending, insurance, etc.) that replace trusted institutions with smart contracts and dApps, enabling users to transact peer-to-peer.

Embr Ecosystem: Your gateway to a decentralized world.

ERC20: A technical standard that determines how tokens are transferred and how data is accessed on the Ethereum blockchain.

Ethereum Virtual Machine (EVM): A software platform (like an OS) that allows developers to interact with the Ethereum blockchain to build and launch decentralized applications (DApps).

Fiat currency: A currency that is not backed by a physical asset, but by the “full faith and trust” of the government that issued it.

Fiat-to-token: The process of converting fiat currency (e.g. USD) to cryptographic tokens or vice versa on a cryptocurrency exchange.

Initial Coin Offering (ICO): A new crypto project markets and sells an allocated amount of its total token supply directly to (usually accredited) investors, typically without the use of an exchange.

Initial DEX Offering (IDO): The process of launching a new token on a decentralized exchange (DEX).

Interoperability: The ability for two or more blockchain networks to share information seamlessly.

Launchpad: A platform that facilitates the process of projects and companies listing new tokens for sale in initial offerings.

Liquidity: The ease with which an asset can be sold without affecting the market price.

Mining: The process of verifying and adding transaction records to a public ledger. Miners are typically compensated for their efforts with newly minted tokens.

Nonce: A random or pseudo-random number that is used once in a cryptographic transaction to ensure that the transaction is not repeated (e.g. as part of a cyber-attack).

Private key: A string of 64 alphanumeric characters that allows secure access to a crypto-wallet. The keyholder is the owner of the assets to which it grants access.

Proof of Stake (PoS): A consensus mechanism used to validate cryptocurrency transactions. As opposed to Proof of Work (PoW), compensation for validators is based on the number of native tokens held and is less energy-intensive.

Proof of Work (PoW): A consensus mechanism that requires participants to perform an intensive computational task (solving a mathematical puzzle) to validate transactions and add new blocks to the chain.

Scalability: The capability of a blockchain to handle a growing number of transactions and host an increasing number of nodes.

Smart contract: A self-executing contract with the terms of the agreement between two or more parties written in immutable code.

Stablecoin: A token that is backed by a non-volatile reserve asset (such as the US dollar), allowing it to maintain a steady value even when the market fluctuates.

Slippage: The difference between the price of a token when a trade is submitted and the eventual execution price.

Staking (traditional): A process whereby a token holder commits to ‘lock’ their tokens for a given period in return for a share of the network's rewards (similar to an interest-bearing deposit).

Staking (LP): A Liquidity Provider (LP) supplies a platform with a pair of currencies in return for a share of the platform’s proceeds (e.g. transaction fees, loan interest).

Token: A digital unit of value generated on a blockchain network. There are multiple varieties, including payment (monetary value), governance (voting rights), security (ownership rights), and non-fungible (art, music, etc).

Tokenization: The process of creating a cryptographic token that is linked to the value of an existing asset (e.g. real estate), thus increasing its liquidity.

Total Value Locked: A term specific to the crypto universe that denotes the total value of assets deposited on a given platform.

TPS (Transactions per second): A measurement of the speed of a blockchain network. It is calculated by dividing the number of transactions per block by the block time (time taken to create a new block).

Wallet: A hardware device or software application that stores private and/or public keys used to interact with blockchains, enabling a user to manage and store their crypto assets.

Updated on: 25/08/2023

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