Crypto glossary

Plain-English definitions for the words traders actually use.

A

• APY Annual percentage yield — a projected yearly return including compounding.
• Audit A security review of smart-contract code.

B

• Bitcoin The first major cryptocurrency — a scarce digital asset with a public blockchain.
• Blockchain A shared ledger of transactions grouped into blocks.
• Bridge Infrastructure that moves value between blockchains.

C

• Cold wallet A wallet kept offline for safer long-term storage.
• Counterparty risk The risk that an exchange, custodian, or other venue fails to deliver assets you are owed.
• Custody Who holds the keys to an asset.

D

• DeFi Decentralized finance — lending, trading, and yield using smart contracts.

E

• Ethereum A smart-contract blockchain used for apps, tokens, and DeFi.
• Exchange A venue that matches buyers and sellers of crypto.

F

• Fully diluted valuation Price times maximum or total planned supply.
• Funding rate A periodic payment between long and short traders in perpetual futures.

G

• Gas fees Transaction fees paid to use a smart-contract network like Ethereum.

H

• Halving A scheduled cut in Bitcoin's block subsidy roughly every four years.
• Hot wallet A wallet on an internet-connected device.

L

• Layer 2 A network that settles to a base chain to scale activity and lower fees.
• Liquidation Forced closure of a leveraged position when margin runs out.
• Liquidity How easily you can buy or sell without moving the price a lot.

M

• Market cap Roughly price multiplied by circulating supply.
• Market depth How much buy and sell size sits near the current price in a book or pool.
• Market structure How trading actually works: venues, liquidity, incentives, and flow.
• Memecoin A token driven mainly by attention and culture, not cash flows.

N

• NFT A non-fungible token — a unique on-chain item.

O

• Off-chain Activity that happens outside the blockchain ledger.
• On-chain Data or activity recorded directly on a blockchain.
• Oracle A service that brings off-chain data (like prices) on-chain.
• Order book The list of open buy and sell orders on a venue.

P

• Perpetual futures Futures contracts without an expiry date, common in crypto.
• Proof of stake A consensus model where validators stake capital instead of mining with energy-heavy hardware.
• Proof of work A consensus model where miners expend computation to secure the network.

R

• Range trading Trading inside a band of support and resistance instead of chasing a breakout.

S

• Seed phrase A list of words that backs up a crypto wallet's keys.
• Self-custody Holding your own keys instead of leaving assets on an exchange.
• Slippage The difference between the price you expect and the price you get.
• Smart contract Code that runs on a blockchain and can hold or move assets under rules.
• Spot ETF An exchange-traded fund that holds the underlying asset (e.g. Bitcoin) rather than futures only.
• Stablecoin A token designed to track a stable value, often the US dollar.
• Support and resistance Price zones where buying or selling has repeatedly shown up.

T

• Token unlock When vested or locked tokens become transferable.
• TVL Total value locked — assets deposited in a DeFi protocol.

U

• USDC USD Coin — a major dollar-pegged stablecoin.
• USDT Tether — a widely used dollar-pegged stablecoin.

W

• Wallet Software or hardware that stores keys and helps you sign transactions.