Don’t know all the web3 words? There’s no shame in that. In the rapidly evolving world of web3, keeping up with terminology and definitions can be a challenge. To help, we’ve put together an in-depth glossary of web3 terminology.
If you’d like a term added or defined, hit us with a tweet at @SlashAuth.
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51% attack: A blockchain restructuring by malicious actors who own more than 51% of a cryptocurrency's total hashing or validating power
A
Airdrop: a marketing technique in which crypto projects send their native assets directly to the wallets of their users, often in an effort to increase awareness and adoption
Altcoin: initially used to refer to any cryptocurrency that wasn’t Bitcoin; may now refer to any new cryptocurrency with a relatively small market cap
Ape: someone who invests heavily into a cryptocurrency or stock, or the act of doing so; generally a self-assigned term, does not carry a negative connotation
B
Bitcoin: the very first decentralized, peer-to-peer, digital currency, created by the pseudonymous Satoshi Nakamoto in 2009
Blockchain: a distributed database shared among the nodes of a computer network; blockchains store a continuously growing historical ledger of information into blocks
Bridge: an application that connects two or more blockchains; bridges allow users to send digital assets from one network to another, also commonly referred to as "cross-chain" swapping
BscScan: the leading blockchain explorer for the Binance Smart Chain, built by the same team behind Etherscan
Bitcoin Flexible Leverage Index (BTC2x-FLI): leverages a collateralized debt position on bitcoin by targeting a long 2x exposure to bitcoin; enables market participants to take on leverage while minimizing the transaction costs and risks associated with maintaining collateralized debt
Buidl: meaning “build,” a common intentional misspelling used in crypto circles in reference to the term HODL
C
Candy Machine: a Solana-based program developed by Metaplex Studios that allows users to mint NFTs and set up digital art collections easily on the Solana blockchain
Centralized Finance (CeFi:): centralized businesses that participates in crypto
Centralized Exchange (CEX): a cryptocurrency exchange managed by a centralized business or entity
Chainlist: a list of Ethereum Virtual Machine (EVM networks); used to connect wallets and Web3 middleware providers to the appropriate chain ID and network ID
Coin: a cryptocurrency built on its own native blockchain, intended to be used as a store of value and medium of exchange within that ecosystem
Cold Wallet: an offline device used to store cryptocurrencies; generally a safer method of storing cryptocurrencies
Consensus: the state of agreement amongst the nodes on a blockchain; reaching consensus is necessary for new transactions to be verified and new blocks to be added to the blockchain
Consensus Mechanism: a process through which nodes on a blockchain come into agreement on a transaction or state of the network
D
Decentralized Autonomous Organization (DAO): an organization based on open-source code and governed by its users; DAOs typically focus on a specific project or mission and trade the traditional hierarchical systems of legacy corporations for guidelines written on the blockchain
Decentralized Application (dApp): an application built on a decentralized blockchain network using smart contracts and web3 javascript libraries; examples include web3 wallets, interest-bearing cryptocurrency savings accounts, and NFT marketplaces
Decentralized: a system that operates without the control of a central figure or authority, and replaces it with a distributed peer-to-peer network
Decentralized Finance (DeFi): an open financial system that doesn’t rely on centralized authorities or intermediaries to conduct financial activities, like trading, borrowing, lending, and investing
Decentralized Exchange (DEX): a type of crypto exchange that enables users to transact in a direct peer-to-peer manner without an intermediary
DraftCoin (DFT): a decentralized and open-source cryptocurrency that offers both private and transparent transaction types; DraftCoin payments are published on a public blockchain, but the sender, recipient, and value of a transaction remain private
E
Ethereum Improvement Proposal (EIP): a standard format for presenting a new feature or process to the Ethereum community
Ethereum Name Service (ENS): a distributed, open, and extensible naming system based on the Ethereum blockchain
Ethereum Request for Comments (ERC): a document that programmers use to write smart contracts on Ethereum Blockchain that includes rules Ethereum-based tokens must comply with
ERC-20: the most popular token standard; allows developers to create their own tokens on the Ethereum network and provides an easier route for companies to develop blockchain products instead of building their own cryptocurrency; examples include Tether USD (USDT) and Shiba Inu (SHIB)
ERC-721: an Ethereum token standard that allows for the formation of unique tokens; unlike the ERC-20 standard, ERC-721 tokens have specific properties that allow each to be uniquely identified and valued independently of one another; most NFTs take this form
ERC-1155: an Ethereum token standard that allows for fungible, non-fungible, and semi-fungible tokens to be managed by a single smart contract simultaneously. These are commonly used in gaming and collectible trading to reduce the number of necessary transactions
Ethereum: a decentralized, open-source blockchain network launched in 2015 by Vitalik Buterin; the leading smart contract-enabled blockchain in the world, serving as the foundation for decentralized applications.
F
Fork: a change to a blockchain’s protocol; when changes are minor, this results in a soft fork; when changes are more fundamental, this may result in a hard fork, leading to the formation of a separate chain with different rules
Foundation: a decentralized platform that facilitates live auctions of non-fungible tokens, specifically artists' digital artwork; uses Ethereum blockchain and smart contracts
Fractionalize: the process of locking an NFT into a smart contract, and then dividing it into smaller parts that are issued as fungible tokens; fractionalizing lowers the price of ownership and allows artwork and other digital assets to be owned by a community
Full Node: a blockchain node that stores the blockchain’s complete history, as well as verifies and relays transactions
G
Gas: a fee paid by a user to conduct a transaction or execute a smart contract on the Ethereum blockchain. This fee is dependent upon the transaction’s complexity as well as the current demand on the network
Genesis Block: the very first block of a blockchain network
Gwei: one of the smallest denominations of ETH that is equivalent to 1/1,000,000,000 of 1 ETH (1 ETH = 1,000,000,000 Gwei); it is the most commonly used alternative denomination for ETH and is often used when discussing gas prices
H
Hard Fork: a fundamental change to a blockchain that is not compatible with the existing protocol, requiring the formation of a new chain
Hashing: the process of taking an input of any size and producing a corresponding fingerprint of a fixed length; allows a set of data to be secured, stored, and recalled using a unique identifier code
Hash Rate: also referred to as hash power, this is the rate at which a computer can generate guesses to a cryptographic puzzle; hash rate can also refer to the overall power being used by the entire network on a proof of work (PoW) blockchain
I
Initial Coin Offering (ICO): the selling of tokens to the public to raise capital for a crypto-based project; ICOs are a crowdfunding approach, similar to a traditional company’s IPO
Initial Exchange Offering (IEO): a method of selling tokens to raise capital, but with increased regulation; managed by an existing, known, and trusted cryptocurrency exchange to make the ICO process more secure
J
K
KlimaDAO: a Decentralized Autonomous Organization (DAO) aiming to drive climate action via a carbon-backed, algorithmic currency, the KLIMA token
L
Layer 1 (L1): the main blockchain in a multi-level blockchain network; also referred to as the base layer, mainchain, or mainnet; Ethereum, Fantom, and the Bitcoin blockchain are all layer one blockchains
Layer 2 (L2): a secondary framework or protocol that is built on top of an existing, layer 1 blockchain; layer 2 blockchains typically improve transaction speeds, cost efficiency, scalability, and privacy, and add cross-chain communication; Bitcoin Lightning Network and the Ethereum Plasma are examples
Light Node: a blockchain node that downloads just enough data from the blockchain to process and verify transactions; unlike full or master nodes, light nodes do not store a blockchain’s complete history
M
Mainnet: short for main network, this is a main layer 1 blockchain, as opposed to a testnet or layer 2 solution
Master Node: a blockchain node that verifies and relays transactions, stores the blockchain’s complete history, and may participate in voting, governance of the blockchain, and other special operations.
MetaMask: an Ethereum crypto wallet providing access to the web3 ecosystem
Million Token: a multi-chain cryptocurrency with a limited supply of 1,000,000 total tokens, pegged to a minimum value of 1.00 USDC each with no upper bound.
Mining: the process of verifying transactions, organizing them into blocks, and then adding blocks to the blockchain in a Proof of Work system; participants who perform this process are called miners
Minting: the process of validating information, such as domain ownership, and registering that onto the blockchain
N
Next.js: an open-source web development framework created by Vercel enabling React-based web applications with server-side rendering and generating static websites
Node: any device connected to a blockchain network; different nodes have varying levels of responsibility, and may help validate transactions, store the blockchain’s history, relay data, and perform other functions. Because blockchains are distributed peer-to-peer networks, nodes come together to create the network’s infrastructure
Non-Fungible Token (NFT): a digital asset based on Ethereum's ERC-721 token standard that can be used to represent ownership of a variety of digital assets including art, photography, music, and more
NFT Domains: domains that live on a public blockchain and give users complete ownership of their stored data; they simplify crypto transactions by replacing wallet addresses with the domain name
O
Opensea: An application programming interface (API) that provides a set of endpoints that enables users to fetch ERC721 and ERC1155 token metadata, as well as other core elements of the Opensea marketplace, including events, collection, listings, offers, and more.
Oracle: a service supplying smart contracts with data from the outside world; smart contracts are unable to access data that exists off-chain, so they rely on oracles to retrieve, verify, and provide external information
P
Proof of Attendance Protocol (POAP): a digital bookmark for your life; POAPs are minted as NFTs to your account or wallet and used to mark participation or attendance at an event
Proof of Stake (PoS): a decentralized consensus mechanism where selected validators stake the blockchain’s native currency in exchange for rewards they earn from validating transactions; PoS consensus economically incentivizes participants to behave correctly
Proof of Work (PoW): a decentralized consensus mechanism that requires network participants to spend computational power and energy to generate new valid blocks. Bitcoin uses PoW to secure transactions on the Bitcoin network.
Private Key: an alphanumeric passcode required to withdraw assets from a blockchain wallet, create digital signatures, decrypt messages or files, and authorize digital transactions; because private keys are long and difficult to memorize, wallets will generally associate them with a seed or recovery phrase that is easier to remember
Public Key: a long numerical sequence commonly used to encrypt data or verify the authenticity of a digital signature, derived from and paired with a private key that allows for funds and assets to be accessed
Q
R
Rollup: a scaling solution that aims to improve transaction throughput and decrease fees by batching multiple transactions off-chain and then submitting them to the main chain as a single transaction
Remote Procedure Call (RPC) Node: a type of computer server that allows users to read data on the blockchain and send transactions to different networks; nodes enable the components that make up a Dapp to interact with each other and transmit information between clients and servers
S
Satoshis/Sats: the smallest denomination of BTC, equal to 0.00000001 bitcoin. Satoshis are named after Bitcoin’s pseudonymous creator, Satoshi Nakamoto
Seed Phrase: a string of words used as a master password to access a crypto wallet; because a single wallet can contain multiple accounts, all with their own private keys, a seed phrase makes it easy to access them all with the same password
Secure Hash Algorithm 256-bit (SHA-256): a set of cryptographic hashing functions that takes an input of data and generates a long sequence of letters and numbers as a secure placeholder for the data it represents; SHA 256 is a part of a joint effort between the NSA and NIST wherein the final hash digest value will always be 256 bit
Sharding: a method of separating a network’s nodes out into smaller groups (shards) in an attempt to increase scalability; shards are then able to reach consensus on behalf of the entire network, removing the need for every node to process every transaction
Shibarium Blockchain: a Layer 2 blockchain scaling solution aimed at enhancing the workings of Shiba Inu’s host chain, Ethereum; Shiba Inu is an Ethereum-based altcoin widely considered to be an alternative to Dogecoin
Sidechain: a blockchain that allows tokens from one blockchain to be securely used within a completely separate blockchain, but still move back to the original chain if necessary
Smart Contract: a piece of code that executes according to its instructions exactly like a traditional contract between two people would be executed; used by developers to build decentralized applications on blockchain networks and enable users to transact in a secure way.
SlashAuth: That's us. We snuck in here. We provide web3 authentication and multi-level token gating for dApps.
Soft Fork: a backward-compatible update to a blockchain; unlike a hard fork, these changes do not require the creation of a separate chain
Solana: Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world
Solidity: the native programming language of Ethereum, mainly used to write smart contracts
Soul Bound Tokens (SBTs): non-transferable tokens that are account bound and are made to represent non-financial identity markings of a person
Staking: the act of locking up an asset to provide security to the network by validating blocks on the blockchain to ensure transactions are legit. Similar to mining on a POW chain, staking is the equivalent for a POS chain.
Starlink Crypto: Starlink (STARL) is a blockchain-based interactive metaverse space for games, socializing, and exchange, and the first decentralized virtual space development project; STARL, the native token of the network, is an ERC20 token
T
Token Gating: a common tool used by NFT project teams to create value for community members; allows projects to reward people who hold their NFTs by creating exclusive content, events, and other benefits available only to token holders
Test network (testnet): a software environment that mimics a mainnet blockchain, where developers can test network upgrades and smart contracts before deploying them to the mainnet
Token: unlike a coin, a token is a digital asset created on an existing blockchain; tokens can be used to represent digital and physical assets, or to interact with dApps
Transactions per Second (TPS): the number of transactions that a blockchain can handle per second, used as a benchmark to measure its computational power
Traditional Finance (TradFi): traditional retail, commercial, and investment banks, and FinTechs
Transaction: data written to a blockchain; new transactions are verified by nodes on the network and then broadcast to other nodes; once enough nodes have verified a transaction, it is considered valid and added to a block
Transaction Hash/Transaction ID (Txn Hash): a unique identifier used to represent a specific transaction, written as a long string of letters and numbers; by pasting a txn hash into a block explorer like Etherscan, you can find the details of the transaction it represents
U
V
W
Wallet: a software application or hardware device used to store the private keys to blockchain assets and accounts that prove ownership of a given digital asset
Wallet Address: a randomly generated string of characters connected to a blockchain wallet and used to receive cryptocurrency transactions to that wallet; the format depends on the cryptocurrency
Web3: the current evolution of the internet, characterized by decentralization and digital ownership; Web 1.0 and Web 2.0 were characterized by users being able to read and write content, respectively
Web3 Auth: a pluggable auth infrastructure for Web3 wallets and applications that streamline the onboarding of both mainstream and crypto native users; results in a standard cryptographic key provider specific to the user and application with support for all social logins, web & mobile native platforms, wallets, and other key management methods
Web3 Login: better known as web3 authentication; a login tool using crypto addresses that allows users to connect to a specific network and interact with authenticated users; it’s required for every web3 dApp
