Getting into the Web3 space can seem daunting at first since it’s a whole other side of the internet. Each country has its own language and slang, and the Web3 land is filled with terms and connotations that newcomers might find confusing at first. People are Apeing in? Blockchain’s scalability is an issue? ENS? Gwei? P2P? EVM? Where does it end? Don’t FUD my fren, we’ve combined in an ultimate Web3 glossary all the Web3 terms and lingo you’ll need to look like you actually know what you’re saying! LFG!
Web3 Terms Glossary
Blockchain
A
Algorand
A layer 1 proof-of-stake blockchain founded in 2019. Its native token is ALGO and is used to secure the Algorand blockchain and pay processing fees for Algorand-based transactions.
Arbitrum
A layer 2 Ethereum scaling solution that uses rollups to combine multiple transactions into one, which lowers transaction costs and increases scalability.
Authority
The given authority for an entity or a node to sign on-chain transactions.
Avalanche
A layer 1 proof-of-stake blockchain founded in 2020. Its native token is AVAX.
B
Block
A batch of transactions or data written into the blockchain. Each block links to the previous block to form a chain of transactions, thus a blockchain.
Blockchain
A decentralized digital ledger that stores and transfer information without the need for a central authority. The blockchain functions as a distributed database that is shared in a peer-to-peer network across several nodes. It’s the basis for all cryptocurrencies such as Bitcoin and Ethereum and for Non-fungible Tokens (NFTs).
Block Explorer
A software or a browsing tool that visualizes blocks, transactions, hash rates, market caps, wallet addresses, and more.
Block Size
The capacity or the specific number of transactions that a single block can carry.
Block Time
The time it takes for miners or validators to create a new block of transactions.
Bridge
A protocol that bridges between two blockchains, allowing the transfer of NFTs, tokens, and other data between systems.
C
Cancel Transaction
A cancel transaction happens when a user creates an identical transaction with a higher gas fee in the hopes of it being mined faster. Therefore, when miners validate this replacement transaction, the old transaction gets canceled.
CeFi-Centralized Finance
The process of selling and buying cryptocurrencies, acquiring loans, and earning interest using a centralized institution.
Celo
A layer 1 proof-of-stake blockchain that supports stablecoins. Founded in 2020 and has the native token CGLD.
Centralized
A system based on a hierarchy where control is placed in the hands of a small group of entities.
CEX-Central Exchange
Central cryptocurrency exchange platforms that act as an intermediary between buyer and seller. Popular CEX examples are Binance, Coinbase, and Gemini.
Cluster
A set or cluster of validators that work together to process transactions and monitor a blockchain’s integrity.
Consensus
The state of agreement amongst a decentralized network. Reaching consensus is vital in a blockchain in order to validate blocks and avoid double-spending.
Consensus Mechanism
The type of process that a network of nodes utilizes to reach an agreement on the state of the network.
Cross-chain
The process of bridging between multiple blockchains to allow data transfer.
D
DAO-Decentralized Autonomous Organization
A community-led organization with no central authority. Its rules are completely autonomous, and transparent and are conducted by smart contracts.
Dapp-Decentralized Application
Distributed and open-source digital application that runs on the blockchain. It’s built on a decentralized network with no central authority. Combines smart contracts and front-end user interfaces.
Difficulty
The amount of computing power needed to verify transactions and mine blocks on a proof-of-work blockchain.
Difficulty Bomb
A process used to motivate the transfer from a proof-of-work consensus to a proof-of-stake by increasing the complexity of the hashing puzzle, thus increasing the computational power needed.
Double-Spend
A Web3 term that refers to a flaw in digital currency protocols. It happens when the same digital token is spent more than once. This can happen when a person alters the blockchain by spending a token and reinserts the same transaction to reacquire the cryptocurrency.
E
EIP-Ethereum Improvement Proposal
A platform for the Ethereum community where users can submit proposals for network changes or upgrades in the blockchain.
ENS-Ethereum Naming Service
An Ethereum domain naming protocol (ENS) that allows customers to create human-friendly and readable crypto wallet addresses or decentralized websites.
Ethereum
An open-source layer 1 blockchain founded in 2015. Its native currency is ETH. It’s the leading smart contract blockchain that serves as a foundation for decentralized applications and allows users to deploy self-executing smart contracts.
Ethereum 2.0
The term given for Ethereum after switching from a proof-of-work consensus mechanism to proof-of-stake. Also known as Ethereum Merge.
EVM-Ethereum Virtual Machine
A software that executes smart contracts and computes the state of the Ethereum blockchain after each added block.
F
Fantom
A layer 1 proof-of-stake blockchain founded in 2018. Its native token is FTM and uses asynchronous consensus mechanisms for scalability issues.
Fault
A fault is when an unwanted or wrong action is made by someone in the blockchain mechanism.
Fork
A change in the main blockchain that generates two separate blockchains. This happens usually when miners disagree on the state of the ledger.
G
Gas Fee
The fee that a user must pay in ETH to complete a transaction on the Ethereum blockchain. Gas fees are used to compensate miners for providing the computational power or effort put into the process of validation.
Genesis Block
The very first block on a blockchain.
Gwei
A gwei is one-billionth of one ETH. It is most commonly used to specify Ethereum gas prices.
H
Hard Fork
A major change in a blockchain that is incompatible with the existing version which makes the ledger diverge into 2 separate blockchains. This happens when nodes add new rules that conflict with the current blockchain protocol.
I
Internal Transaction
A transaction that occurs between one smart contract and another smart contract.
Impermanent Loss
The change in the price of a token from between the time a user first deposit it in a liquidity pool and the time a user withdraws it.
L
Layer 1
The main network of a blockchain or the blockchain itself. For example, Ethereum, Bitcoin, Solana, and Cardano are layer 1 blockchains. It is also referred to as mainchain, base layer, or mainnet.
Layer 2
Protocols or solutions that are built on top of an existing lawyer layer one blockchain. Layer 2 blockchains usually improve transaction speed and cost efficiency, and are secured by the underlying mainchain.
Light Node
A blockchain node that does not store the blockchain’s entire history. Instead, a light node downloads enough data to process and verify transactions.
Liquidity
The measure of how easily you can convert an asset to another asset or cash without affecting its market price.
Liquidity Pool
A collection of funds locked in a smart contract. Users can pool their assets in a decentralized exchange’s smart contract to provide liquidity for traders. The more assets in a pool, the more liquidity the pool has, and thus, the easier it is to trade on a certain exchange.
Liquidity Provider
A user that deposits assets to a liquidity pool in exchange for earned benefits.
M
Mainnet
Short for the main network. A mainnet is a layer 1 blockchain.
Mempool
A transaction pool that stores pending transactions before they are mined.
Merkle Tree
A hash tree that acts as a data structure to secure and validate large data sets in a blockchain.
Metaverse
A shared immersive 3D virtual space where humans experience life and interact with each other as avatars in a computer-generated environment. Users can access the metaverse through technologies such as virtual reality and augmented reality.
Mining
A process used in a proof-of-work consensus where miners try to solve cryptographic hashing puzzles in order to validate and add a block to the blockchain. Miners validate these blocks in exchange for token rewards.
N
Node
A computer or device connected to a blockchain network that maintains consensus, and validates, processes, broadcasts, and stores transactions. Also, nodes create the infrastructure of a peer-to-peer blockchain.
O
Off-Chain
Transactions or data that exist outside of the blockchain. Since transactions that are committed on the blockchain are expensive, third-party tools or layer 2 solutions execute a large batch of transactions off-chain before adding them to the blockchain.
On-Chain
Transactions or data that are conducted on the blockchain and are visible to all nodes within the network.
Oracle
A service that enables smart contracts to access off-chain data.
Optimism
A layer 2 blockchain that functions on top of Ethereum. Founded in 2019, Optimism’s goal is to increase transaction speed for a lesser cost.
P
P2E-Play to Earn
P2E are blockchain-based games that allow players to receive tokens by completing in-game tasks.
P2P-Peer to Peer
A decentralized network of interconnected devices that collectively store and share files between them without the need for a central authority. Each device or computer consists of a node making it a “peer”, hence a peer-to-peer network.
PoA-Proof of Authority
A consensus mechanism that only allows approved nodes or validators to validate transactions.
POAP- Proof of Attendance Protocol
A non-fungible token (NFT) that proves someone attended a virtual or a physical event. It’s a badge of recognition for being present in a certain real-life event.
PoH-Proof of History
A consensus mechanism that timestamps transactions with a hash that guarantees where in time the transaction occurred as valid.
Polygon
A layer 2 proof-of-stake blockchain founded in 2020. Its native token is MATIC and its goal is to create a multi-chain blockchain ecosystem compatible with Ethereum.
PoS-Proof of Stake
A consensus mechanism where validators stake their funds for a random chance to validate a block.
PoW-Proof-of-Work
A consensus mechanism where miners need to compete with each other by solving complex mathematical puzzles using high-powered computers. The one that ‘wins’ the competition by providing the right answer, and therefore, submits his version of the ledger.
R
Rent
The cost to store data on a blockchain.
Rollup
The process of batching transactions off-chain and submitting them as a single transaction to the main chain. This process is used to improve scalability and decrease transaction costs.
S
Scalability
Refers to how well a system can manage increasing amounts of data. In a blockchain sense, scalability is how much a blockchain’s protocol can handle high demand and increase transaction throughput.
Sharding
A web3 term that refers to the process of splitting the blockchain into smaller pieces called shards. These shards consist of a small number of nodes that agree on a consensus, eliminating the need for every node to validate a transaction.
Slashing
A penalty for offending validators that consist of taking away their staked crypto.
Slippage
When a crypto price changes between the time an order is made and the time an order is executed.
Side Chain
A Web3 term that refers to a separate blockchain network that connects to the mainnet or parent blockchain via a two-way peg. Its goal is to solve the main blockchain’s scalability problem
Smart Contract
Self-executing code stored on a blockchain. Smart contracts execute transactions without an intermediary when predetermined conditions are met.
Soft Fork
An update that happens in a backward-compatible way. The new update does not clash with the blockchain’s current state. Thus, the updated nodes can still interact with nodes that are not.
Solana
A layer 1 proof-of-history blockchain founded in 2020. Solana’s PoH consensus enables scaling and lowers transaction costs. Its native token is SOL.
Storage
Blockchain storage is a way of saving data in a decentralized network instead of centralized cloud storage.
T
Testnet
A software that mimics a blockchain or a newer version of the blockchain and is used to testing without risking real funds on the mainnet or main chain.
Transaction
Data transferred from one user to another in the form of asset or currency transactions. Each new transaction is broadcasted to the network and gets verified by nodes operating the blockchain. Once verified, the transaction gets added to a block on the main chain.
TPS-Transactions Per Second
A unit of measurement of how many transactions a blockchain can handle per second.
V
Validator
Usually a full node operator in a blockchain. A validator verifies transactions and adds new blocks to the blockchain.
W
Web1
The first iteration of the world wide web. This early version of the internet consisted of ‘read only’ static sites with little to no user intervention.
Web2
The second generation of the internet and the current one. Sites became ‘read and write’ where users could create and update information on pages. Moreover, this era witnessed the emergence of online shopping, social networking, and user-made content creation.
Web3
The next generation of the web is known as the “read, write and execute”, where decentralization is the main focus. And so, this next step of the internet is providing decentralized ledgers, IoTs, bots, semantic markups, and Dapps.
Web3 Domains
Just like Web2 domain names that turn IP addresses into human-readable names, however, web3 domains are minted on the blockchain. Web3 domains convert long strings of wallet addresses and website IPs into small and simple words.
#
51% Attacks
A Web3 term refers to an attack that targets the blockchain by having a single entity control half of the nodes operating the network. The attacker can then commit fraudulent transactions by disrupting the network.
Cryptocurrency/Cryptography
A
Address
A storage slot on a blockchain network that can send and receive cryptocurrencies or different digital assets.
Altcoin
Short for alternative coins. In the beginning, it referred to cryptocurrencies other than Bitcoin or Ethereum. Now it may refer to new coins with small market caps.
Alts
Short for altcoins.
AMM-Automated Market Maker
A market maker in traditional finance determines the price of a stock in a certain transaction. In cryptocurrencies, AMMs are used to automate this process by creating liquidity pools. The price of an exchange between two tokens is determined by the ratio of these two tokens. Hence, no intermediaries are necessary and the process becomes automated.
B
Bitcoin
The first decentralized digital currency to exist on a blockchain created by the pseudonymous Satoshi Nakamoto in 2009.
Burn
To remove (burn) one or destroy more tokens from a supply. This could also be done to other digital assets such as NFTs.
C
Cold Wallet
Also known as a hardware wallet, it is a physical storage of wallet private keys that is completely offline. Since this type of wallet is offline, it is extremely secure and difficult to hack.
Coin
Refers to a blockchain’s native token or cryptocurrency.
Cryptocurrency
A digital currency that is exchanged and verified on decentralized networks using cryptography such as a blockchain.
Cryptography
The study or practice of securing and encrypting private messages between parties.
Custodial Wallet
A digital wallet that is controlled by a third party. The platform that provides an online wallet, like Binance or Coinbase, owns the private keys to a user’s wallet. This is a less secure type of wallet since it requires the trust of an intermediary.
D
Digital Signature
A virtual signature that proves the owner of a private key is sending funds to another wallet. This process eliminates fraudulent behaviors.
E
ERC-Ethereum Request for Comments
A smart contract standard that acts as the basis of Ethereum-based smart contracts.
ERC-20
The smart contract standard for fungible tokens created using the ethereum blockchain. For example, fungible tokens using the ERC-20 standard include Tether USD (USDT), Shiba Inu (SHIB), and USD Coin (USDC).
ERC-721
The smart contract standard for creating non-fungible tokens known as NFTs. Unlike ERC-20, ERC-721 creates each token with unique characteristics which cannot be exchanged for another ERC-721 token.
ERC-1155
The smart contract standard that allows the efficient transfer of fungible and non-fungible tokens in a single transaction.
Encryption
The method of converting data into secret code that hides the true meaning of the information. Only authorized parties can decipher the encoded data back to readable content.
Entropy
A cryptography method to produce randomness. This is used when encoding private keys by randomizing strings or numbers to produce security keys.
Ether ETH
The native cryptocurrency for the Ethereum blockchain.
F
Fiat
Refer to currencies that are backed by the government and declared legal tender, unlike cryptocurrency which is decentralized. For example, Fiat includes Euro, US dollar, and yen.
H
Hash
A hash is a mathematical function that turns arbitrary input of data into an encrypted output. Thus, encoding and securing a set of data under encrypted code. Hashing functions act as the backbone of blockchain technology.
Hash Rate
The overall computing power being used to solve a hash function in a proof-of-work blockchain.
Hot Wallet
Also known as a software wallet, it is a physical storage of wallet private keys that is completely online. Since this type of wallet is always connected to the internet, it is prone to online attacks. However, unlike cold wallets, hot wallets are mostly free to use and an efficient way to conduct transactions.
M
Market Cap
As a Web3 term, market cap signifies the measure of a cryptocurrency’s total value based on its current market price. Moreover, It can be calculated by multiplying the current price of a token with the circulating supply.
Metamask
A cryptocurrency wallet that allows users to access Web3 Dapps and the access of Ethereum wallets through a browser extension or mobile app.
N
Non-Custodial Wallet
A digital wallet that is not controlled by a third party. Unlike custodial wallets, non-custodial wallets allow a user the sole owner of their private keys with no intermediaries.
Nonce
By English definition, a nonce is a number that can only be used once. Blockchain transactions use nonce values to encrypt transactions.
P
Private Key
A secret passcode that is used in cryptography as a security code that allows a holder to make cryptocurrency transactions and prove ownership of funds.
Public Key
A public identifier linked to a private key. The public key allows users to receive transactions.
S
Seed Phrase
A backup phrase or string of words to access a crypto wallet. One seed phrase can access multiple wallets with different private keys.
SHA-256
Secure Hashing Algorithm or SHA is a cryptographic hashing function. SHA-256 is a hash function that transforms data into a 256-bit value as a part of encryption.
Shitcoin
A Web3 term that means a weak and useless cryptocurrency.
SOL
The native cryptocurrency for the Solana Blockchain.
Stablecoin
Cryptocurrency pegged to another cryptocurrency, fiat money, commodities, or assets.
Staking
The process of locking digital assets on-chain in return for benefits. Staking means that a user deposits a cryptocurrency on a blockchain and then receives rewards for not selling it when it’s staked. Moreover, the duration an asset is staked is called the “lockup period”. The lockup period can vary from days to years.
T
Token
A digital asset created on an existing blockchain.
TVL-Total Value Locked
A measurement of the total value of cryptocurrency locked in a smart contract.
W
Wallet
A crypto wallet is a digital wallet that can be software or hardware that stores digital assets. Unlike real-life wallets, crypto wallets don’t store the actual currencies, instead, it stores the private keys that act as proof of fund ownership.
Wallet Address
The wallet address is the same as a public key. A wallet address acts like a bank account where users can receive transactions.
Wei
The smallest denomination of Ether. 1 ETH = 10^18 Wei.
Wrapped Token
A wrapped token is basically swapping one asset for another that has the same value. This is done through a smart contract or a blockchain that can store and send funds.
NFTs
A
Airdrop
A web3 term refers to a marketing strategy used by blockchain-based projects in which they send out (airdrop) their native token or NFTs directly to the wallets of their users.
Allowlist
A list of wallet addresses with exclusive NFT minting rights. Users get on NFT collections’ allowlists by being active in their community. Also known as Whitelist.
Alpha
Early insights or insider information about a Web3 project, usually insights about the value of a cryptocurrency or NFT collection.
ATH-All Time High
The highest sale price an asset has ever had.
ATL-All Time Low
The lowest sale price an asset has ever had.
Auction
An event where sellers list NFTs for sale to interested buyers who place their desired bids on the auction.
B
Bear Market
A bear market is a period of time where supply is greater than demand and prices decline. This period is difficult to trade in, especially for newcomers.
Bid Price
The highest price a buyer is willing to pay for a token or an NFT.
Bull Market
A period of time where demand is greater than supply and prices increase. Also known as a bull run.
C
CC0
Creative Commons Zero, or CC0, allows creators to classify their work as “no rights reserved”. That means that all creative work that falls under this agreement has no copyright.
D
Digital Twin
A virtual asset that accurately reflects a physical object. Digital twins are often sold alongside NFT collections as physical NFTs.
F
Flip
Refers to NFT flipping. Which is when investors mint or buy an NFT to later sell them at a secondary market, in the hopes of making a profit.
Floor Price
The lowest possible price you can purchase an NFT for in a market.
Fractionalize
Fractionalization is subdividing an asset into several pieces. Usually a method of converting an ERC-721 token (non-fungible) into multiple ERC-20 tokens (fungible).
Fungible
An interchangeable asset that could be exchanged for another asset of the same value. An asset that has no unique characteristics. For example, Bitcoin, Ether, and US dollars are fungible currencies.
G
Generative Art
Generative art is any artistic piece, such as music, literature, or visual graphics, that was made entirely or partially using an autonomous system and mathematical algorithms. Used usually to create NFT art.
I
IP-Intellectual Property
The rights given to a creator for an intangible or creative property.
M
Minting
By English definition, minting is the process of manufacturing coins using a kind of stamping. However, in a Web3 sense, minting is the process of registering an asset on the blockchain.
N
NFT-Non-Fungible Tokens
A digital certificate of authenticity or proof of ownership of a specific asset. Non-fungible means that no 2 NFTs can be regarded as equals or can be interchangeable for the same value.
Non-fungible
Non-interchangeable asset. An asset that has unique characteristics that distinguish it from another asset.
P
PFP
Profile picture.
Pump and Dump
A manipulation scheme where a creator of a currency or an NFT inflate or “pump” their value or price with the intent of selling or “dumping’” the asset and earning profit.
U
Utility
The functionality that a cryptocurrency or an NFT can provide.
#
1/1
An NFT that does not belong to a certain collection.
Web3 Slang
A
Ape
A Web3 term that refers to someone who invests heavily in a cryptocurrency or an NFT without much prior knowledge.
Ape In
To rush and invest in a cryptocurrency or an NFT project.
B
Bearish
An adjective used to describe a person’s pessimistic feeling about the state or value of a cryptocurrency or NFT. Therefore, feeling bearish about something means that a person believes it will decrease in value over time.
BUIDL
To ‘build’ or contribute to the blockchain and cryptocurrency ecosystem.
See HODL.
Bullish
A Web3 term used to describe a person’s optimistic feeling about the state or value of a cryptocurrency or NFT. Therefore, feeling bullish about something means that a person believes it will increase in value over time.
D
DD-Due Diligence
Conducting research on a certain token, NFT project, or any type of investment. Advice to ‘do your own DD before investing”.
Degen
Short for Degenerate. A Web3 term refers to a person that genuinely believes in a crypto project to an extreme degree and might get involved in risky bets.
Diamond Hands
Someone who holds onto their assets regardless of the market’s condition is said to have ‘diamond hands’.
DYOR-Do Your Own Research
Advice for conducting one’s own research before investing in a project or a cryptocurrency.
F
FOMO-Fear Of Missing Out
The fear of missing out on an opportunity. Often used in buying assets that have an increase in price.
Frens
Friends.
FUD
Abbreviation for Fear, Uncertainty, and Doubt. When a person doubts a certain project.
G
GM
Good morning. Commonly used in NFT communities and the Web3 sphere to promote positivity.
H
HFSP-Have Fun Staying Poor
A Web3 term aimed at a person that doesn’t believe in cryptocurrencies and the Web3 era in general.
HODL
To ‘hold’. Started as a typo in a tweet where someone said that they were holding their coins in a bearish market. Became an international Web3 term commonly used in developer spheres.
L
LFG
Abbreviation for Let’s Fucking Go.
M
Maxi
Someone who only believes in their crypto project/coin and thinks of it to be the best in the market.
N
NGMI-Not Gonna Make It
A term that refers to a certain project not succeeding due to complications. Also refers to individuals who made bad investments.
NFA
Not Financial Advice.
P
Paper Hands
A person who sells their asset as its price is falling is said to have ‘paper hands’. This is to say that a person is weak and can’t handle market volatility.
R
Rug Pull
A scam where a crypto or NFT project pulls the plug on the project and retracts with all community funds without providing what was promised. Such as, pulling the rug under a person’s feet.
Rekt
A Web3 term to describe the huge asset or token loss someone suffered as in “wrecked”.
S
Ser
An international and recognized misspelling of the word Sir used in crypto communities.
Shill
Shilling is the act of promoting or hyping up a crypto or NFT project in an attempt to create mass appeal. This is done by spamming the community on social media and is viewed as a bad strategy.
U
Up Only
A bullish Web3 term describing an asset or crypto project insinuating that it will only increase in value.
W
WAGMI
We’re All Gonna Make It. An optimistic term used in crypto community to build trust and motivate investors to be hopeful about a certain project.
Wen
A short version of ‘when’ used to ask about a specific event. For example, wen mint? wen airdrop? etc.
Wen Moon
A question meaning when will the value of a project increase or skyrocket.
Whale
A whale is an entity or a person that acquires or holds a large amount of cryptocurrency and therefore, can affect the market prices.
Web3 Development
A
ABI-Application Binary Interface
Allows smart contracts to interact with external applications.
Algorithm
The procedure of solving mathematical problems or performing computation.
Anchor
Programming language for Solana.
API-Application Programming Interface
A set of protocols for building applications. It’s an intermediary between applications that facilitates communication. In a blockchain sense, APIs connect to a blockchain node directly or through another server.
B
Binary Code
The use of binary digits 0 and 1 to represent data.
G
Geth
An Ethereum client built in Go programming language.
H
Hackathon
An event in which a large number or programmers meet to collaborate on computer programming activities.
S
Solidity
A programming language designed specifically for the Ethereum Network to employ smart contracts on the Ethereum blockchain.
SDK-Software Development Kit
A collection of software and programming tools, also known as a devkit.