Crypto Glossary
Plain-English definitions of the terms you'll encounter when reading crypto whitepapers, analyzing DeFi protocols, and evaluating blockchain projects. Each entry links to a full explanation with examples and FAQs.
- TokenomicsThe economic model of a cryptocurrency — supply, distribution, vesting schedules, and token utility.
- BlockchainA distributed ledger secured by cryptography and maintained by a decentralized network of nodes.
- Smart ContractSelf-executing code deployed on a blockchain that runs automatically when conditions are met.
- DeFi (Decentralized Finance)Financial services — lending, trading, yield — built on public blockchains using smart contracts.
- DEX (Decentralized Exchange)A protocol for swapping tokens directly from your wallet using automated market maker smart contracts.
- Layer 1The base blockchain that provides consensus and security — Bitcoin and Ethereum are Layer 1s.
- Layer 2A scaling network built on top of a Layer 1 that processes transactions faster and cheaper.
- StablecoinA cryptocurrency designed to maintain a fixed value — usually $1 USD — through reserves or algorithmic mechanisms.
- Proof of WorkBitcoin's consensus mechanism: miners expend energy solving a cryptographic puzzle to earn the right to add blocks.
- Proof of StakeEthereum's consensus mechanism: validators lock up cryptocurrency as collateral to propose and attest blocks.
- DAOA decentralized autonomous organization governed by token holders through on-chain voting.
- NFT (Non-Fungible Token)A unique token on a blockchain that proves ownership of a specific digital item.
- Yield FarmingDeploying crypto assets across DeFi protocols to maximize returns through lending, LP fees, and token incentives.
- AirdropA token distribution to wallet addresses — often as a retroactive reward for early protocol usage.
- WhitepaperThe founding technical document of a blockchain project outlining its technology, tokenomics, and roadmap.
- How to Read a WhitepaperA practical guide to evaluating crypto whitepapers — what to read, what to skip, and what red flags to watch for.
- Gas FeesThe computation fees paid to validators on a blockchain — why they spike, how EIP-1559 changed them, and how Layer 2 cuts costs by 90%+.
- Crypto WalletA tool that stores private keys and signs transactions — hot vs cold, custodial vs non-custodial, and how seed phrases work.
- StakingLocking crypto as collateral to help secure a proof-of-stake network in exchange for rewards — validator delegation, slashing, and realistic APY ranges.
- MiningThe process of solving cryptographic puzzles to earn block rewards and secure proof-of-work blockchains — how hash puzzles, halving, and mining pools work.
- Bridge (Cross-Chain)A protocol that moves assets between blockchains that cannot natively communicate — how lock-and-mint works, trust assumptions, and why bridges are frequently hacked.
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