1. DeFi (Decentralized Finance) – A system by which financial products become available on a public decentralized blockchain network, making them open to anyone to use rather than going through intermediaries like banks.
2. DApp (Decentralized Application) – Applications that operate on blockchain or P2P networks instead of a single computer.
3. Yield Farming – The practice of staking or lending crypto assets in order to generate rewards in the form of additional cryptocurrency.
4. Liquidity Pool – A smart contract that contains funds used for trading, providing liquidity and improving the stability of DeFi markets.
5. AMM (Automated Market Makers) – Algorithmic agents that provide liquidity to the market for digital assets, allowing assets to be traded in a permissionless and automatic way by using liquidity pools rather than a traditional market of buyers and sellers.
6. Stablecoin – A type of cryptocurrency designed to have a stable value relative to a specific asset or a pool of assets.
7. Oracles – External data feeds that deliver real-world data to smart contracts on the blockchain.
8. DAO (Decentralized Autonomous Organization) – Organizations that are run by rules encoded in smart contracts on the blockchain, rather than by hierarchical management.
9. Lending Protocols – Decentralized platforms where users can lend and borrow cryptocurrency by interacting directly with each other, bypassing the need for intermediaries like banks.
10. Flash Loans – Unsecured loan options in DeFi that allow the borrower to take on a loan and repay it within the same transaction.
11. Governance Tokens – Tokens that represent voting power in a decentralized organization and are often distributed as rewards for use of a particular DeFi protocol.
12. Rug Pull – A type of scam where developers abandon a project and take away the liquidity or funds, leaving the investors with worthless tokens.
13. Slippage – The difference between the expected price of a trade and the price at which the trade is executed.
14. Staking – The process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain by holding the cryptocurrency in a wallet to support operations like network security and decision making.
15. Liquidity Provider (LP): A user who funds a liquidity pool with crypto assets they own to facilitate trading on the platform and earn rewards.
16. Total Value Locked (TVL): A metric used in DeFi to measure the total value of assets that are currently being staked in a specific protocol. This number is often used as an indication of the protocol’s popularity and trustworthiness.
17. Impermanent Loss: A temporary loss of funds that liquidity providers can experience when providing liquidity in a liquidity pool.
18. Vault: Vaults in DeFi are financial primitive into which users deposit funds, to be managed by a smart contract (and sometimes humans) to maximize yield.
19. Collateral: An asset that a borrower offers to a lender to secure a loan. If the borrower fails to pay the loan, the lender has the right to seize the collateral.
20. Swap: In DeFi, swapping refers to the process of exchanging one token for another directly, without the need of a centralized exchange.
21. Margin Trading: It involves borrowing funds to increase potential returns of an investment. In the context of DeFi, users can borrow funds to leverage their positions and potentially generate higher returns.
22. Pool: In DeFi, a pool refers to a collection of funds shared among liquidity providers according to their share.
23. Over Collateralization: A risk-management strategy where the borrower provides collateral that is worth more than the amount they are borrowing, often used in DeFi to account for the volatility of the underlying assets.
24. DeFi Aggregator: A platform that collects data from various DeFi projects and presents it in a user-friendly manner so users can efficiently track the best yields.
25. Wrapped Tokens: These are tokenized versions of a certain cryptocurrency on a different blockchain other than their own. They are called ‘wrapped’ because the original cryptocurrency is put in a wrapper, a kind of digital vault which allows the tied up token to be traded on other chains.
26. Synthetics: These are financial derivatives that provide the exposure to other assets without the need to hold the underlying resource.
27. DeGen: In the context of DeFi, a DeGen (degenerate) is an investor who is considered to take on significant risk by deploying capital into high risk-high return yield farming strategies.
28. Gwei: The denomination used in defining the cost of gas in transactions involving Ethereum.
29. Layer 2 Scaling: Solutions that handle transactions off the main Ethereum chain (Layer 1) to alleviate network congestion and reduce fees.
30. Interoperability: The ability for different blockchain protocols to interact and integrate with each other, creating a seamless ecosystem where value and data can be rapidly exchanged without friction.
31. Permissionless: It refers to a system that does not require permissions from a central authority to participate. In DeFi, it typically refers to the open-source protocols that anyone can interact with.
32. APY (Annual Percentage Yield): The real rate of return earned on a savings deposit or investment taking into account the effect of compounding interest. It’s a common way to express yield in DeFi.
33. Farming: Another term for staking. It’s the process of earning rewards for depositing and holding cryptocurrency of a DeFi protocol.
34. Front Running: A practice where someone benefits from early access to market information. In blockchain, front running occurs when miners or validators arrange transactions in an order that maximizes profit for them.
35. MEV (Miner Extractable Value): Transaction reordering, transaction insertion, and censorship within a single block by miners to maximize their profit.
36. Cross-Chain: Refers to the capability of two different blockchains to transfer information or value directly between each other.
37. Reaper: A smart contract that auto-harvests unclaimed yield. Basically, it claims the rewards from yield farming for you and compounds them automatically.
38. Arbitrage: The practice of buying low on one exchange and selling high on another, exploiting the price difference for profit. In DeFi, it is often an automated process carried out by smart contracts or trading bots.
39. ZK-Rollup: A Layer-2 scaling solution that makes use of zero-knowledge proofs to bundle multiple transfers into a single transaction, reducing the load on the Ethereum network.
40. DeFi Index: A portfolio of different DeFi tokens. It’s a way to expose yourself to a broad range of tokens in the DeFi space, similar to an index fund in traditional finance.
41. Tvl Dominance: It is the ration of the Total Locked Value (TVL) of a specific project to the TVL of the entire DeFi industry. It gauges the market dominance of a DeFi project.
42. Crypto Pegged Tokens: It represents a specific real-world asset on a blockchain. It’s often used to track the value of assets like commodities or fiat currency, but it can be used for other cryptocurrencies as well.
43. Asset Tokenization: The process of converting rights to a real-world asset into a digital token on a blockchain.
44. Decentralized Identifiers (DIDs): A new type of identifier for verifiable, “self-sovereign” digital identity that do not need centralized registration authorities.
45. Gasless Transactions: It refers to transactions in the Ethereum network that are structured in a way that allows a third party to pay the gas fee, not the account that is making the transaction.
46. Mainnet: The term used to describe when a blockchain protocol is fully developed and deployed, meaning that cryptocurrency transactions are being broadcasted, verified, and recorded on a distributed ledger technology (blockchain).
47. Liquidity Mining: A network participation strategy in which a user provides capital to a protocol in return for platform-specific tokens and transaction fees, instead of mining that reward through computational work.
48. Vaults: In the DeFi space, vaults are yield farming strategies optimized to produce the highest yield possible. The vault uses pooled funds, so the yields are the average across all funds in the vault.
49. Layer 2 Protocols: These are secondary frameworks or networks lying atop an underlying blockchain protocol (Layer 1). They enhance the scale and speed of transactions while reducing costs, leveraging the robust security of Layer 1.
50. Oracle: Smart contracts cannot process external data. Oracles are entities that transmit external data to smart contracts on the blockchain. This data can be price information, temperature, or whether a payment was made.
51. Risk Tranche: It’s a security that can be split up into smaller pieces and sold to investors, according to different levels of risks and returns. This can be used in DeFi for splitting potential profit and loss from investments.
52. Uniswap: It is the most widely used decentralized exchange on Ethereum, facilitating swaps of ERC20 tokens directly from users’ wallets.
53. Yearn.Finance: It is a DeFi protocol on Ethereum that automatically moves user deposits between several other lending protocols like Compound, Aave etc., to maximize the return.
54. Governance Proposals: Proposals put forth by members of a DAO in a DeFi ecosystem regarding changes to the system. Token holders often have voting rights on these proposals based on the number of tokens they hold.
55. Privacy Coin: This type of cryptocurrency offers totally or partially obscured transaction details, which makes traceability challenging. Its main focus is the privacy of its users.
56. Rug Pull: A term used to describe a malicious act, where crypto developers abandon a project and run away with investors’ funds.
57. Synthetic Assets: These are financial instruments in the form of digital assets on the blockchain that represent real-world assets, like commodities or fiat currencies.
58. Token Burns: A mechanism in which a certain number of tokens are deliberately removed from circulation, typically to control the number of tokens in supply.
59. Token Swap: The act of exchanging one cryptocurrency for another within a single platform.
60. Over-collateralization (OC): This is a risk mitigation strategy often used in the DeFi sector due to the high price volatility of digital asset collateral. Borrowers deposit an amount of collateral that is significantly higher than the amount they are borrowing.
61. Token Listings: This is the process whereby a new cryptocurrency token is listed on a crypto exchange and made available for trading.
62. Whale: A person or organization (such as a hedge fund) that has a large amount of capital. Whales can make big market moves and have influence over the market.
63. Yield Aggregator: These platforms auto-shift user deposits between different DeFi markets to find the protocols offering the best interest rates and maximize yield.
64. pTokens: Represents a pegged token, meaning that it has the same value as the asset it mirrors and offers a bridge from a blockchain to another.
65. Optimistic Rollups: These are Layer 2 solutions that scale Ethereum smart contract computations and enable low fees and fast confirmations. They gain their efficiency by only posting transaction data on-chain and assuming that transactions are correct by default.
66. Undercollateralized Loan: This loan is given when the borrowed amount is higher than the value of the collateral. It is much riskier than standard or even overcollateralized loans, especially in volatile crypto markets.
67. Transaction fee: The fee that is paid (usually in the platform’s native token) for transacting on the blockchain. These fees go to pay miners or stakers for validating and securing the network.
68. Crypto Derivatives: Financial products like futures, options, or swaps, which derive their value from underlying cryptocurrency assets.
69. Coupon: In DeFi, a coupon is similar to a bond in traditional finance. When you buy a coupon, you’re essentially lending money to the protocol with the promise that you will be paid back with interest after a set amount of time.
70. Liquidation: The process of closing positions when they fail to maintain the minimum margin requirement. In DeFi, if a borrower fails to maintain overcollateralization due to declines in the value of their collateral, the collateral will be liquidated.
71. Farm: In the context of DeFi, a farm is where liquidity providers deposit their tokens in order to earn a yield. It’s usually a smart contract where users deposit assets to earn rewards.
72. Airdrop: It’s a way of distributing tokens directly to the wallet addresses of eligible users. Often used as a marketing tactic, or as a way to share rewards with the community, or to distribute tokens after a fork.
73. Vesting: The process where token or equity ownership becomes fully accessible over a period of time. In DeFi, vesting schedules are usually encoded in smart contracts.
74. Asymmetric Liquidity Pools: A type of liquidity pool where liquidity providers are able to provide liquidity in a more flexible manner such as adding liquidity for just a single token.
75. Governance Tokens: Tokens within a blockchain project that confer decision-making powers and voting rights to their holders.
76. Dust Attack: A type of attack where an attacker sends microtransactions to a wallet to de-anonymize the wallet owner.