Blockchain Glossary

Automated Market Maker — determines prices using mathematical formulas instead of order books

Security experts reviewing smart contract code for vulnerabilities

Executing your transaction right after someone else's

Infrastructure enabling asset transfers between blockchains

A reward given for discovering and reporting security vulnerabilities

Machine-readable code that the EVM executes

Collateralized Debt Position — deposit crypto as collateral to borrow stablecoins

Assets deposited as security for a loan, at risk of liquidation if value drops

Moving assets or data between different blockchains

Decentralized Autonomous Organization — governed by token-based voting

A metaphor for the mempool where bots prey on unprotected transactions

Data Availability Sampling — verifying data availability by checking random samples instead of downloading everything

Ensuring transaction data is accessible and verifiable by anyone

Token decimal precision. ETH uses 18, USDC uses 6

Decentralized Finance — financial services on blockchain without intermediaries

Entrusting your voting power to another person

Decentralized Exchange — trade tokens directly without intermediaries

Ethereum upgrade introducing temporary Blob storage to reduce L2 costs

Multi-token standard supporting both fungible and non-fungible tokens

Ethereum standard for fungible (interchangeable) tokens

Ethereum standard for NFTs (non-fungible tokens)

The intermediary role in x402 that handles payments between client and server

The state where a transaction is irreversibly confirmed

An uncollateralized loan that must be borrowed and repaid within one block

A mechanism to prove that invalid transactions were included

Executing your transaction before someone else's to capture profit

Community-driven decision-making for protocol changes via voting

The loss LPs face when price changes make their position worth less than simply holding

Decentralized file storage — files are identified by hash and stored across the network

Providing liquidity just before a large trade, collecting fees, then withdrawing immediately

A smart contract holding two types of tokens, forming the basis for DEX trading

Liquidity Provider — someone who deposits assets into a pool to earn fees

The waiting area for unconfirmed transactions before they're included in a block

Maximal Extractable Value — profit gained by reordering transactions within a block

Very small payments, often fractions of a cent

Blockchain design separating execution, consensus, and data availability into distinct layers

Traditional architecture where one chain handles execution, consensus, and data availability

The wallet address calling the current function (Solidity term)

Security requiring multiple signatures to execute a transaction

A computer participating in the blockchain network to validate transactions and store blocks

Data or activity processed outside the blockchain

Data or activity recorded directly on the blockchain

Optimism's framework for building Layer 2 networks

The smallest instruction unit the EVM executes (ADD, PUSH, etc.)

A security-audited open-source smart contract library

Assumes transactions are valid with a dispute period for challenges

A service that provides off-chain data (e.g., prices) to the blockchain

Proposer-Builder Separation — splitting block proposal and construction into separate roles

Maintaining a 1:1 price ratio with another asset (e.g., USD)

A system of smart contracts providing a specific service

A vulnerability where a function is called again before it finishes executing

Cancels a transaction and rolls back state when conditions aren't met

Scaling technology that bundles transactions and submits them to L1

The difference between the expected price and the actual execution price

A program that automatically executes on the blockchain when conditions are met

A short, quickly verifiable zero-knowledge proof system

The programming language for writing Ethereum smart contracts

Locking assets to participate in network validation and earn rewards

A transparent zero-knowledge proof system that doesn't need a trusted setup

A mandatory waiting period between proposal approval and execution (usually 24-72 hours)

A number that uniquely identifies an NFT

The address where an NFT's metadata (image, description) is stored

A one-time ceremony to generate secret parameters for a proof system

Total Value Locked — the total amount of assets deposited in a protocol

Time-Weighted Average Price — uses period averages to defend against price manipulation

A participant who verifies and produces blocks in Proof of Stake

A token representing an asset from another chain

Cryptographic technique to prove a fact is true without revealing the secret

Uses zero-knowledge proofs to instantly verify transaction validity