Glossary
dETF (Decentralized Exchange-Traded Fund): A type of investment fund on a blockchain that tracks a specified basket of assets, similar to a traditional ETF.
Web3: The vision of a decentralized internet that leverages blockchain and peer-to-peer networking, allowing users to connect directly without intermediaries.
DAO (Decentralized Autonomous Organization): An organization that is run by smart contracts on the blockchain, with decision-making processes that are open, transparent, and controlled by token holders.
Smart Contract: A computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract without a middleman. These transactions are trackable and irreversible.
Staking: The process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. This usually involves holding onto a cryptocurrency and locking it in a wallet to support the network's operations.
Liquidity: The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
Liquidity Pool: A smart contract that contains funds, providing liquidity for the decentralized exchange. Users can trade against the liquidity pool, and pool contributors earn fees for providing liquidity.
DeFi (Decentralized Finance): An umbrella term for financial services on public blockchains, primarily Ethereum. Includes open lending protocols, insurance, derivatives, exchanges, and more.
Rebase: A rebase (or price-elastic) token is designed in a way that the circulating token supply adjusts (increases or decreases) automatically according to a token's price fluctuations. This expansion and contraction is what we call a rebase mechanism.
Yield Farming: The practice of staking or lending cryptocurrency assets in order to generate high returns or rewards in the form of additional cryptocurrency.
dApp (Decentralized Application): An application that runs on a decentralized network, avoiding a single point of failure.
Wallet: A digital place where you can securely store your cryptocurrencies. Some wallets are physical devices, and others are software applications you can download.
Tokenomics: A study of the economic systems that can be created using blockchain tokens.
Gas Fees: The fee or pricing value required to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform.
Collateralization: The process where a borrower pledges an asset as recourse to the lender in the event that the borrower defaults on the initial loan.
Risk Parity: An approach to investment portfolio management which focuses on the allocation of risk, usually defined as volatility, rather than the allocation of capital.
LSD (Liquid Staking Derivative): A representation of staked tokens that remain liquid and can be used elsewhere in DeFi for additional yield opportunities.
Reimbursement Pool: A reserve of funds set aside to compensate users affected by a particular event (e.g., a hack or system failure).
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