Glossary

Crypto glossary

Short, concrete definitions of the terms that come up when you swap, pay, or build on crypto. Each entry has a one-sentence answer for people in a hurry, and a longer read for people who want the mechanics.

Non-custodial swap

A non-custodial swap is a crypto exchange where the service routing the swap never takes control of user funds — the swap executes directly between the user's wallet and a counterparty or provider.

Atomic swap

An atomic swap is a peer-to-peer crypto exchange between two blockchains that either completes in full for both parties or reverts entirely, with no possibility of one side receiving funds while the other does not.

TRC20

TRC20 is a technical standard for tokens issued on the TRON blockchain — most commonly used for USDT, which is issued as a TRC20 token for lower fees and faster confirmations than the Ethereum equivalent.

ERC20

ERC20 is the token standard used on the Ethereum blockchain and by most EVM-compatible chains — it defines the common functions that make tokens interoperable with wallets, exchanges, and smart contracts.

BEP20

BEP20 is the token standard on BNB Smart Chain — technically identical to Ethereum's ERC20, but running on a separate EVM-compatible chain with lower fees.

Deposit address

A deposit address is the unique blockchain address a user sends source funds to when initiating a crypto swap — it is generated per swap and watched by the routing service to trigger the exchange.

Slippage

Slippage in a crypto swap is the difference between the quoted rate at the moment you start the swap and the effective rate at which the swap actually executes, driven by price movement and provider spread during the intervening time.

Fixed vs floating rate

A fixed-rate crypto swap locks the exchange rate at quote time; a floating-rate swap uses the market rate at execution time — the trade-off is certainty (fixed) vs. usually-better economics (floating).

Seed phrase

A seed phrase is a sequence of 12 or 24 English words that encodes the master private key of a crypto wallet — anyone with the phrase can recover the wallet and spend all funds, so it must be stored offline and never shared.

MCP (Model Context Protocol)

MCP (Model Context Protocol) is an open standard for exposing tools, data sources and APIs to AI agents in a typed, discoverable way — so agents can call external services safely instead of scraping web UIs.

Cold storage

Cold storage is any method of holding cryptocurrency private keys on a device or medium that is not connected to the internet, dramatically reducing the risk of remote theft compared to hot wallets.

Hardware wallet

A hardware wallet is a dedicated physical device that stores cryptocurrency private keys in a tamper-resistant chip and signs transactions on-device, so the keys never leave the device even when it is connected to an infected computer.

Private key

A private key is the secret cryptographic number that authorizes spending from a specific cryptocurrency address — anyone who has the private key controls the funds at that address, so it must never be exposed to a networked device.

Multisig (multi-signature)

A multisig wallet requires more than one private key to authorize a transaction — for example a 2-of-3 setup needs any two of three keys to sign, providing redundancy and shared control without a single point of failure.

HTLC (Hash Time-Locked Contract)

An HTLC (Hash Time-Locked Contract) is a smart-contract primitive that locks funds until either a cryptographic secret is revealed to claim them or a timeout elapses to refund them, enabling atomic cross-chain swaps and Lightning Network channels.

Gas

Gas is the fee paid to network validators for executing a transaction on Ethereum and other EVM chains — priced in the native token (ETH, BNB, etc.) and calculated as gas-limit multiplied by gas-price, both of which vary with network congestion.

Lightning Network

The Lightning Network is a Layer-2 protocol on top of Bitcoin that enables near-instant, low-fee payments by routing them through off-chain payment channels between nodes, only settling to the main chain at open and close.

Ring signature

A ring signature is a cryptographic signature scheme that proves the signer is one member of a group without revealing which one, giving cryptographic ambiguity to the true sender in privacy protocols like Monero.

Stealth address

A stealth address is a one-time destination address derived from the recipient's public keys for each incoming transaction, so incoming payments cannot be linked to the recipient's "main" public address by observers.

KYC (Know Your Customer)

KYC (Know Your Customer) is the regulated process by which a financial service verifies the identity of its customers — usually by collecting government-issued ID, proof of address, and other personal information — before allowing them to use the service.

AML (Anti-Money-Laundering)

AML (Anti-Money-Laundering) is the umbrella of laws, procedures and monitoring that financial services follow to detect and prevent the movement of illicit funds — KYC identity verification, transaction monitoring, and suspicious-activity reporting all live under AML.

Hot wallet

A hot wallet is any cryptocurrency wallet whose private keys are held on a device connected to the internet — mobile apps, browser extensions, and exchange wallets are all hot wallets, convenient for frequent use but higher-risk than cold storage.

Block explorer

A block explorer is a website that lets anyone look up the state of a blockchain — transactions, addresses, blocks, confirmations, and token balances — by querying the public ledger and rendering it in a browser.

DEX (decentralized exchange)

A DEX (decentralized exchange) is a crypto exchange that executes trades through smart contracts on a blockchain rather than through a centralized order book, so trades settle directly wallet-to-wallet without an intermediary holding funds.

CEX (centralized exchange)

A CEX (centralized exchange) is a crypto exchange operated by a company that holds user funds in custodial accounts, runs an internal order book, and matches trades off-chain — Binance, Coinbase, Kraken and OKX are canonical examples.

Bridge (cross-chain)

A cross-chain bridge is a protocol that lets assets or messages move from one blockchain to another — typically by locking the asset on the source chain and minting a wrapped representation on the destination chain, or by using a network of validators to relay messages.

Layer 2 (L2)

A Layer 2 is a blockchain built on top of a base chain (Layer 1) to increase throughput and reduce fees by executing transactions off the main chain and posting compressed proofs back to it — Arbitrum, Optimism, Base and Lightning are canonical L2s.

Stablecoin

A stablecoin is a cryptocurrency whose price is designed to track a stable reference — usually the US dollar — through mechanisms like fiat reserves (USDT, USDC), crypto collateral (DAI), or algorithmic supply control.

On-ramp

A crypto on-ramp is any service that converts fiat currency (dollars, euros, etc.) into cryptocurrency — bank transfers, card payments, and Apple Pay integrations at licensed exchanges and specialized fiat-to-crypto services are all on-ramps.

Off-ramp

A crypto off-ramp is any service that converts cryptocurrency back into fiat currency — bank transfers, card withdrawals, and PayPal cash-outs from licensed exchanges and specialized crypto-to-fiat services are all off-ramps.

Mempool

The mempool is the waiting area of a blockchain network — the set of valid but unconfirmed transactions that nodes have received and are holding until a miner or validator includes them in a block.

Block confirmation

A confirmation is the inclusion of a transaction in a block plus each subsequent block built on top of it — one confirmation means one block deep, six confirmations means five more blocks were added after, which makes reversal exponentially harder.

Mixer

A crypto mixer is a service that pools deposits from many users, shuffles them, and returns equivalent amounts to fresh addresses — the goal is to break the on-chain link between the source of funds and their eventual use, though regulatory attention has made most mixers legally risky.

HD wallet

An HD (Hierarchical Deterministic) wallet derives every private key and address it uses from a single master seed following the BIP-32 / BIP-39 / BIP-44 standards, so a 12- or 24-word seed phrase can back up the entire wallet across many chains.

Transaction hash (txid)

A transaction hash (also called txid or tx hash) is the unique cryptographic fingerprint of a specific blockchain transaction — a 64-character hexadecimal string used to look up and reference that exact transaction on a block explorer.

Wallet address

A wallet address is the public identifier used to receive cryptocurrency on a specific blockchain — derived cryptographically from the public key, safe to share, and distinct per chain (0x… for Ethereum, 1/3/bc1… for Bitcoin, T… for TRON, etc.).

Gas limit

A gas limit is the maximum amount of computation you authorize a transaction to consume on Ethereum or another EVM chain — a simple transfer costs 21,000 gas, while complex smart-contract calls can require hundreds of thousands.

Address poisoning

Address poisoning is a scam where an attacker sends a zero-value or dust transaction from an address that looks visually similar to one the victim recently used — hoping the victim copies the poisoned address from their transaction history on a future send.

Halving

A halving is a scheduled event in Bitcoin (and some other proof-of-work chains) where the block reward paid to miners is cut in half — occurring roughly every four years, this hard-coded scarcity mechanism caps Bitcoin's eventual supply at 21 million.

UTXO

A UTXO (Unspent Transaction Output) is a discrete chunk of cryptocurrency locked to a specific address — Bitcoin and other UTXO-model chains do not track account balances directly; a wallet's balance is the sum of its unspent outputs.

EIP-1559

EIP-1559 is the 2021 Ethereum upgrade that restructured transaction fees into a "base fee" (algorithmically adjusted per block and burned) plus an optional "priority fee" (tip to the validator) — making fees more predictable and starting the ETH burn.

MEV (Maximum Extractable Value)

MEV (Maximum Extractable Value, originally Miner Extractable Value) is the profit that block producers or "searchers" extract by reordering, inserting, or censoring transactions within a block — front-running, sandwich attacks, and arbitrage all fall under MEV.

Testnet

A testnet is a version of a blockchain running the same software as the main network but with valueless tokens — used for development, testing, and integration work before deploying to mainnet with real value.

Mainnet

A mainnet is the production version of a blockchain — the live network where tokens have real value and every transaction is final. Contrast with testnets, where the same software runs with valueless tokens for development.

Faucet

A crypto faucet is a service that gives out small amounts of tokens for free — historically for marketing (early Bitcoin faucets giving away real BTC), now almost exclusively for handing out testnet tokens to developers.

Wrapped token

A wrapped token is a representation of one blockchain's asset on a different blockchain — wBTC is Bitcoin represented as an ERC-20 on Ethereum, backed 1:1 by real BTC held in custody by the wrapping service.

Staking

Staking is locking cryptocurrency to help secure a proof-of-stake blockchain in exchange for token rewards — validators stake capital as collateral, and users delegating to validators earn a share of the block-reward yield.

Liquidity pool

A liquidity pool is a smart-contract-held pair (or set) of tokens that a decentralized exchange uses to price and settle trades — anyone can deposit tokens into the pool and earn a share of trading fees in return.

AMM (Automated Market Maker)

An AMM (Automated Market Maker) is a decentralized exchange design that prices trades using a mathematical curve over a liquidity pool rather than an order book — Uniswap, Curve, and Balancer are the canonical AMM protocols.

WalletConnect

WalletConnect is an open protocol that lets a mobile crypto wallet sign transactions requested by a desktop dApp — a QR code links the session, and the mobile wallet holds the keys while the desktop constructs and requests each transaction.

Destination tag (memo)

A destination tag (also called memo or payment ID on some chains) is a numeric identifier attached to a transfer on chains where many users share a single deposit address — the tag routes the deposit to the right individual account. Required by XRP, Stellar, Cosmos, and others.

Dust

Dust is a tiny amount of cryptocurrency left in a wallet — small enough that spending it would cost more in transaction fees than the amount itself. Dust also appears in "dusting attacks" where scammers send tiny amounts to try to link addresses together.

Front-running

Front-running in crypto is when someone sees a pending transaction in the mempool and submits their own copy or reaction with a higher fee, getting theirs mined first — a form of MEV extraction that damages the original transaction's economics.

Impermanent loss

Impermanent loss is the difference between holding a pair of tokens and providing them as liquidity to an AMM — when the relative price of the pair changes, the LP position ends up with less value than a simple hold would have.

DAO

A DAO (Decentralized Autonomous Organization) is an on-chain organization whose decisions are made by token-holder voting through smart contracts, with treasury and operations controlled by the voted-in outcomes rather than a traditional management structure.

Custodial wallet

A custodial wallet is one where a third party (an exchange, a payment processor, a custodian) holds the private keys and manages the funds on behalf of the user — the user has an account with the service, not direct control of the underlying crypto.

Paper wallet

A paper wallet is a physical printout of a cryptocurrency private key or seed phrase — an offline storage method that was popular before hardware wallets became affordable, still occasionally used as a low-tech cold storage backup.

Yield farming

Yield farming is the practice of chasing high returns on cryptocurrency capital by moving it between DeFi protocols — providing liquidity, staking, borrowing, or leveraging positions to maximize the combined yield from fees, incentives, and interest.

Vanity address

A vanity address is a cryptocurrency address whose text starts (or ends) with a chosen pattern — generated by brute-forcing many random keys until one produces an address matching the desired prefix.

Sandwich attack

A sandwich attack is a specific form of MEV in which a searcher spots a large pending DEX trade in the mempool, buys the same asset just before it (raising the price), lets the victim's trade execute at the worse rate, then sells just after (capturing the difference).