Research · Trading Glossary
Trading Glossary
Plain-English definitions for the terms you will meet in our research and on the platform. Pick a letter to see all of its terms.
A
- ABI (Application Binary Interface)
- The specification describing how to encode calls to a contract and decode its responses. Required by any client interacting with the contract.
- Access Control
- The mechanisms restricting which addresses may invoke privileged functions.
- Access Control Flaw
- A missing or incorrect permission check allowing unauthorized invocation of privileged functions. Consistently one of the highest-loss vulnerability classes.
B
- Back-Running
- Placing a transaction immediately after another to capture the resulting opportunity, such as rebalancing arbitrage.
- Bag / Bag Holder
- A holding / someone left holding a position that has lost most of its value.
- Base Fee
- Under EIP-1559, the protocol-determined per-gas fee that adjusts algorithmically with network demand and is burned rather than paid to block producers.
C
- Calldata
- The input data supplied to a contract call, historically the primary cost driver for rollups posting data to Ethereum.
- Candlestick Chart
- A chart displaying open, high, low, and close prices for each interval.
- Canonical Bridge
- The official bridge between a Layer 2 and its Layer 1, secured by the rollup protocol itself rather than by an external party.
D
- Danksharding
- Ethereum's data availability scaling roadmap, expanding blob capacity to serve a large ecosystem of rollups.
- Data Availability (DA)
- The guarantee that the data required to verify or reconstruct a chain's state has actually been published and can be retrieved. A prerequisite for trust-minimized scaling.
- Data Availability Layer
- A network specialized in publishing and guaranteeing the availability of data, used by rollups and modular chains.
E
- ECDSA (Elliptic Curve Digital Signature Algorithm)
- The signature scheme historically used by Bitcoin and Ethereum.
- Eclipse Attack
- Isolating a node by controlling all of its peer connections, feeding it a false view of the network.
- EdDSA / Ed25519
- A signature scheme used by Solana, Cardano, and others, valued for speed and resistance to certain implementation errors.
F
- Failover
- Automatic transfer to a standby system when a primary component fails.
- Fair Launch
- A distribution with no pre-sale, pre-mine, or privileged allocation.
- FATF
- The Financial Action Task Force, the intergovernmental body setting global AML/CTF standards.
G
- GameFi
- The intersection of blockchain assets and gaming, where in-game items exist as tradable tokens.
- Gas
- The unit measuring the computational work required to execute an operation on Ethereum and compatible chains.
- Gas Limit
- The maximum amount of gas a sender authorizes a transaction to consume. If execution exceeds it, the transaction reverts and the fee is still charged.
H
- Halving
- The scheduled reduction, by half, of the block subsidy. Bitcoin's halving occurs roughly every four years and is a core element of its issuance schedule.
- Hard Fork
- A backward-incompatible protocol change. Nodes that do not upgrade will reject blocks produced under the new rules, potentially splitting the network into two chains.
- Hardhat / Foundry / Remix
- Widely used smart contract development frameworks and environments for compiling, testing, and deploying.
I
- Iceberg Order
- A large order that displays only a portion of its size at a time.
- Idempotency Key
- A unique identifier ensuring that a repeated API request is processed only once, preventing duplicate transfers.
- Immutability
- The practical inability to alter confirmed historical records. In public blockchains this is economic rather than absolute: rewriting history is possible but prohibitively expensive.
J
- JSON-RPC
- The standard request format used to communicate with blockchain nodes.
K
- Keccak-256
- The hash function used throughout Ethereum, including for address derivation and function selectors.
- Keeper / Automation Network
- A service triggering contract functions when predefined conditions are met, since contracts cannot self-execute.
- Key Ceremony
- A formal, documented, and witnessed procedure for generating and distributing critical keys.
L
- Latency
- The delay between submitting a transaction and receiving confirmation.
- Launchpad
- A platform facilitating structured token launches and distribution.
- Layer 0
- Infrastructure beneath individual chains, providing shared networking, security, or chain-deployment frameworks.
M
- MACD
- Moving Average Convergence Divergence, a momentum indicator based on the relationship between two moving averages.
- Mainnet
- The live production network where transactions carry real economic value.
- Mainnet Fork
- A local simulation of live chain state, used to test against real conditions and real deployed protocols.
N
- Nakamoto Consensus
- The combination of proof of work, the longest-chain rule, and block rewards that constitutes Bitcoin's consensus design.
- Native Token
- The protocol-level asset of a chain — BTC, ETH, SOL.
- NFA
- Not financial advice. A common disclaimer with limited actual legal effect.
O
- OFAC
- The US Office of Foreign Assets Control, which administers US sanctions programs.
- Off-Chain Governance
- Signalling and deliberation conducted outside the chain, with execution performed separately by authorized signers.
- Off-Ramp
- A service converting crypto back into fiat currency.
P
- Paper Wallet
- Keys printed or written on physical media. Largely obsolete and error-prone; not recommended.
- Parallel EVM
- EVM implementations supporting parallel execution while preserving compatibility.
- Parallel Execution
- Processing non-conflicting transactions simultaneously to increase throughput.
Q
- Quadratic Voting
- A scheme where the cost of additional votes rises quadratically, reducing the dominance of large holders.
- Quorum
- The minimum participation required for a vote to be valid.
R
- Rarity
- The relative scarcity of a token's trait combination.
- Rate Limit
- A cap on request volume within a time window, typically enforced per API key.
- Real World Asset (RWA)
- A traditional off-chain asset — treasuries, credit, real estate, commodities — represented as a token on-chain.
S
- SAFT (Simple Agreement for Future Tokens)
- An investment contract granting the right to receive tokens upon a future network launch.
- Sanctions Screening
- Checking customers, counterparties, and addresses against government sanctions lists.
- Sandwich Attack
- Placing one transaction before and one after a victim's trade, profiting from the price movement the victim causes. The principal reason to set conservative slippage tolerance.
T
- Taint Analysis
- Assessing the extent to which funds trace back to illicit sources.
- Take-Profit Order
- An order triggered to close a position at a defined profit level.
- Taker
- A participant whose order executes against resting orders and removes liquidity.
U
- Ultimate Beneficial Owner (UBO)
- The natural person who ultimately owns or controls a corporate customer.
- Uncle Block (Ommer)
- In Ethereum's proof-of-work era, a stale block that was still referenced and partially rewarded to reduce the advantage of large mining operations.
- Unlimited Approval
- An allowance set to the maximum possible value, avoiding repeat approvals but leaving a standing risk if the approved contract is compromised.
V
- Validator
- A participant in proof of stake that stakes collateral and performs consensus duties: proposing blocks and attesting to those proposed by others.
- Validity Proof
- A succinct cryptographic proof that a state transition was executed correctly.
- Validium
- A design using validity proofs for correctness while keeping transaction data off the Layer 1, reducing cost at the expense of data availability guarantees.
W
- WAGMI / NGMI
- "We're all gonna make it" / "not gonna make it."
- Wallet
- Software or hardware that stores private keys and constructs signed transactions. A wallet does not hold assets; assets remain on-chain and the wallet holds the authority to move them.
- Wallet Drainer
- Malicious software or a malicious signature request designed to empty a wallet in a single approval.
Y
- Yield Aggregator
- A protocol that automatically reallocates deposits across yield sources.
- Yield Farming
- Deploying capital across protocols to maximize returns from fees, incentives, and rewards.
Z
- Zero-Knowledge Privacy
- Privacy achieved through validity proofs, allowing correctness to be verified without disclosing underlying data.
- Zero-Knowledge Proof (ZKP)
- A proof that a statement is true without revealing any information beyond the truth of the statement itself.
- ZK Coprocessor
- A system enabling smart contracts to verifiably use results of heavy off-chain computation over historical chain data.
#
- 51% Attack
- Control of a majority of a network's hashrate or stake, enabling transaction censorship and reversal of recent history. It does not allow theft of arbitrary funds or creation of invalid transactions.