Research · Trading Glossary
Trading Glossary
Plain-English definitions of the trading terms that start with C.
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.
- Canonical vs. Non-Canonical Asset
- Whether a wrapped asset was issued by the officially recognized bridge or by a third party. Multiple competing wrapped versions of the same asset are common and are a frequent source of user confusion and liquidity fragmentation.
- Capital Gains
- Profit realized on the disposal of an asset, taxable in most jurisdictions.
- CARF (Crypto-Asset Reporting Framework)
- The OECD framework for automatic international exchange of crypto tax information.
- Casper FFG
- Ethereum's finality gadget, which periodically finalizes checkpoints and makes reversal punishable by slashing.
- Censorship (Transaction-Level)
- The exclusion of specific transactions from blocks, in practice most often the result of sanctions compliance by builders and relays.
- Censorship Resistance
- The property that no single party can reliably prevent a valid transaction from eventually being included in the chain.
- Central Bank Digital Currency (CBDC)
- A digital form of sovereign currency issued directly by a central bank. Distinct from stablecoins in issuer, legal status, and design constraints.
- Centralized Exchange (CEX)
- A trading venue operated by a company that holds customer assets and matches orders on internal systems.
- Centralized Finance (CeFi)
- Crypto financial services operated by companies that take custody of user assets — exchanges, brokers, lenders.
- Chain Abstraction
- The practice of hiding chain selection, bridging, and gas management from the user entirely, so that the underlying chain becomes an implementation detail.
- Chain Analysis
- The discipline of tracing and attributing blockchain activity.
- Chain Reorganization (Reorg)
- An event in which nodes discard one version of recent chain history in favour of another, longer or heavier, version.
- Challenge Period
- The window during which a fraud proof may be submitted, typically seven days on optimistic rollups. It defines the standard withdrawal delay to the Layer 1.
- Change Management
- Controlled procedures for deploying changes to production systems, including approval and rollback.
- Change Output
- In UTXO systems, the portion of a consumed output returned to the sender.
- Checks-Effects-Interactions
- The standard defensive coding pattern: validate inputs, update internal state, then make external calls.
- Checksum
- Redundant data embedded in an address format that allows software to detect typographical errors before a transfer is sent.
- Circuit Breaker
- An automated control halting activity when abnormal conditions are detected.
- Circulating Supply
- Tokens currently available in the market, excluding locked, vesting, and reserved allocations.
- Client
- A software implementation of a protocol. Multiple independent clients for the same protocol improve resilience — this is called client diversity.
- Cliff
- An initial period during which no tokens are released, after which a portion unlocks at once.
- Clipboard Hijacking
- Malware silently substituting a copied address with the attacker's.
- Coin
- A blockchain's native asset, used to pay fees and, in proof-of-stake systems, to secure the network.
- CoinJoin
- A collaborative Bitcoin transaction combining inputs from multiple users to obscure the mapping between inputs and outputs.
- Cold Wallet
- A wallet whose keys have never touched an internet-connected device. Appropriate for long-term reserves.
- Collateral Ratio
- The value of posted collateral relative to outstanding debt.
- Collateralized Debt Position (CDP)
- A position in which a user locks collateral to mint a debt-denominated asset, typically a stablecoin.
- Collision Resistance
- The property that it is computationally infeasible to find two distinct inputs producing the same hash.
- Commitment Scheme
- A method of committing to a value while keeping it hidden, with the ability to reveal it verifiably later.
- Compliance Officer / MLRO
- The designated individual accountable for the AML program and for suspicious activity reporting.
- Composability
- The ability of contracts to call and build on one another freely, allowing complex systems to be assembled from independent components.
- Concentrated Liquidity
- An AMM design allowing providers to allocate capital to specific price ranges, substantially increasing capital efficiency and requiring active management.
- Confidential DeFi
- Financial applications combining on-chain verifiability with encrypted balances and positions.
- Confidential Transaction
- A transaction concealing the transferred amount while remaining publicly verifiable.
- Confirmation Threshold
- The number of confirmations a service requires before treating a deposit as final. Set per asset according to that chain's reorg characteristics.
- Confirmations
- The number of blocks built on top of the block containing a given transaction. More confirmations mean lower probability of reversal.
- Consensus
- The process by which network participants agree on a single canonical version of the ledger.
- Consensus Layer
- The component that orders transactions and establishes agreement.
- Consolidation
- A period of range-bound price action following a directional move.
- Consortium Blockchain
- A permissioned network jointly governed by a defined group of organizations.
- Constant Product Formula
- The classic AMM pricing rule, x × y = k, under which the product of the two pooled reserves remains constant across trades.
- Contango / Backwardation
- Conditions where futures trade above or below spot, respectively.
- Contract Address
- The on-chain location of a deployed contract.
- Conviction Voting
- A scheme where voting weight accumulates the longer support is maintained.
- Copium
- Rationalization following a loss.
- Core Contributor
- An individual working substantially on a protocol, whether employed by a foundation, a development company, or the DAO itself.
- Correlation
- The degree to which two assets move together. Crypto assets historically exhibit high internal correlation, particularly during stress.
- Cost Basis
- The acquisition value of an asset, used to compute taxable gain or loss on disposal.
- Counter-Terrorist Financing (CTF/CFT)
- Measures preventing the funding of terrorism, generally regulated alongside AML.
- Cross Margin
- Margin mode in which the entire account balance backs all positions, reducing liquidation risk on any one position while exposing the whole account.
- Cross-Chain Messaging
- Generalized transmission of arbitrary data and instructions between chains, not limited to asset transfers.
- Crypto-Asset Service Provider (CASP)
- The MiCA designation for regulated crypto service businesses in the EU.
- Crypto-Collateralized Stablecoin
- A stablecoin backed by overcollateralized crypto assets held in on-chain contracts.
- Cryptocurrency
- A digital asset native to a blockchain, secured by cryptography and issued according to protocol rules rather than by a central issuer.
- Cryptographic Hash Function
- A function that maps input of any size to a fixed-length output, deterministically and irreversibly. The same input always produces the same output; a trivially different input produces a completely different output.
- Custodial Wallet
- A wallet where a third party controls the private keys on the user's behalf.
- Custodian
- A regulated entity holding assets on behalf of clients.
- Customer Due Diligence (CDD)
- Standard risk assessment performed at onboarding and periodically thereafter.