Trading Glossary

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.

Faucet

A service dispensing free testnet tokens to developers.

Fee Burn

The permanent destruction of fees, reducing supply.

Fee Market

The auction dynamic by which transactions compete for limited block space.

Fee Switch

A governance-controlled mechanism directing a portion of protocol revenue to the treasury or to token holders.

Few Understand

Ironic claim of insight into an underappreciated development.

Fiat-Backed Stablecoin (Fiat-Collateralized)

A stablecoin backed by reserves of cash and short-term instruments held by an issuer, redeemable at par by eligible holders.

Fibonacci Retracement

Horizontal levels derived from Fibonacci ratios, used to identify potential reversal zones.

FIFO / LIFO / HIFO

Accounting methods for determining which units were disposed of, and therefore what cost basis applies.

Fill / Partial Fill

Complete or partial execution of an order.

Finality

The point at which a transaction is considered irreversible.

Flash Loan

An uncollateralized loan that must be borrowed and repaid within a single transaction. If repayment fails, the entire transaction reverts and the loan never occurred.

Flash Loan Attack

Using uncollateralized single-transaction borrowing to obtain temporary capital large enough to manipulate prices, governance, or protocol state.

Flippening

A hypothetical event in which one asset overtakes another in market capitalization.

Floor Price

The lowest listed price within a collection, the standard headline metric.

FOMO

Fear of missing out; buying driven by the anxiety of being left behind.

Forced Inclusion / Escape Hatch

A mechanism allowing users to submit transactions or withdraw funds directly via the Layer 1 if a sequencer censors or fails.

Fork

A divergence in the chain or in the protocol rules.

Fork Choice Rule

The algorithm nodes use to select the canonical chain when multiple valid chains exist.

Formal Verification

Mathematically proving that contract code satisfies a specified property under all conditions.

Foundation

A legal entity, often established in a favourable jurisdiction, that stewards a protocol's development and treasury.

Four-Eyes Principle

The requirement that a second authorized individual independently approve sensitive actions.

Fractionalization

Dividing ownership of a single NFT into fungible shares. Structures of this kind may carry securities implications.

Fraud Proof (Fault Proof)

Evidence submitted on-chain demonstrating that a claimed state transition was invalid.

Front-End Hijack

Compromising a project's website or DNS so that users interact with a malicious contract while the underlying protocol remains intact.

Front-Running

Placing a transaction ahead of an observed pending transaction to profit from its expected price effect.

FUD

Fear, uncertainty, and doubt. Frequently used to dismiss criticism, including legitimate criticism — treat with care.

Full Node

A node that independently downloads, verifies, and stores the complete current state and validates every rule of the protocol. Full nodes are the enforcement layer of a blockchain's rules.

Fully Diluted Valuation (FDV)

Maximum supply multiplied by current price. The gap between market cap and FDV indicates how much future dilution is scheduled.

Function Selector

The first four bytes of the hash of a function signature, identifying which function a call targets.

Fundamental Analysis (FA)

Analysis of a protocol's usage, revenue, token economics, and competitive position.

Funding Rate

The periodic payment exchanged between long and short holders of a perpetual contract, which pulls the contract price toward the spot price.

Funding Rate Arbitrage

Collecting funding payments by holding offsetting spot and perpetual positions.

Fungible Token

A token whose units are identical and mutually interchangeable.

Futures Contract

An agreement to buy or sell an asset at a set price on a specified future date.

Fuzzing

Automated testing with large volumes of randomized inputs to surface unexpected behaviour.