Research · Trading Glossary

Trading Glossary

Plain-English definitions of the trading terms that start with P.

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.
Passphrase (25th Word): An optional user-supplied secret combined with the seed phrase to derive an entirely separate set of wallets. Adds security but is unrecoverable if forgotten.
Passporting: The ability to operate across a regulatory bloc on the basis of authorization in one member jurisdiction.
Patricia Merkle Trie: The modified radix-tree structure Ethereum uses to commit to account and storage state efficiently.
Pause Function (Emergency Stop): A privileged capability to halt protocol activity during an incident.
Paymaster: A contract that pays gas on a user's behalf, enabling fee sponsorship or payment of fees in tokens other than the native asset.
Payment Channel: A state channel restricted to payments.
Payment Service Provider (PSP): A processor handling card and bank rails for on- and off-ramp flows.
Payment Token: A token intended primarily as a medium of exchange.
Peer-to-Peer (P2P) Network: A network topology in which participants communicate directly with one another rather than through a central server.
Peg: The target value a stablecoin is designed to hold.
Pending Transaction: A broadcast transaction not yet included in a block.
Penetration Test: An authorized simulated attack assessing real-world defences.
Permissioned Blockchain: A network where participation in one or more roles (validating, reading, transacting) requires authorization. Common in enterprise and interbank settings.
Permissionless: A network any party may join, read from, transact on, or validate without approval from a gatekeeper.
Perpetual DEX: An on-chain venue for trading perpetual futures.
Perpetual Futures (Perps): A futures contract with no expiry, held in line with spot prices by a periodic funding payment. The dominant derivative instrument in crypto markets.
Phishing: Deceiving a user into revealing credentials or authorizing a malicious transaction.
Pig Butchering (Romance Investment Fraud): A prolonged confidence scheme cultivating a personal relationship before directing the victim to a fraudulent investment platform.
Pinning: Ensuring content remains hosted and retrievable on IPFS.
Plasma: An earlier Layer 2 framework using periodic commitments and exit games. Largely superseded by rollups.
Play-to-Earn (P2E): Game designs where participation generates tokenized rewards.
Points Program: A pre-token incentive system tracking user activity for later reward, now a standard growth mechanism.
Politically Exposed Person (PEP): An individual holding a prominent public function, subject to elevated scrutiny.
Ponzi Scheme: A structure paying existing participants with new participants' funds.
Post-Mortem: A public report following an incident, documenting root cause, timeline, impact, and remediation. Publishing one promptly is an industry norm and a meaningful trust signal.
Post-Quantum Cryptography (PQC): Cryptographic schemes designed to remain secure against attacks by sufficiently powerful quantum computers.
Practical Byzantine Fault Tolerance (PBFT): A classical consensus algorithm tolerating up to one third faulty participants, requiring multiple rounds of voting. The ancestor of many modern BFT designs.
Pre-Mine: Tokens created before public availability and allocated to insiders.
Prediction Market: A market where participants trade contracts on the outcome of future events, aggregating dispersed information into a price.
Preimage Resistance: The property that, given a hash, it is computationally infeasible to recover the original input.
Price Feed: An oracle providing asset prices, typically aggregated across multiple sources with deviation and heartbeat thresholds. Critical infrastructure for lending and derivatives protocols.
Price Impact: The portion of slippage caused by the size of the order relative to available liquidity.
Price Oracle Lag: Delay between real market prices and on-chain feeds, exploitable during volatility.
Price-to-Sales / Price-to-Fees: Valuation ratios adapted from equity analysis to compare token valuations against protocol revenue.
Prime Brokerage: Consolidated services for institutional clients: financing, custody, cross-venue execution, and netting.
Priority Fee (Tip): The additional per-gas amount paid directly to the block producer to incentivize inclusion.
Priority Gas Auction (PGA): Competitive fee bidding between bots racing for the same opportunity.
Privacy Coin: A cryptocurrency with protocol-level confidentiality of amounts, participants, or both.
Private Blockchain: A network operated by a single organization, with restricted read and write access.
Private Key: The secret value that authorizes spending and signing. Whoever holds the private key controls the associated assets — without exception.
Private Mempool / Private Order Flow: Transaction submission channels not publicly visible, protecting users from front-running.
Private Sale / Seed Round: Early fundraising rounds sold to selected investors at discounted terms, generally with the longest lockups.
Probabilistic Finality: Finality that strengthens with each additional confirmation but is never mathematically absolute. Characteristic of proof-of-work chains.
Probably Nothing: Ironic understatement signalling that something is, in fact, significant.
Profile Picture (PFP) Collection: A collection of avatar-style NFTs functioning as identity and community membership.
Progressive Decentralization: A deliberate strategy of transferring control from a founding team to a community over time.
Proof of Authority (PoA): A mechanism where a fixed set of identified, reputationally accountable validators produce blocks. Common in testnets and enterprise chains.
Proof of Burn: A mechanism where participants provably destroy tokens to earn mining or minting rights.
Proof of History (PoH): A cryptographic clock that establishes the passage of time between events, allowing validators to agree on ordering before agreeing on state. Used by Solana alongside proof of stake.
Proof of Personhood: Mechanisms establishing that an account corresponds to a unique human, addressing Sybil resistance in identity-dependent systems.
Proof of Reserves (PoR): A verification method by which a custodian demonstrates it holds assets matching customer balances, typically combining a Merkle-tree commitment to liabilities with attested proof of on-chain holdings.
Proof of Space / Proof of Capacity: A mechanism using allocated storage rather than computation as the scarce resource.
Proof of Stake (PoS): A consensus mechanism in which participants lock native tokens as collateral to earn the right to propose and attest to blocks. Security derives from the value at risk.
Proof of Work (PoW): A consensus mechanism in which participants expend computational effort to earn the right to propose blocks. Security derives from the real-world cost of energy and hardware.
Proposer-Builder Separation (PBS): An architecture separating the role of assembling block contents from the role of proposing blocks, reducing centralization pressure from MEV.
Protocol: The rule set defining how a network operates: block validity, consensus, state transitions, and networking.
Protocol Revenue: Fees retained by a protocol, as distinct from total fees paid by users, some of which may flow to liquidity providers.
Protocol-Owned Liquidity: Liquidity held on a protocol's own balance sheet rather than rented from external providers through incentives.
Prover: The party that generates validity proofs for a zero-knowledge system.
Proxy Pattern: An architecture where a persistent proxy contract holds state and delegates execution to a replaceable implementation contract.
Pseudonymity: The condition of most public blockchains: identities are addresses rather than names, but all activity tied to an address is permanently public and linkable.
Public Blockchain: An open network with publicly readable state and permissionless participation. Bitcoin and Ethereum are the canonical examples.
Public Goods Funding: Financing shared infrastructure that benefits an ecosystem without a direct revenue model.
Public Key: The publicly shareable counterpart of a private key, used to verify signatures and derive addresses.
Public Key Cryptography (Asymmetric Cryptography): A scheme using mathematically linked key pairs, where one key may be shared publicly and the other must remain secret.
Public Sale: The stage at which tokens are offered broadly.
Pyramid Scheme: A structure where returns depend primarily on recruiting further participants.