Financial & Blockchain Glossary
A comprehensive reference of key terms and concepts in fintech, cryptocurrency, and decentralized finance.
DeFi
Decentralized Finance. An ecosystem of financial applications built on blockchain networks that operate without traditional intermediaries like banks or brokerages.
Smart Contract
Self-executing programs stored on a blockchain that automatically enforce the terms of an agreement when predetermined conditions are met.
Gas Fee
The cost required to perform a transaction or execute a smart contract on a blockchain network. Gas fees compensate validators for the computational resources used.
Staking
The process of locking up cryptocurrency in a proof-of-stake network to support blockchain operations such as validating transactions, in exchange for rewards.
Liquidity Pool
A collection of funds locked in a smart contract that provides liquidity for decentralized exchanges, lending protocols, and other DeFi applications.
TVL
Total Value Locked. The total amount of assets deposited in a DeFi protocol, used as a key metric to measure the adoption and trust in a platform.
DEX
Decentralized Exchange. A peer-to-peer marketplace where cryptocurrency traders can transact directly without an intermediary or custodian.
CEX
Centralized Exchange. A cryptocurrency exchange operated by a company that acts as an intermediary between buyers and sellers, such as Coinbase or Binance.
Yield Farming
A DeFi strategy where users move assets between protocols to maximize returns, often by providing liquidity or staking tokens across multiple platforms.
Impermanent Loss
The temporary loss of value experienced by liquidity providers when the price ratio of deposited tokens changes compared to simply holding the tokens.
Layer 2
A secondary framework or protocol built on top of an existing blockchain (Layer 1) to improve scalability and reduce transaction costs while inheriting the security of the base layer.
Bridge
A protocol that enables the transfer of assets and data between two different blockchain networks, allowing interoperability across ecosystems.