DeFi Buzzwords:

DeFi: Bringing real-world financial services such as interest earning accounts, borrowing & lending, currency exchange, etc... to the Ethereum blockchain via decentralized applications.
Ethereum Blockchain: A decentralized platform that enables smart contracts to be executed on it.
Ether: the native currency of the Ethereum blockchain, used to pay for transaction fees.
Smart contract: An immutable contract that is programmed to execute after specified conditions are met.
DeFi Blue Chips: Term that refers to the elite and most popular projects / coins in the DeFi category. These coins usually rank within the DeFi top 10 in terms of market cap. These projects are deemed most likely to succeed because of their popularity, and therefore as a safe bet for investing.
Stable Coin: A cryptocurrency that is pegged to fiat or other cryptocurrencies, with the purpose to minimize volatility.
APY: Annual percentage yield is compounding interest rate, based on a compounding 1-year period.
Bitcoin Maxi: A slang term used to describe die-hard Bitcoin fans / investors / believers.
Deposit APY: The annual promised interest rate for an asset on a lending & borrowing protocol.
Borrow APR: This is the annualized interest rate of a cryptocurrency or stable coin loan. If you borrow $100 worth of Ethereum, at a 5% APR, you will have to pay back $105 in 1 year.
Stable APR: An interest rate on a loan that is fixed and will not change during the loan period.
Variable APR: An interest rate on a loan that will fluctuate throughout the loan period.
Total Value Locked (TVL): The dollar value of all cryptocurrencies currently locked into smart contracts.
DEX: Decentralized exchanges allow for peer-to-peer transactions without needing a middle-man. (example: Uniswap)
All-Time-High (ATH): The highest price point a cryptocurrency has ever reached to date.
All-Time-Low (ATL): The lowest price point a cryptocurrency has ever reached to date.
Altcoin: Every cryptocurrency besides Bitcoin (& Ethereum some argue), is considered an alternative or 'alt' coin.
Atomic Swap: The exchange of one cryptocurrency to another without needing an exchange or middle man.
Automated Market Maker (AMM): is a type of decentralized exchange (DEX) protocol that relies on a mathematical formula to price assets. Instead of using an order book like a traditional exchange, assets are priced according to a pricing algorithm. (Binance)
Bag: Slang for what currency a person is currently holding. ("I've got ETH bags")
Fiat: Refers to real world currency such as US dollars, Euro, GBP, etc...
Cold Storage: Holding cryptocurrency assets offline.
Cryptocurrency: a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
Decentralized Applications (DApps): Applications that run on a distributed, peer-to-peer blockchain, such as Ethereum.
Proof of Stake: A consensus type used by a blockchain, involving the locking up of funds to validate network transactions and keep it up. Validators get rewarded for doing so.
Proof of Work: A consensus type used by a blockchain, more commonly known as mining, where solving complex cryptographic equations creates new blocks.
Derivative: A financial instrument deriving its asset from an underlying asset.
BTC Dominance: The ratio of Bitcoin's market cap compared to the rest of the entire cryptocurrency market cap.
ETH Dominance: The ratio of Ethereum's market cap compared to the rest of the entire cryptocurrency market cap.
ERC-20 Token: A cryptocurrency token that runs on the Ethereum blockchain.
ERC-721 Token: An Ethereum token for non-fungible tokens (NFTs). Enables smart contracts to operate as tradable tokens.
Ethereum Improvement Proposal (EIP): Proposals set forth by developers in the Ethereum community to improve or add on to the Ethereum codebase.
Exchange Traded Fund (ETF): A security that is a comprised of a collection of assets (such as stocks or cryptocurrencies), and tradable just like a single token or share of a stock.
FUD: Fear, Uncertainty and doubt. FUD refers to spreading negative and or exaggerated opinions / news to attempt and influence panic-selling.
Fiat-Pegged Cryptocurrency: Crypto tokens whose price is anchored to the price of real world currencies like the US dollar. (1 DAI = $1 USD)
The Flippenning: What seems like a destiny for Ethereum investors and fans, the flippenning refers to the scenario where Ethereum's total marketcap surpasses that of Bitcoin's.
Futures: A futures contract is an agreement between two parties to buy or sell a specific asset at a predetermined and agreed upon price on a specific date. (Riskier investing)
Gas Fee: A term used to describe the transaction fee taken by the Ethereum blockchain upon the execution of a smart contract.
Governance Token: A token where its holders decide its fate via voting for future changes. The more of the token a person owns, the more voting power.
Gwei: The fractional denomination of Ether used when referring to gas prices.
Hard Cap: The maxiumum supply of a token / cryptocurrency.
Hot Wallet: A digital wallet for cryptocurrencies that is connected to the internet, in lou of an offline wallet.
Immutable: A property of the blockchain which prevents data from ever being modified after it is etched in to the blockchain.
Impermanent Loss: Unrealized loss when providing liquidity to a liquidity pool. This happens when there is volatility in the asset(s) you are providing.
Initial Coin Offering: Similar to the stock market's IPO, and ICO is a crowdfunding exchange for tokens so that a project can raise capital. This capital usually goes to developers and community managers that keep the project moving.
KYC (Know Your Customer): If a DApp is KYC based, it means that they require verification for its users. In the decentralized finance world, we prefer non KYC DApps.
Ledger: A public and distributed transaction log that cannot be changed, only added to. Public and immutable bookkeeping.
Leverage: Using borrowed money to trade cryptocurrencies or assets. Known as margin trading. Very risky as you can lose large sums just as you can make them.
Limit Order: A set price set by a trader to automatically buy or sell a crypto currency when this price is reached.
Dollar Cost Averaging (DCA): An investment strategy to accumulate cryptocurrencies or assets by purchasing weekly or monthly, no matter what the price is.
Liquidity: How much volume a cryptocurrency has, indicating whether or not it can be bought and sold easily.
Liquidity Pool: A collection of funds locked on a smart contract to help facilitate trading on cryptocurrencies on a decentralized exchange. Peer-to-peer swaps basically, where the liquidity providers get rewarded small fees every trade.
Liquidity Provider: Decentralized Exchange users that help fund the basket of available token pairs for trading.
Long: Long term investment into a cryptocurrency. "Going Long on ETH"
Margin Trading: Trading with borrowed money from an exchange using collateral.
Market Capitalization: A gauge to measure how much a cryptocurrency or asset is worth, determined by the market (the people). If 10 lemons exist, and they were sold for $10 each. The total market cap of lemons in existance is $100.
Max Supply: This refers to the maximum amount of coins that will be issued / mined, ever for a specific crypto currency.
Non Fungible Token (NFT): An ethereum based token that is used as an immutable stamp for digital ownership. (Crypto art)
Non-Custodial: This describes a wallet, meaning the private key of users are held by the users directly, leaving the security up to you.
Offline Storage: Keeping your crypto assets in a device not connected to the internet.
Oracles: A decentralized entity that aggregates real-world, immutable data from data validators, and makes it available for smart contracts to use. Chainlink is the leader in oracle solutions.
Over-The-Counter (OTC): This method of trading refers to an exchange of crypto made from person-to-person, outside of an exchange.
Trading Pair: Trade between two cryptocurrencies (i.e BTC/ETH)
Peer to Peer (P2P): a distributed network where each user contributes to the uptime of the network.
Seed Phrase: A list of random words, like a password, that is used to gain access to a wallet.
Slippage: The difference between the price a trader placed a limit buy or sell order at, and the ACTUAL price that the algorithm / ledger executed the trade at.
Staking: The process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn staking rewards.
Trade Volume: The amount a cryptocurrency has been traded in a 24-hour window.
Transaction (TX): Exchanging cryptocurrencies on the blockchain.
Transaction Fee: A payment required to transact on a blockchain. This boosts security because fees discourage price manipulation by mass trading back and forth.
Browser Wallet: A digital wallet in the form of a browser extension which can be used to connect to DApps without a login.
Wei: The smallest denomination of Ethereum (1 ETH = 1,000,000,000,000,000,000 Wei)
Whitepaper: Similar to a business plan for a business, a whitepaper describes the roadmap, plan of action, and value proposition of a crypto project.
Yield Farming: Earning interest by providing liquidity / loans on a lending protocol.

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DeFi Buzzwords Dictionary

DeFi Buzzwords: