Glossary

DeFi terms, demystified

A plain-language reference for the words you'll meet across the on-chain world.

Annual percentage yield — the real rate of return on an asset over a year, accounting for compounding.

A distribution of tokens to wallet holders, often used to reward early users or bootstrap a community.

Automated market maker — a smart contract that prices and settles trades from a liquidity pool instead of an order book.

A protocol that moves assets between separate blockchains.

A batch of transactions added to a blockchain and confirmed by the network.

Who controls the private keys to an asset. Self-custody means you hold them; custodial means a third party does.

Assets locked to back a loan or position, returned when the obligation is settled.

Decentralized finance — financial services built on public blockchains without traditional intermediaries.

A decentralized exchange where trades settle peer-to-peer through smart contracts.

The fee paid to process a transaction on a blockchain, priced by network demand.

The on-chain process by which token holders vote on changes to a protocol.

How easily an asset can be bought or sold without moving its price.

The shared record of every transaction on a blockchain.

A wallet that requires several signatures to authorize a transaction.

The live, production blockchain where real value moves.

Locking tokens to help secure a network in exchange for rewards.

The difference between the expected and executed price of a trade.

Self-executing code on a blockchain that runs exactly as written.

Software or hardware that stores the keys used to access on-chain assets.

The vision of an internet built on user-owned, blockchain-based applications.

The income generated by an asset, often from staking, lending or providing liquidity.

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