Glossary
Here we include an index of terms commonly used around the Beyond ecosystem, listed in alphabetical order. For more general terminology, we can also suggest CoinMarketCap's crypto glossary.
APRβ
Annual Percentage Rate (APR) denotes the yearly interest rate without compounding effects. Example: A $100 investment at a 5% APR yields $105 after one year.
APYβ
Annual Percentage Yield (APY), akin to APR but incorporates compounding, thereby increasing the yield over time due to the interest itself earning additional interest.
Bitcoin Asset Standardsβ
Bitcoin Asset Standards (a.k.a. Token Standards) refer to the set of rules and protocols designed for creating and managing digital assets on the Bitcoin blockchain. These standards define how tokens are issued, transferred, and interact within the Bitcoin ecosystem. Some of the most popular standards are BRC-20, Runes, and TAP.
Blockchainβ
Blockchains, sometimes referred to simply as "Networks," are systems that record transactions across multiple computers to ensure security, transparency, and immutability. Each record, or 'block', is linked to the one before it, forming a chain. This architecture allows for decentralized data management and verification, serving as the foundation for cryptocurrencies and a wide range of applications.
Bridgeβ
Bridges refer to technology that enables the transfer of assets and information between two distinct blockchain ecosystems. It facilitates interoperability and liquidity across different networks, allowing users to seamlessly access and leverage the unique advantages of each system.
Cryptocurrencyβ
Cryptocurrencies, also known as 'tokens', are a digital or virtual form of currency that uses cryptography for security and operates on a decentralized network, typically a blockchain. Unlike traditional currencies, cryptocurrencies are distinguished by their lack of physical form and decentralized nature, facilitating peer-to-peer transactions without the need for intermediaries or a central human authority.
dAppβ
Decentralized Applications (dApps) are software applications that operate without central authority control, in a fully feature-complete manner.
DeFiβ
Decentralized Finance (DeFi) refers to financial services and applications built on blockchain technology, enabling peer-to-peer transactions with smart contracts that require no traditional (human) intermediaries. DeFi platforms offer a wide range of services, including lending, borrowing, trading, and yield farming, with the goal of democratizing access to financial tools and services. The global DeFi market is currently valued at around US$100 billion, with significant growth potential from promising emergent areas like Real World Assets (RWA).
DEXβ
Decentralized Exchanges (DEX) are blockchain-based exchanges facilitating peer-to-peer asset transactions without central oversight, using algorithms and liquidity pools for pricing, thus enabling direct asset control and custody by users.
DLTβ
Distributed Ledger Technology (DLT) is the foundational technology for blockchain and DAG networks, featuring a database distributed across multiple sites, regions, or participants.
Governanceβ
Governance in the blockchain context refers to the mechanisms and processes through which decisions are made within a decentralized network or protocol. It typically involves token holders voting on proposals related to protocol updates, improvements, and the direction of the project, ensuring a democratic and transparent approach to development and management.
Inscriptionsβ
Bitcoin Inscriptions embed arbitrary data, including text and images, directly onto the Bitcoin blockchain by utilizing space within transaction outputs. This method turns individual satoshis, the smallest unit of Bitcoin, into unique assets with attached metadata, effectively creating non-fungible tokens (NFTs) on Bitcoin.
Interoperability Protocolsβ
Interoperability protocols are technological frameworks that enable seamless communication and interaction between different blockchain networks. These protocols facilitate the transfer of data, assets, and other digital information across diverse blockchains, allowing for cohesive operation. By bridging the gaps between individual blockchains, interoperability protocols enhance the blockchain ecosystem's functionality, efficiency, and accessibility, crucial for the proliferation of decentralized applications (dApps), enabling cross-chain transactions, and fostering a more integrated digital economy.
Layer 1 (L1)β
Layer 1s, or L1s, refer to the foundational level of a blockchain network, encompassing the basic architecture and protocols that define its functionality. This includes the consensus mechanism (like Proof of Work or Proof of Stake), the native cryptocurrency, and the network's capacity to process and record transactions. Layer 1 solutions and protocols aim to improve the utility, scalability, security, and decentralization of the blockchain itself.
Layer 2 (L2)β
Layer 2s, or L2s, are built on top of Layer 1 blockchains to enhance scalability and efficiency. They consist of off-chain solutions or secondary frameworks that handle transactions outside the main blockchain, settling only the final state on-chain. Examples include state channels, sidechains, and rollups. While Layer 2 solutions may increase transaction speeds and reduce costs, the trade-off is that they may also compromise security and decentralization to some extent.
Liquidityβ
Liquidity refers to the ease with which an asset can be converted into another assetβor cashβwithout significantly affecting its price. High liquidity is associated with a stable and healthy financial ecosystem, as it facilitates smoother transactions and more accurate price discovery.
Market Capβ
Market Capitalization (a.k.a. Market Cap or MCap) is the total value of a cryptocurrency, calculated by multiplying its current price by the total number of coins in circulation. It is a key and common metric for assessing the size, value, and performance of a cryptocurrency in the market.
Multisigβ
Multisig, short for multi-signature, is a common security feature in the blockchain industry that requires multiple private keys to authorize a transaction. This mechanism enhances security by distributing control and trust among multiple parties, reducing the risk of unauthorized access or misuse of funds.
Non-Fungible Token (NFT)β
NFT, or Non-Fungible Token, is a unique digital asset that is stored on a blockchain and cannot be replicated. NFTs are used to represent ownership of digital or physical assets, such as art, collectibles, or real estate. Each NFT is unique and cannot be interchanged with another, making them distinct from fungible tokens.
Omnichainβ
Omnichain technology enables systems or protocols to operate simultaneously across various blockchain networks, ensuring seamless interoperability and integration between different chains. This facilitates the exchange of assets, data, and smart contract functionalities, creating a unified and efficient blockchain ecosystem that supports diverse applications and services.
Oraclesβ
Off-chain data feeds that supply real-world information to blockchain smart contracts, enabling interactions with external data.
Permissionlessβ
Describes systems or frameworks where access or participation is not controlled by any single entity, allowing for use without a central authority that can arbitrarily regulate who or how the system can be used.
Satoshis ('Sats')β
A satoshi is the smallest unit of Bitcoin, equivalent to one hundred millionth of a Bitcoin (0.00000001 BTC). Named after Bitcoin's pseudonymous creator, Satoshi Nakamoto, satoshis are used to measure and denominate fractional amounts of Bitcoin.
Smart Contractβ
Smart contracts are self-executing contracts with the terms directly written into code. They automatically enforce and execute the terms of agreement between parties, which is essential to automate decentralized applications and transactions.
Stakingβ
Staking involves depositing tokens into a protocol to support network security and operations, often yielding rewards or governance privileges in return.
Swapβ
Swapping enables direct cryptocurrency exchanges without intermediaries, typically executed on Bridges or DEXs through algorithmically determined rates.
Token (Fungible)β
Fungible tokens (usually referred to simply as "tokens") are digital assets that are interchangeable with other identical tokens, sharing the same value and characteristics. For example, USDT is a fungible token, as each unit of USDT is identical to every other unit. These tokens are used to represent ownership or value in a standardized manner, allowing for easy transferability and uniformity in transactions, as opposed to non-fungible tokens.
Total Value Locked (TVL)β
Total Value Locked (TVL) represents the total amount of assets deposited in a DeFi platform, typically used as a measure of the protocols's size, activity, and security.
Web3β
Web3 is a term used to describe the next iteration of the internet, focusing on decentralization, transparency, and user control. It is built on blockchain technology and is characterized by the use of decentralized applications (dApps), smart contracts, and non-fungible tokens (NFTs).
Yield Rewardsβ
Yield Rewards refer to the earnings generated from various DeFi activities, such as staking, providing liquidity, or participating in yield farming. These rewards, often distributed in the form of tokens, incentivize users to contribute to the ecosystem's security, liquidity, and overall growth.