EUCI Dictionary

A

Account abstraction

Account abstraction is a proposal, primarily within Ethereum, aiming to simplify user experiences by making all accounts operate in a similar manner. This concept allows for more flexible management of accounts, enabling smart contracts to handle functions typically reserved for externally owned accounts (EOAs), such as initiating transactions. It seeks to enhance security and usability, potentially allowing users to recover accounts or set up complex transaction rules without needing separate smart contracts for each action.

Address

Addresses are identifiers of crypto wallets.

Airdrop

Airdrops are used to distribute new or existing tokens to many wallet addresses, often as part of a promotional campaign or as a reward to early adopters.

AMM

Automated Market Makers or AMMs are protocols that secure liquidity to Decentralized Exchanges through the use of Liquidity pools.

API

An application programming interface (“API”) is a set of protocols that allow computer programs to communicate, and are often used to offer services or data to other applications. In simple terms, an API is a messenger allowing two apps to talk with each other.

Arbitrage

Arbitrage is a natural mechanism for markets to achieve equilibrium. Arbitrage in web3 is made possible by the value of assets within different web3 ecosystems. For example, the price of Ethereum is $2000 on Uniswap, but it is $1990 on Sushiswap. An arbitrager can take advantage of this gap by buying ETH on Sushi to resell on Uniswap, instantly pocketing $10 per ETH (minus gas fees). Arbitrage is a key factor in MEV.

Archival Nodes

An archival node is a full node in the blockchain that keeps a complete history of transactions and address state changes since the genesis block.

Augmented Reality

Augmented Reality, or AR, is only one possible component of web3, which utilises glasses, smartphones and other devices to recreate real-world experiences in a digital environment. AR could involve 3D modelling, sensing, tracking and intelligent interaction.

B

Base Fee

The base fee is an algorithmically determined fee that users on the Ethereum blockchain must pay to complete a transaction. It is designed to help smooth transaction fees and prevent sudden spikes by targeting 50% full blocks. Depending on how full the new block is, the Base Fee is automatically increased (the block is more than 50% full) or decreased (the block is less than 50% full).

Beacon Chain

The outline of common terms in the domain of web3 would also point to the Beacon Chain. It is one of the popular additions to a web3 dictionary for newcomers and describes the scope for innovation in web3. The Beacon Chain is a dominant element in the web3 infrastructure of Ethereum. It has been developed as the foundation for shifting to Proof of Stake consensus from the Proof of Work consensus mechanism.

Bitcoin

Bitcoin is the original decentralised digital currency created by the pseudonymous developer/developers Satoshi Nakamoto. Bitcoin transactions are executed and recorded on the Bitcoin blockchain network.

Block Gas Estimator Feed

The Block Gas Estimator Feed estimates gas prices for the next block based on the in-flight transactions currently in the mempool (pre-chain transactions).

Block Reward

The block reward defines the reward offered to the validator or miner after successfully hashing a transaction block. Block rewards could be offered as a combination of cryptocurrencies and transaction fees. It is important to note that the composition of block rewards would depend on the cryptocurrency’s policy.

Block Size

Block size indicates how much transaction data an individual block can hold. Different blockchain networks can have different size blocks.

Blockchain

Blockchain-based technologies can be understood as a distributed network of computers, ideally organised in a decentralised way. These computers mutually agree on a common state while tolerating failures (including malicious behaviour) to some extent. Blockchains consist of “blocks” of data and networks of nodes. Each block collects transaction information, while each node holds a record of all verified transactions. The nodes verify new blocks submitted to the network and either add to the blockchain as immutable data or reject them if invalid. Block size varies depending on the blockchain. For example, the Bitcoin network block size is limited to 1 MB, whereas Ethereum blocks have no fixed size. Each block can be identified by its own block number and hash.

Blockchain Explorer

A Blockchain Explorer is an application that works with a blockchain network as an API to display information about activity on the blockchain. As a result, blockchain explorers can help find specific details on blockchain networks. For example, Etherscan delivers the practical functionalities of a blockchain explorer on Ethereum and many other blockchain networks.

Blockchain Governance

Blockchain governance integrates norms and culture, laws and codes, and people and institutions that facilitate coordination and determine a given organisation. The term can also specifically refer to off-chain governance or on-chain governance. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on Blockchain Governance here.

Blockchain trilemma

The blockchain trilemma accounts for three factors: security, scalability, and decentralisation. The trilemma implies that you have to sacrifice one of the terms to achieve better results in the other two.

Bridge

Bridges are protocols through which two blockchain ecosystems interact.

Brussels Effect

This term describes the European Union’s ability to regulate and set standards that extend beyond its borders and affect markets and people worldwide.

Burn

“Burning” is the process of destroying and removing tokens or NFTs from circulation. Burning is the opposite of minting.

Byzantine Fault Tolerance

Byzantine Fault Tolerance aims to ensure that a network has been designed to address the concerns of failure due to technical failure or malicious intent of users.

C

Cancel transactions

A cancel transaction is a type of replacement transaction in which a user submits an identical transaction with a higher gas limit. The new replacement transaction is validated before the previous transaction. Once the new replacement transaction is confirmed, the original transaction will be dropped.

Censorship

Censorship in MEV is the process of manipulating blocks to exclude specific transactions for a number of blocks. This is done, for example, to maintain an arbitrage opportunity or make a specific NFT purchase before another user. Sometimes, censorship efforts will delay transactions for so long that they fail. This is especially harmful because it causes the sender to lose the gas fees spent on the transaction.

CEX

Centralized Exchanges or CEX are exchanges of cryptocurrencies that operate similarly to traditional banks with the use of an intermediary.

Compute Units

A compute unit is a measure of the requests needed to query computationally expensive API endpoints. Each request has both price and rate limit costs that are measured in terms of compute units.

Confirmed Transaction

A confirmed transaction is a transaction that has been included in a block and permanently added to the blockchain.

Consensus

The protocol by which blockchains come to an agreement about transactions. All nodes in the network must achieve consensus for transactions to be processed and added to the blockchain. Proof-of-work and proof-of-stake are examples of consensus protocols.

Council of the EU

The Council of the European Union, also known as the Council of Ministers, is one of the EU’s key decision-making bodies. It represents the governments of the EU Member States, with ministers from each country attending meetings to adopt legislation and coordinate policies. The Council’s composition and leadership vary depending on the policy area discussed, ensuring that the relevant national ministers participate in decisions directly affecting their areas of responsibility. It works closely with the European Parliament in legislating EU laws and policies, playing a crucial role in the EU’s legislative process.

Cross-chain

A feature that allows Web3 development tools to work on multiple blockchain networks and access and share data across different blockchains. Also, there is something known as “cross-chain bridging”, enabling users to transfer tokens and data between blockchains.

Cryptoeconomics

Cryptoeconomics describes an interdisciplinary, emergent and experimental field that draws on ideas and concepts from economics, game theory and related disciplines in the design of peer-to-peer cryptographic systems. Cryptoeconomic systems try to guarantee certain kinds of information security properties using incentives and/or penalties to regulate the distribution of efforts, goods and services in new digital economies. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on Cryptoeconomics here.

Cryptography

Cryptography is a crucial requirement in web3 for ensuring advantages for security. It refers to a collection of secure communication practices that decide how much data shared can be seen by other users in the network. In most cases, cryptography involves the conversion of data into different formats that would be unrecognizable to unauthorized users. One of the basic examples of cryptography points at encrypted messages, which replace letters with numbers in a combination that only the sender and receiver can understand.

D

DAO

A decentralised Autonomous Organization (DAO) is a blockchain-based system that enables people to coordinate and govern themselves. Its governance is decentralised (i.e., independent from central control), mediated by a set of self-executing rules deployed on a public blockchain. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on DAOs here.

DeFi

Decentralized Finance or DeFi is a blockchain-native financial technology that is characterized by the omission of Intermediaries that are present in traditional finance.

DEX

Decentralised Exchange, or DEX, is a peer-to-peer marketplace where traders exchange cryptocurrencies directly without the help of an intermediary.

Digital Scarcity

Digital Scarcity is a credibly maintained limitation, imposed through software, of digital information, goods or services that may be accessed and used entirely digitally. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on Digital Scarcity here.

Directive

In the EU context, a Directive is a legislative act that sets out a goal that all EU countries must achieve. However, it allows each country to devise its own laws to reach these goals through the transposition of the directive. This flexibility allows Member States to consider local circumstances and preferences while ensuring that the objectives set by the EU are met across all Member States.

Double Spending

Double spending refers to the risk of a cryptocurrency being used more than once. This issue is critical because digital information can be replicated easily. Blockchain technology addresses this problem by maintaining a secure, immutable ledger of transactions, ensuring that once a cryptocurrency unit is spent, it cannot be used again.

Dropped Transaction

A dropped transaction is a transaction that was not mined and confirmed on the blockchain and subsequently has been dropped from the transaction queue in the memory pool (also known as the mempool). Common causes of dropped transactions include a low nonce value, a high nonce value, and insufficient gas.

E

EIP

An Ethereum Improvement Proposal (“EIP”) is a protocol anyone can use to request or suggest improvements to the Ethereum blockchain. The Ethereum community then reviews the EIP, and if approved, the proposal is added to the network in the next available update.

ENS Domain

ENS domains are unique and come with a “.eth” extension, following the ERC-721 standard. Ethereum Name Service (“ENS”) is an extensible, distributed, open Ethereum-based naming service. ENS’ purpose is to map human-readable names (e.g., “adam.eth”) to machine-readable identifiers like Web3 wallets. See more about the ENS Domains here.

Epoch

An epoch is a unit of time on a blockchain, generally measured in the time it takes for the network to process a certain number of blocks. An epoch on the Ethereum network is the amount of time it takes to process 30,000 blocks, for example.

ERC

ERC stands for “Ethereum Request for Comment.” An ERC is derived from an Ethereum Improvement Proposal (EIP). ERCs describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards. Network upgrades are discussed separately in the Ethereum project management repository. The most popular ERC standards are ERC-20 and ERC-721.

ERC20

ERC-20 is a widely accepted standard for creating tokens on the Ethereum blockchain. It specifies a set of rules that all Ethereum-based tokens must follow, ensuring compatibility within the ecosystem. These rules cover how tokens can be transferred, how transactions are approved, how users can access data about a token, and the total supply of tokens.

ESA

A European Supervisory Authority is one of the specific regulatory bodies established by the European Union to oversee the stability and integrity of the financial system within the EU. These include the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA). Each authority focuses on its respective sector, ensuring financial markets are transparent, efficient, and operate smoothly while protecting consumers.

ESAs

The European Supervisory Authorities (ESAs) comprise three regulatory agencies: the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA). These authorities oversee the European Union’s financial system, ensuring stability, transparency, and the protection of depositors, investors, and policyholders. Each ESA specialises in its respective sector, working to enhance the functioning of financial markets and strengthen the international supervisory and regulatory framework.

ESMA

The European Securities and Markets Authority (ESMA) is the EU’s financial markets regulator and supervisor. Established to strengthen the EU’s financial market supervisory framework, ESMA aims to ensure the integrity, transparency, and efficiency of financial markets and strengthen investor protection. ESMA’s responsibilities include assessing risks to financial stability, developing a single rulebook for EU financial markets, promoting supervisory convergence, and directly supervising specific financial entities.

Ethereum

Ethereum is the community-run technology powering the cryptocurrency ether (ETH) and thousands of decentralized applications. It presents a global network of computers that follow the Ethereum protocol. The Ethereum network acts as the foundation for communities, applications, organizations and digital assets that anyone can build and use. To learn more about Ethereum, you can visit the main website here.

Ethereum 2.0

Ethereum 2.0 is a deprecated term that was used to describe the consensus layer of Ethereum as part of its migration via The Merge from a Proof-of-Work consensus mechanism to Proof-of-Stake consensus. Additionally, Eth1 is now referred to as the “execution layer.”

Ethereum Virtual Machine (EVM)

The Ethereum Virtual Machine (EVM) is a software application that blockchain developers use to deploy decentralized applications (Dapp) on the Ethereum blockchain. The EVM interacts with Ethereum’s accounts, smart contracts, and distributed ledger.

EUCI

European Crypto Initiative or EUCI is a Brussels-based non-profit advocacy organization that aims to shape EU regulation in favour of open, permissionless blockchain technology. You can read more about the educational and advocacy work of EUCI on the website here.

European Commission

The European Commission is part of the executive of the European Union. It operates as a cabinet government, with 27 members of the Commission headed by a President. It includes an administrative body of about 32,000 European civil servants. You can read more about the EU Commission on their official website here.

EVM

Ethereum Virtual Machine (“EVM”) is the engine for transaction code execution on Ethereum. EVM enables the development of thousands of different applications on one platform. Smart contracts written in smart contract-specific programming languages are compiled into “bytecode,” which EVM can read and execute.

Exchange

A general term for either a centralised or decentralised crypto exchange.

F

Failed Transaction

A failed transaction is a transaction on the Ethereum blockchain that does not succeed, cannot be reversed, canceled, or refunded.

Fiat

Fiat currencies are currencies issued by governments or states that are not backed by commodities, such as gold or other precious metals.

Fork

A fork occurs when a blockchain splits into two different branches. There can be many reasons for a fork (usually upgrades), and the community usually votes on the decision to fork a network.

Full Nodes

A full node is any computer or server that downloads the entire Ethereum blockchain, addresses states, and validates new blocks.

Fungible Token

Fungible tokens are generally understood as tokens that are identical to each other and can be exchanged on a one-to-one basis. This category includes most cryptocurrencies, like Bitcoin and Ethereum, where each unit has the same value as another unit of the same type.

G

Gas

Gas is a term that describes transaction fees that occur in blockchain ecosystems, such as in the context of Ethereum transactions.

Gas Limit

The gas limit is the maximum amount of gas miners are authorised to consume to complete a transaction.

Genesis Block

The first ever block created on a blockchain.

Gwei

A gwei is one billionth of an ETH, the native token of the Ethereum blockchain.

H

Hard Fork

A hard fork occurs when a blockchain network splits into separate branches due to upgrades or other changes. Hard forks are backwards incompatible, meaning the two separate networks cannot be reconciled once the hard fork occurs.

Hashrate

A blockchain’s hashrate measures the computational power on the network in terms of calculations per second.

I

IPFS

The Inter Planetary File System (“IPFS”) is a distributed system for storing and accessing files, websites, applications, and data. Read more about the IPFS on their official website here.

L

Layer1

Layer 1 protocols refer to the foundational blockchains that form the base architecture of a blockchain network. These are the primary platforms on which various decentralised applications (DApps), smart contracts, and additional protocols are built and operated. The term “Layer 1” differentiates these base blockchains from “Layer 2” solutions, which are built on top of the Layer 1 blockchains to enhance scalability, speed, and transaction cost efficiency. Bitcoin and Ethereum are quintessential examples of Layer 1 protocols, serving as the foundational infrastructure for a wide range of applications and secondary protocols.

Layer2

Layer 2 protocols are technologies developed to enhance the scalability, speed, and efficiency of base-layer blockchains, often called Layer 1 protocols, without altering the foundational layer itself. These protocols operate on top of Layer 1 blockchains, providing solutions to limitations related to transaction processing capacity, speed, and cost, which can become significant hurdles as a blockchain network grows and its usage increases.

Light Nodes

A light node is a computer that connects to full nodes as a gateway to the blockchain. Light nodes do not validate blocks or maintain the entire blockchain and address state.

Liquidity

Liquidity is the ease with which one token or digital asset can be converted to another.

Liquidity Pool

Liquidity pools represent the (crypto) funds locked by liquidity providers and are crucial for the functioning of decentralised exchanges.

M

Mainnet

A mainnet is the production version of a blockchain network where transactions and other operations are recorded and processed. It is a blockchain protocol’s primary and original network, as opposed to a testnet.

Max Priority Fee

An optional additional fee that is paid directly to miners, the Max Priority Fee incentivises miners to include a specific transaction in a block.

Member State

A Member State, in the context of the European Union (EU), refers to any country that is a part of the EU. Membership in the EU means that the country has agreed to abide by the EU treaties and laws, which involve a range of political, economic, and legal commitments. Currently, there are 27 Member States in the European Union, each with its own unique contribution to and participation in the Union’s processes and policies.

Mempool

Also known as the “transaction pool,” the “transaction queue,” or “pre-chain,” the mempool is a set of in-memory data structures propagated across Ethereum nodes that store pending transactions before they are mined.

Merkle Root

A Merkle root is the single top hash of a Merkle tree. It verifies all transactions within a block.

Merkle Tree

A Merkle tree, or hash tree, is a data structure blockchains use to validate and summarise large data sets securely.

MEV

Maximal extractable value (MEV) is a measure devised to study consensus security by modelling the profit a miner (or validator, sequencer, or another privileged protocol actor) can make through their ability to arbitrarily include, exclude, or re-order transactions from the blocks they produce.

MiCA

The Markets in Crypto-Assets Regulation (MiCA) institutes uniform EU market rules for crypto-assets. The regulation covers crypto-assets that are not currently regulated by existing financial services legislation. Key provisions for those issuing and trading crypto-assets (including asset-reference tokens and e-money tokens) cover transparency, disclosure, authorisation and supervision of transactions. Read more about MiCA Regulation in our EUCIPEDIA here.

Mining

Mining is a competitive transaction verification process in crypto protocols using the Proof of Work verification method. Miners in this process are usually rewarded with some cryptoassets. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on Mining here.

Minting

Crypto Minting is the process of creating new coins or blocks in the blockchain.

N

NCA

National Competent authority(ies) or NCA is a term used in EU law to refer to the authorities (regulators) of individual Member States.

NFT

A non-fungible token, or NFT, is a unique digital item stored on blockchain that is not interchangeable (“fungible”) with other digital items or assets. NFTs have a wide range of use cases and can represent almost anything.

O

Off-chain

Off-chain means any transaction or data that exists outside the blockchain. Because often committing every transaction on-chain can be expensive and inefficient, third-party tools like oracles that handle pricing data or layer 2 solutions execute a higher throughput of transactions, handle a bulk of the processing work off-chain, and submit information on-chain at less frequent intervals.

On-chain

On-chain is an umbrella term that includes any transaction or data that is available on the blockchain and visible to all nodes on the blockchain network, such as mempool data, historical transactions, and account information.

Oracle

An oracle bridges the blockchain and the external world, most often enabling smart contracts to interact with and access data from outside their native blockchain environment. This data can include anything from price feeds and temperature readings to election results, which smart contracts use to execute their terms under specific conditions. Oracles thus expand smart contracts’ applicability and functionality by providing them with the necessary external information to perform their operations accurately and effectively.

P

Post-state

Post-state refers to the state of a smart contract on the blockchain after it has been executed. Post-state includes the final values of all variables and the status of the contract, including any changes made to the blockchain due to the contract’s execution.

Pre-chain

Pre-chain is another way to describe transactions that are currently in progress. Pre-chain transactions are also known as pre-consensus transactions, and are transactions that are currently in the mempool.

Pre-consensus

Pre-consensus is another way to describe transactions that are not yet confirmed on the blockchain. Pre-consensus transactions are also known as pending transactions and pre-chain transactions.

Proof-of-Authority

Proof-of-authority (“PoA”) is a consensus mechanism where the nodes that validate transactions and create new blocks are chosen based on their identity, typically by a central authority.

Proof-of-History

Proof-of-history (“PoH”) is a consensus mechanism that allows a blockchain to efficiently verify the inclusion of historical data without requiring each node to store all historical data. It uses a combination of hash chains and Merkle trees to prove that no one has tampered with the data.

Proof-Of-Stake

Proof-of-stake (“PoS”) is a blockchain consensus mechanism that achieves consensus by choosing the next validator using various combinations of random selection, including how many coins validators have “staked” or “locked” in the network.

Proof-Of-Work

Proof-of-work (“PoW”) is a consensus mechanism by which a blockchain network achieves distributed consensus by choosing the next block producer (miner) via a computational race. The miner who solves a cryptographic puzzle the fastest gets to add the next block to the chain and is rewarded for their work in cryptocurrency.

Public Key

A public key is part of a cryptographic pair that includes both a public and a private key. These keys are essential for ensuring the security and functionality of crypto asset transactions. The public key is derived from a private key through a mathematical algorithm.

R

Regulation

A regulation is a legal act of the EU that becomes immediately enforceable as law in all member states simultaneously. Regulations are a primary form of EU legislation designed to ensure uniformity and legal certainty across the EU’s internal market. Unlike directives, which require member states to achieve a certain result without dictating the means of achieving that result, regulations are directly applicable and do not require national legislation to be passed for implementation. See how the EU defines the regulations officially here.

Reputation

Reputation in a blockchain-based system is a digital representation of an entity’s standing or status in a specific domain. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on the Reputation here.

RTS

Regulatory Technical Standards (RTS) in the EU are delegated acts, prepared by a European Supervisory Authority (ESA) to further develop, specify, and ensure consistent harmonisation of rules included in a basic legislative act. They aim for technical refinement without implying strategic decisions or policy choices, based on the legislative framework they complement. Before being adopted by the European Commission, RTS undergo public consultations and analyses to assess their impact, ensuring they align with EU interests without altering strategic or policy core values. See more about the Level 2 measures and the so-called RTS on the European’s Commission official website.

S

Satoshi

A “satoshi” is a small fraction of a Bitcoin. Specifically, one satoshi is equivalent to 100 millionth of a Bitcoin and is named after Satoshi Nakamoto, Bitcoin’s enigmatic creator.

SDK

A software development kit (SDK), also known as a devkit, is a collection of software tools and programs developers can use to deploy an application in their development environment quickly.

Seed Phrase

A seed phrase consists of a series of random words arranged in a specific order, which is the key to unlocking and accessing your cryptocurrency wallet. This sequence is also vital for restoring a crypto wallet on any device. It is crucial to keep your seed phrase secure and confidential.

Self-sovereign identity

Self-sovereign identity (SSI) refers to an identity management framework that functions autonomously, free from the oversight of external public or private entities. It relies on decentralised technologies to emphasise user security, privacy, autonomy, and empowerment. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on the Self-Sovereign Identity here.

Sharding

Sharding is a technique that divides a blockchain network into several smaller segments or sub-networks, known as “shards.” This process allows for transactions and operations to be processed in parallel, significantly enhancing the overall capacity and speed of the network. By implementing sharding, a blockchain can achieve greater scalability and efficiency, making it more capable of handling a larger volume of transactions.

Sidechain

A sidechain is an independent blockchain designed to enable tokens from a primary blockchain to be utilized within its separate environment, with the flexibility for these tokens to return to their original blockchain as needed.

Signing

In the Web3 context, “signing” refers to generating a digital signature through the use of the wallet’s private keys, employing both cryptographic and encryption techniques. Whenever a person signs something with their wallet, the party on the receiving end (known as the “signee”) deciphers and confirms that the action originated from your private key before finalizing the transaction.

Smart contract

A smart contract consists of code that is executed within a blockchain framework, originating from source code that was compiled for this purpose. When specific conditions are satisfied, this code is executed across the network by the blockchain’s validators (or miners). The activation of a smart contract occurs through a transaction on the blockchain, leading to an alteration in the state of the blockchain. See Vol 10, Issue 2 of the Glossary of Decentralised Technosocial Systems on the Smart Contracts published by the Internet Policy Review here.

Solana

Solana is an open-source, decentralized blockchain platform focused on providing scalability and ease of use for dapp developers. It supports the execution of smart contracts and enables the creation of both fungible and non-fungible tokens, alongside dapps. The native digital currency of Solana, known as SOL.

Solidity

Solidity ranks among the top Web3 programming languages, specifically crafted for the Ethereum blockchain. It’s an object-oriented language tailored for the development of smart contracts.

Speed Up Transactions

“Speed Up Transactions” refers to the practice of substituting an existing, yet-to-be-confirmed transaction with a new one. This method is often employed by individuals seeking to conduct their transactions more swiftly than their rivals.

Staking

Staking usually involves securing tokens within a blockchain network as a contribution to the proof-of-stake (PoS) consensus mechanism. By committing tokens to help validate and process transactions, participants earn rewards, calculated as a percentage of the total staked amount, as compensation for their role in maintaining network security and functionality.

Stale Block

Stale blocks are those which were successfully mined but not incorporated into the blockchain network due to another block of equivalent height being accepted into the network sooner or being mined more quickly.

State Channel

A state channel represents a method for scaling at layer 2, enabling users to perform transactions off-chain, with only the initiation and finalization of these transactions being recorded on the blockchain. This technique dramatically lowers expenses and boosts the efficiency of the network’s processing capacity, all the while maintaining the integrity of its security.

Stuck Transactions

A stuck transaction is when transactions cannot be mined. Many stuck Ethereum transactions are caused by nonce gaps, and until the nonce gap has been resolved, wallets cannot process new transactions.

T

Testnet

A testnet is a test version of a blockchain network used for testing and development purposes. It allows developers to experiment with and test dapps without using real assets.

Token

A token digital representation of an asset or interest in something and is built on a blockchain. There are numerous types of tokens, such as Non-Fungible Tokens, e-money tokens, utility tokens, asset-referenced tokens, and more.

Tokenomics

A combination of the words token and economics, which refers to all the aspects of a cryptocurrency that can impact the price such as total supply, vesting, and utility of a token.

TPS

Transactions per second (“TPS”) defines the number of transactions a blockchain network can process per second. Higher TPS means a network can process more transactions per second, making higher TPS blockchains the increasingly preferred option for developers.

Transaction

A transaction on a blockchain is the action of buying, selling, swapping, or trading a crypto asset or NFT. For example, it can mean sending a crypto asset from one address to another, either on the same network or across different chains (provided both networks support cross-chain transactions).

Transaction Event Stream

A transaction event stream is a real-time stream of transaction events that are happening in the mempool.

Transaction Status

The transaction status is the current state of your transaction in the blockchain. Transaction statuses include: confirmed, failed, dropped, and stuck.

Trialogue

Trialogues in the EU are informal negotiations between the European Parliament, the Council of the European Union, and the European Commission. These discussions aim to reach a compromise on legislative proposals, facilitating the EU’s complex legislative process by agreeing on texts before they are formally adopted by the co-legislators: the European Parliament and the Council. See the official definition provided by the European Union on Trialogue here.

Trust in blockchain-based systems

Trust can best be understood as a relational attribute between a social actor and other actors (interpersonal trust), actors and institutions (institutional or systemic trust), and institutions and (trusting) actors (trust as shared expectations), where institutional frameworks define the nature and strength of trust relationships between different actors. See Volume 10, Issue 2 of the Glossary of Decentralised Technosocial Systems published by the Internet Policy Review on the Trust in Blockchain-Based Systems here.

TVL

Total value locked (“TVL”) is the measurement of the total amount of assets locked in smart contracts on a blockchain network. TVL is generally used to assess the popularity of a DeFi protocol or ecosystem.

V

Validator

A validator participates in a blockchain network and validates and adds new transactions to the block. Validators use consensus algorithms to agree on the blockchain’s state and maintain its integrity.

W

Wallet

A cryptocurrency wallet is a physical device or software that stores cryptocurrency keys and allows individuals to access a particular blockchain network and manage their crypto assets or tokens. A crypto wallet can have multiple crypto addresses attached to it. There are numerous types of crypto wallets (e.g. custodial, non-custodial, cold, hot and paper wallets).

Web3

Web3 is a colloquially designed but industry-accepted term for 3rd generation of internet technology that utilizes distributed ledger technology to enable the functioning of decentralized, permissionless, peer-to-peer protocols.

Wrapped token

Wrapped tokens allow users to transact with cryptocurrencies via blockchains or token standards outside their original design scope. Wrapped tokens are usually created by holding the original asset in a digital vault, then issuing a “wrapped” token representing the vault assets. They allow for greater interoperability between previously non-compatible digital assets.

Z

zk-SNARK

Zero-Knowledge Succinct Non-interactive Arguments of Knowledge (zk-SNARKs) are a form of cryptographic proof that maintains the privacy of a transaction while validating it on a blockchain’s consensus algorithm. It is a type of zk-proof that was first popularized by privacy protocols like Zcash and Monero. Zk-SNARKs are often described as “zero-knowledge proofs that require a trusted setup to generate the keys used to create and validate the proofs”.

ZKP

Zero-knowledge proof (ZK proof, ZKP) is a cryptographic method to prove the validity of a statement without revealing information about the statement.