Legal Archives

Glossary

This glossary provides clear definitions for key jargon and components that frequently appear in the landscape of NFTs, cryptocurrencies, and blockchain technology. Many of these definitions draw inspiration from established glossaries in the crypto space .

A

Airdrop

A mechanism whereby a project distributes free digital assets—such as cryptocurrencies, tokens, or NFTs—to users’ wallets. Airdrops are commonly used to reward early adopters, incentivize community engagement, or raise awareness about a new initiative .

Alpha

Refers to exclusive or insider information that gives one an advantage in making informed investment or engagement decisions within the NFT or crypto market .

Apeing

A colloquial term describing the impulsive purchase of an asset, typically driven by a fear of missing out (FOMO). This behavior is characterized by rapid buying without conducting proper research or due diligence .

Asset

Any resource—digital (like NFTs and tokens) or physical—that holds value. Within crypto and blockchain contexts, assets usually refer to digital properties that can be owned, traded, or utilized within an ecosystem.

Avatar / Avatar Project

An avatar is a digital representation or character, frequently used in profile pictures or as collectible art. An avatar project refers to a collection of such digital images—often consisting of unique, algorithmically generated pieces (e.g., 10k projects) like CryptoPunks or Bored Ape Yacht Club .

B

Bearish

A sentiment or outlook where investors expect the value of an asset or the broader market to decline. Being bearish often prompts selling or cautious trading behavior.

Bitcoin (BTC)

The first and most widely recognized decentralized cryptocurrency, introduced in 2009 by the pseudonymous Satoshi Nakamoto. Bitcoin operates on a peer-to-peer network and uses blockchain technology to secure and record transactions.

Blockchain

A distributed, immutable ledger that records and verifies transactions across a network of computers. Each block contains a list of transactions, cryptographically linked to form a secure chain. This technology is the backbone of cryptocurrencies and NFTs .

Blue Chip

A term used to describe well-established projects or tokens known for their stability and reliability. In the NFT space, blue chip collections are those that have garnered widespread recognition and consistent market value.

Bot

An automated software program or script used to perform tasks—such as executing trades, monitoring price movements, or sniping newly listed NFTs—on blockchain networks. Bots help users act faster in high-speed environments.

Bridge

A protocol that enables the transfer of digital assets or tokens from one blockchain network to another. Bridges facilitate interoperability between different ecosystems, often for a fee.

Bullish

Opposite of bearish; a sentiment where investors anticipate rising asset prices or an upward trend in the market, which may encourage buying activity.

C

Cryptocurrency

A digital or virtual form of currency that uses cryptographic techniques for secure transactions and operates independently of a central authority. Cryptocurrencies rely on decentralized networks and are recorded on blockchains.

Consensus

The process by which a blockchain network agrees on the validity of transactions and the order in which they are added to the ledger. Popular consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).

D

DAO (Decentralized Autonomous Organization)

A governance system run by smart contracts on a blockchain rather than by centralized leadership. DAOs empower community members to vote on decisions and manage project resources collectively.

DeFi (Decentralized Finance)

A suite of financial services—such as lending, borrowing, and trading—that operate on decentralized networks using smart contracts instead of traditional intermediaries like banks.

Digital Wallet

A software or hardware tool that securely stores a user’s digital assets (cryptocurrencies, NFTs, etc.) and handles transactions on a blockchain network.

Dapp (Decentralized Application)

An application that runs on a decentralized network, often using blockchain as its backend. Dapps offer enhanced transparency and security compared to traditional apps.

Degen

Short for “degenerate.” In crypto slang, it describes someone who takes high risks by investing impulsively in volatile or under-researched projects.

E

ERC-20

A standardized protocol used for creating and managing fungible tokens on the Ethereum blockchain. ERC-20 tokens are interchangeable and represent assets or utilities within a given ecosystem.

ERC-721

A protocol standard on Ethereum for creating non-fungible tokens (NFTs). Each ERC-721 token is unique and non-interchangeable, making it ideal for representing digital collectibles or artwork.

F

Faucet

A platform or application that gives away small amounts of cryptocurrency for free. Faucets are often used to introduce newcomers to digital currencies and help them learn how transactions work.

FOMO (Fear of Missing Out)

A psychological phenomenon where individuals rush to invest in a project or asset due to anxiety about potentially missing significant gains, often without proper evaluation.

FUD (Fear, Uncertainty, Doubt)

The spread of negative or misleading information intended to create a sense of insecurity among investors or within a community, sometimes used to influence market behavior.

G

Gas

A fee required for performing transactions or executing smart contracts on blockchain platforms (most notably on Ethereum). Gas fees incentivize network participants (miners or validators) to process and validate transactions.

Gas Limit

The maximum amount of computational work (gas) that a user is willing to allocate for a blockchain transaction. Setting an appropriate gas limit helps control transaction costs and execution.

Genesis Block

The very first block of a blockchain. It serves as the foundational element upon which all subsequent blocks and transaction histories are built.

Governance Token

A type of token that grants holders the right to vote on decisions and proposals affecting the development, management, or future direction of a blockchain project or protocol.

H

Halving

An event, most prominently associated with Bitcoin, that cuts the reward miners receive for processing transactions by half. Halving events reduce the supply rate of new coins and can impact market dynamics.

HODL

Originally a misspelling of “hold,” it has become a mantra encouraging investors to retain their digital assets over market volatility rather than selling at short-term lows.

Hash

The output of a cryptographic hash function—a fixed-length string derived from input data. Hashes are crucial in ensuring the integrity and security of data recorded on a blockchain.

I

Immutable

Refers to the characteristic of blockchain data that ensures once a transaction is recorded, it cannot be altered or deleted. This immutability fosters trust and security within the network.

ICO (Initial Coin Offering)

A fundraising mechanism in which new crypto projects sell a portion of their tokens to early investors, often used to support project development—functioning in a role similar to an IPO in traditional finance.

IEO (Initial Exchange Offering)

A variant of an ICO where tokens are sold directly through a cryptocurrency exchange. This model often provides additional oversight and credibility compared to standard ICOs.

L

Layer 1

The base level blockchain architecture (e.g., Bitcoin, Ethereum) that operates independently with its own native protocol and security infrastructure.

Layer 2

Solutions built on top of Layer 1 blockchains designed to improve scalability, reduce transaction fees, and increase throughput by processing transactions off the main chain while periodically reporting back to it.

Ledger

A digital record or database that stores the complete history of transactions on a blockchain. The ledger is decentralized and distributed across all nodes in the network.

M

Minting

The process of creating new digital tokens or NFTs and recording their existence on the blockchain. Minting transforms a digital file into a verifiable and tradable asset.

Metaverse

A virtual, digital world where users can interact in immersive environments. The metaverse often leverages blockchain technology to manage digital assets, identities, and economies.

N

Non-Fungible Token (NFT)

A unique digital asset that is verified on a blockchain, certifying its originality and ownership. Unlike fungible tokens (e.g., cryptocurrencies), each NFT carries distinct characteristics and value.

Node

A computer or server that participates in a blockchain network by maintaining a copy of the ledger and validating transactions.