Crypto & AI Glossary

An API (Application Programming Interface) is a defined set of rules that lets one software system request data or actions from another in a standard way.

APR (annual percentage rate) is the annualised simple interest rate you earn or pay in crypto, shown as a percentage and typically excluding compounding.

APY (annual percentage yield) is the yearly return you earn on crypto deposits or DeFi positions after accounting for compounding.

Accumulation is the strategy of building a crypto position by buying an asset gradually over time to reduce the impact of short-term volatility.

A crypto address is a public, shareable string that identifies where blockchain assets should be sent and lets anyone view that address’s on-chain activity.

An affiliate is a person or business that promotes a company’s product or service and earns a commission when their referral leads to a tracked action like a sale or signup.

An AI trading agent is software that uses machine learning to decide when to buy, sell, or hold assets and can execute trades automatically under defined…

An airdrop is a crypto token distribution where a project sends tokens to eligible wallets—often to reward users, grow adoption, or decentralize ownership.

Algo-trading is the automated buying and selling of assets using pre-programmed rules that analyze market data and place orders without manual input.

Allocation is how a crypto project divides its token supply among groups like the community, team, investors, and treasury, often with vesting rules.

An amended return is a tax filing submitted after an original return to correct errors or update income, deductions, credits, or other tax details.

API key trading is placing and managing crypto exchange orders through an API key that authorizes a third-party app or script to act on your account.

Arbitrage is a trading strategy that profits from temporary price differences for the same asset across markets by buying low in one place and selling high in…

An asset is anything of value you can own or control, including crypto coins, tokens, NFTs, stablecoins, and tokenised real-world items.

An audit is an independent review that checks a crypto project’s code, security, and controls to find risks, verify claims, and improve trust.

AUM copy trading is copy trading that tracks and often ranks strategies by assets under management, showing how much follower capital is allocated to a lead…

An automated market maker (AMM) is a DEX mechanism that uses smart contracts and liquidity pools to price and execute token swaps without an order book.

Backtest trading is the process of applying a trading strategy to historical market data to estimate how it would have performed before risking real capital.

A bail-out is government or central bank financial support for a failing institution to prevent wider economic damage and systemic risk.

A bank run is a rapid, widespread withdrawal of deposits driven by fear a bank cannot repay everyone, potentially causing the bank to fail.

Bid and ask are the highest price buyers offer and the lowest price sellers accept, and the gap between them is the bid-ask spread.

A binary contract is a prediction market contract that pays a fixed amount if a specific outcome happens and pays nothing if it doesn’t.

Bitcoin dominance is the percentage of the total crypto market capitalization represented by Bitcoin’s market cap.

Bitcoin halving is a scheduled Bitcoin protocol event that cuts the block reward in half, slowing new BTC issuance about every four years.

A blockchain explorer is a search and analytics tool that lets anyone view blocks, transactions, addresses, and smart contract activity on a blockchain.

A bonding curve is a smart-contract pricing formula that sets a token’s buy and sell price based on its current supply, enabling continuous issuance and redemption.

Breakout trading is a strategy that enters when price moves decisively above resistance or below support, aiming to ride a new directional trend.

Builder codes on Polymarket are public bytes32 identifiers that tag orders sent via an app so trades can be attributed to a specific builder profile.

A bull market is a sustained period of rising asset prices, typically driven by strong demand, improving sentiment, and increasing participation.

A bull run is a sustained period of rising crypto prices, typically driven by strong demand, high trading activity, and broadly optimistic market sentiment.

Bullish means expecting a crypto asset or the broader market to rise in price, often reflected in optimistic sentiment and increased buying pressure.

A buy wall is a large cluster of buy orders at a specific price that can act as support by absorbing selling pressure in a crypto market.

A candlestick is a chart bar that shows an asset’s open, high, low, and close prices for a set time period, helping traders read momentum and sentiment.

Capitulation is a market phase where investors panic-sell en masse after a sustained decline, often marking the peak of fear and heavy volume.

CFTC event contracts are regulated derivatives that pay out based on whether a defined real-world event happens, overseen under the Commodity Exchange Act.

A CLOB in prediction markets is an order book where traders post limit buy and sell orders for outcome shares and trades execute when prices match.

Collateral is an asset pledged to secure a loan, giving the lender a way to recover funds if the borrower fails to repay.

Composability is the ability for DeFi apps to plug into each other like building blocks, so users can combine protocols to create new financial products.

The Conditional Token Framework is a Gnosis smart contract system that turns event outcomes into ERC-1155 tokens redeemable for collateral after an oracle…

Confluence is when multiple independent trading signals align to support the same market idea, increasing confidence in a potential entry, exit, or price level.

Copy trading is an automated strategy where your account replicates another trader’s buy and sell orders in real time based on rules you set.

A cross-chain bridge in crypto is a protocol that moves tokens or messages between blockchains by locking, burning, or swapping assets across networks.

A cryptocurrency is a digital currency secured by cryptography and run on decentralized networks, enabling peer-to-peer payments without a central bank.

Custodial means a third party holds and controls your crypto assets or private keys on your behalf, typically through an exchange, broker, or wallet provider.

A DAO (decentralized autonomous organization) is a blockchain-based group that uses smart contracts and member voting to manage funds and make decisions without…

DEX aggregators are DeFi tools that route a swap across multiple decentralized exchanges to find the best price and lowest slippage in one transaction.

A DVN (Decentralized Verifier Network) is an independent verifier that attests a cross-chain message is valid before it is executed on the destination chain.

Day trading is a strategy of buying and selling an asset within the same day to profit from short-term price movements.

A DCA bot is an automated crypto tool that buys or sells an asset in scheduled or rule-based increments to average the entry price over time.

DeFi contagion is the cascading spread of losses or failures from one DeFi protocol to others through shared assets, smart contracts, and liquidity links.

Decentralization is the distribution of control across many independent participants so no single party can unilaterally change, block, or own the system.

A decentralized application (DApp) is software that runs on a blockchain or peer-to-peer network, using smart contracts so no single party controls it.

A decentralized exchange (DEX) is a crypto trading platform that lets users swap tokens directly from their wallets using smart contracts, without a central intermediary.

A depeg is when a token designed to track a reference price (like $1) trades meaningfully above or below that target.

Derivatives are financial contracts whose value is based on an underlying asset—like Bitcoin or Ethereum—used to hedge risk or speculate without owning the asset.

A designated contract market (DCM) is a CFTC-regulated exchange where standardized futures and options (and some swaps) can be traded, including by retail…

A digital asset is any item of value or content that exists digitally and can be owned, transferred, and verified—often using cryptography and blockchains.

Digital currency is money that exists electronically and can be stored, transferred, and recorded on digital networks rather than as physical cash.

A distributed ledger is a shared database replicated across many computers, where updates are agreed by consensus rather than a central administrator.

A doji candlestick is a chart pattern where the open and close are nearly equal, signalling market indecision and a possible trend reversal.

Drawdown is the percentage drop from an account’s peak value to a subsequent low before a new peak is reached.

DYdX is a decentralised perpetual futures exchange and protocol that enables non-custodial trading using an order book and on-chain settlement.

ERC-20 is the standard set of rules that makes Ethereum-based tokens work consistently across wallets, exchanges, and smart contracts.

Edge nodes are distributed computers that process and relay data close to users, reducing latency and improving performance for decentralized networks and apps.

The Ethereum Virtual Machine (EVM) is the runtime environment that executes smart contract code and updates Ethereum’s blockchain state deterministically.

An event contract is a yes/no derivative that settles at a fixed value based on whether a clearly defined real-world event occurs by a specified time.

An exit scam is a crypto fraud where a project’s operators abruptly disappear or shut down after collecting user funds, leaving investors unable to recover assets.

A falling knife is a rapid, steep price drop in an asset that can punish buyers who enter too early before the decline stabilizes.

Fear of Missing Out (FOMO) is the anxiety that you’ll miss a profitable move, pushing you to buy or sell impulsively based on hype rather than a plan.

Fiat currency is government-issued money that isn’t backed by a commodity like gold and holds value because it is legal tender and widely trusted.

Funding payments are periodic transfers between traders in perpetual futures that keep the contract price close to the spot market price.

Futures are standardized contracts to buy or sell an asset at a set price on a future date, widely used to hedge risk or speculate on price moves.

Gas is a unit that measures the computational work needed to process blockchain transactions and smart contracts, determining fees and transaction priority.

A genesis block is the first block in a blockchain, hard-coded as the chain’s starting point and used to anchor all later blocks.

GM pools on GMX are market-specific liquidity pools that back swaps and perpetual trades, letting LPs earn fees while taking trader PnL risk for that market.

GMX is a decentralized exchange for spot swaps and perpetual futures that uses oracle-based pricing and on-chain liquidity pools instead of an order book.

GMX GLP is the legacy liquidity provider token on GMX V1 that represented a basket of assets in the protocol’s liquidity vault and earned a share of trading…

A governance token is a crypto asset that gives holders voting power to propose and decide changes to a DAO or blockchain protocol.

A governance proposal is a formal request for a DAO or protocol community to vote on a specific change, action, or funding decision.

A gray swan event is a high-impact market shock that is plausible and discussed in advance, but widely treated as unlikely until it happens.

A grid bot is an automated trading bot that places staggered buy and sell orders across a preset price range to profit from repeated price swings.

Gwei is a small unit of Ether used on Ethereum to quote gas prices and calculate transaction fees for sending ETH or running smart contracts.

HODL is a crypto slang term meaning to hold a cryptocurrency long term and avoid selling during short-term volatility.

A hedge fund is a privately managed investment pool that uses flexible strategies—often including short selling, derivatives, and leverage—to target returns for accredited investors.

A hot wallet is a crypto wallet connected to the internet that makes sending, receiving, and trading digital assets fast but less secure than offline storage.

Hyperliquid is a high-performance Layer-1 blockchain and on-chain perpetuals exchange built for fast, transparent order-book trading and self-custody.

Hyperliquid HLP is a protocol-managed liquidity vault on Hyperliquid that market-makes, backstops liquidations, and shares its trading PnL with depositors.

Impermanent loss is the value gap between holding tokens and providing them to an AMM liquidity pool after their prices move relative to each other.

Implied probability in prediction markets is the likelihood of an outcome inferred from the current contract price, usually read as price in dollars or cents.

Index price is a reference price built from external market data that derivatives exchanges use to estimate an asset’s fair spot value.

Initial margin is the upfront collateral you must post to open a leveraged position, acting as a buffer against potential losses.

JLP (Jupiter) is a liquidity provider token that represents a share of Jupiter’s multi-asset pool that backs Jupiter Perps trades on Solana.

A lead trader is a trader whose positions are published on a platform so other users can automatically replicate them, usually in exchange for a share of…

A limit order is an instruction to buy or sell an asset only at a specified price or better, prioritising price control over guaranteed execution.

Liquidation is the automatic closing of a DeFi loan or leveraged position when its collateral value falls below the protocol’s required threshold.

A liquidation cascade is a chain reaction where forced position closures push prices further, triggering more liquidations and accelerating a market move.

Liquidation price is the market price at which a leveraged crypto position is automatically closed because collateral falls below the maintenance margin.

A liquidity pool is a smart contract that holds token reserves so users can trade or borrow against them on DeFi apps without an order book.

An LMSR market maker is an automated pricing algorithm for prediction markets that always offers quotes and adjusts prices using a logarithmic cost function.

The MACD indicator is a momentum tool that compares two exponential moving averages to show trend direction, strength, and potential reversals.

Maintenance margin is the minimum collateral you must keep in a leveraged position to avoid a margin call or liquidation.

Mark price is an exchange’s fair-value estimate used to calculate unrealized PnL and trigger liquidations, reducing the impact of short-term price spikes.

A market order is an instruction to buy or sell an asset immediately at the best available price in the order book.

Max drawdown is the largest peak-to-trough percentage loss of an asset or strategy over a chosen period before a new high is reached.

Mirror trading is an automated strategy where your account replicates another trader’s or model’s trades in near real time based on predefined rules.

A moving average is a chart indicator that smooths price data by averaging it over a set number of periods to help identify the underlying trend.

Non-custodial trading is crypto trading where you keep control of your private keys and funds while orders are executed via smart contracts or secure protocols.

A non-fungible token (NFT) is a unique blockchain token that proves ownership or authenticity of a specific digital or real-world item.

Open interest is the total number of outstanding derivative contracts that remain open, showing how many positions are active in a market.

In crypto, an oracle is a service that delivers off-chain data (like asset prices) to smart contracts so they can execute based on real-world information.

Overcollateralization is when a borrower locks up collateral worth more than the amount they borrow to protect lenders from price swings and defaults.

Paper trading is practicing trades with simulated money and real market data to test strategies and learn execution without financial risk.

A perp DEX is a decentralized exchange that lets users trade perpetual futures with onchain collateral, automated funding payments, and transparent rules.

Polymarket is a crypto prediction market where users trade outcome shares on real-world events, with payouts determined by an oracle-based resolution process.

Prediction market liquidity is how easily traders can buy or sell outcome shares near the current price without causing large price moves.

The Polymarket proposal bond is collateral a proposer posts to submit a market outcome to the UMA Optimistic Oracle, refunded if correct and forfeited if wrong.

Protocol-owned liquidity (POL) is liquidity in a DEX market that is owned and controlled by the protocol itself rather than rented from external liquidity…

A proxy wallet on Polymarket is a smart contract wallet that acts on your behalf so you can trade and manage positions with simpler, often gas-sponsored…

QCEX is a CFTC-regulated U.S. derivatives exchange and clearing setup that Polymarket bought to operate compliant prediction markets for U.S. users.

Real-world asset (RWA) tokenization is the process of issuing blockchain tokens that represent legal rights to off-chain assets like bonds, real estate, or commodities.

Restaking is the reuse of staked ETH (or liquid staking tokens) to secure additional Ethereum-based services via EigenLayer, in exchange for extra rewards and risks.

RsETH is a liquid restaking token that represents restaked ETH (or ETH staking derivatives) and can be used in DeFi while earning staking and restaking rewards.

A scalar market is a prediction market where the payout depends on a numeric outcome within a defined range, not a simple yes-or-no result.

A signal bot is software that turns trading alerts into automatic buy and sell orders on a connected crypto exchange using predefined execution rules.

Slashing is an automatic penalty in proof-of-stake networks that cuts a validator’s staked collateral for rule-breaking or serious unreliability.

Slippage is the difference between the price you expect for a trade and the price you actually get when the order executes.

A smart contract is a program on a blockchain that automatically carries out an agreement when its preset conditions are met.

A stop-loss order is an instruction to sell or buy an asset once it hits a set stop price, helping limit losses by triggering an automatic trade.

Taker and maker fees are exchange trading charges based on whether your order removes liquidity from the order book (taker) or adds it (maker).

Tokenomics is the study of a crypto token’s supply, distribution, utility, and incentives to judge whether its value can grow sustainably over time.

Total value locked (TVL) is the total USD value of crypto assets deposited in a DeFi protocol’s smart contracts at a given time.

A trading bot is software that automatically places buy and sell orders based on predefined rules, signals, and risk settings.

A TWAP order is an algorithmic order that splits a large trade into smaller slices executed over a set time window to target the time-weighted average price.

The UMA Optimistic Oracle is an onchain system that verifies real-world facts by accepting a proposed answer unless someone disputes it within a set window.

A validator node is a blockchain server that stakes crypto and helps secure the network by verifying transactions and proposing or voting on new blocks.

Vesting is a schedule that releases ownership or access to tokens over time or after milestones, rather than all at once.

Yield is the income or rewards you earn from holding or deploying an asset, usually expressed as a percentage over a set period.

A zero-knowledge proof (ZKP) is a cryptographic method that proves a statement is true without revealing the underlying secret data.