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The Uniblock Crypto/Blockchain Glossary
Web3 jargon got you confused? Get up to speed with our glossary of essential crypto terms. Then build your next big project with Uniblock's powerful and intuitive Web3 solutions.
A
ABI (Application Binary Interface)
ABI is an interface between two binary program modules at the level of machine code. In the context of web3, ABIs are crucial for interacting with smart contracts, defining how to encode and decode data when calling contract functions. Developers and smart contract auditors frequently use this term. To excel in working with ABIs, one should understand Ethereum's contract ABI specification, be proficient in encoding and decoding ABI data, and be familiar with tools that generate and parse ABIs.
Arbitrage
Arbitrage in web3 is the practice of exploiting price differences of the same asset across different markets or platforms to make a profit. It's a key factor in Maximal Extractable Value (MEV). Traders, DeFi users, and MEV searchers commonly use this term. To excel in arbitrage, one should understand DeFi protocols, be proficient in writing high-speed trading bots, and have a deep knowledge of blockchain mempool mechanics and gas optimization techniques.
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. Blockchain developers and researchers frequently use this term. To excel in working with archival nodes, one should understand blockchain data structures, be proficient in querying historical blockchain data, and be familiar with the trade-offs between different node types in terms of storage requirements and query capabilities.
B
Base Fee
The base fee is an algorithmically determined fee that users on the Ethereum blockchain must pay to complete a transaction. It was introduced as part of EIP-1559. Developers, users, and miners in the Ethereum ecosystem use this term. To excel in working with base fees, one should understand Ethereum's fee market mechanism, be able to predict base fee changes, and know how to optimize transaction timing to minimize costs.
Blockchain
A blockchain is a distributed, immutable ledger that records transactions across a network of computers. It's the foundational technology behind cryptocurrencies and many web3 applications. Developers, engineers, and entrepreneurs in the web3 space use this term extensively. To excel in blockchain development, one should understand its core concepts like decentralization, consensus mechanisms, and cryptography, as well as gain proficiency in blockchain-specific programming languages and frameworks.
Bulletproofs
Bulletproofs are short, non-interactive zero-knowledge proofs that require no trusted setup. They are used to convince a verifier that an encrypted plaintext is well-formed. Cryptographers and privacy-focused blockchain developers commonly use this term. To excel in working with Bulletproofs, one should have a strong background in cryptography, understand zero-knowledge proof systems, and be familiar with implementing and optimizing Bulletproof protocols.
C
Censorship (in MEV context)
In the context of MEV, censorship is the process of manipulating blocks to exclude specific transactions for a number of blocks, often to maintain an arbitrage opportunity or make a specific purchase before another user. MEV searchers and blockchain security researchers frequently use this term. To excel in understanding and mitigating censorship, one should have a deep knowledge of blockchain consensus mechanisms, understand miner incentives, and be familiar with techniques for detecting and preventing transaction censorship.
Consensus Mechanisms
Consensus mechanisms are protocols that ensure all nodes in a blockchain network agree on the validity of transactions. Common types include Proof of Work (PoW) and Proof of Stake (PoS). This term is used by blockchain developers, researchers, and protocol designers. To excel in this area, one should deeply understand different consensus algorithms, their trade-offs in terms of security and scalability, and be able to implement or interact with consensus protocols in blockchain development.
Cross-Chain Arbitrage
Cross-chain arbitrage involves exploiting price differences of the same or related assets across different blockchain networks. It's a growing field within MEV as more chains and layer 2 solutions emerge. Traders, DeFi users, and cross-chain protocol developers commonly use this term. To excel in cross-chain arbitrage, one should understand multiple blockchain ecosystems, be proficient in cross-chain communication protocols, and have expertise in high-speed, cross-chain trading strategies.
D
Decentralized Applications (DApps)
DApps are applications that run on a decentralized network, typically a blockchain, rather than being hosted on centralized servers. They often interact with smart contracts and provide a user interface for blockchain functionality. Web3 developers, designers, and product managers commonly use this term. To excel in DApp development, one should be proficient in both front-end technologies (like React.js) and blockchain interaction libraries (like web3.js or ethers.js), as well as understand the unique UX challenges of decentralized systems.
Decentralized Finance (DeFi)
DeFi refers to the ecosystem of financial applications built on blockchain networks, aiming to recreate and innovate upon traditional financial systems in a decentralized manner. This term is used by developers, financial experts, and entrepreneurs in the web3 space. To excel in DeFi development, one should understand traditional finance concepts, be proficient in smart contract development, and stay updated on the latest DeFi protocols and best practices for security and risk management.
E
Ethers.js/Web3.js
These are JavaScript libraries that allow developers to interact with Ethereum nodes and smart contracts. They're essential tools for building the front-end of DApps and connecting them to the blockchain. Web3 developers frequently use these terms. To excel in using these libraries, one should have a strong foundation in JavaScript and asynchronous programming, understand Ethereum's architecture, and be familiar with common patterns for interacting with smart contracts.
G
Gas Fees
Gas fees are the transaction costs on the Ethereum network, paid in Ether (ETH) for executing operations like deploying contracts or making transactions. This term is used by developers, users, and product managers in the Ethereum ecosystem. To excel in managing gas fees, one should understand Ethereum's fee structure, implement gas optimization techniques in smart contracts, and be familiar with layer 2 solutions that can reduce gas costs.
I
Interoperability
Interoperability in web3 refers to the ability of different blockchain networks to communicate and share data with each other. This term is used by blockchain architects, protocol developers, and those working on cross-chain applications. To excel in this area, one should understand cross-chain communication protocols, be familiar with bridge technologies, and be able to design and implement systems that can operate across multiple blockchain networks.
IPFS (InterPlanetary File System)
IPFS is a peer-to-peer network and protocol designed to create a decentralized system for storing and sharing files, websites, applications, and data. It's often used in conjunction with blockchain technology to store and distribute content in a decentralized manner. This term is used by developers working on decentralized storage solutions and content distribution. To excel in using IPFS, one should understand content-addressed storage, be familiar with IPFS APIs and tools, and know how to integrate IPFS with other web3 technologies for decentralized data storage and retrieval.
J
JIT (Just-In-Time) Arbitrage
JIT arbitrage occurs when a searcher sees a large swap in the mempool and then sandwiches the trade with liquidity in the underlying pool. MEV searchers and DeFi protocol developers frequently use this term. To excel in JIT arbitrage, one should have a deep understanding of DeFi protocols (especially AMMs), be proficient in mempool monitoring and high-speed transaction submission, and understand the intricacies of liquidity provision and removal in DeFi pools.
L
Layer 2 Solutions
Layer 2 solutions are blockchain protocols built on top of existing blockchains (like Ethereum) to improve scalability and reduce transaction costs. Examples include rollups and state channels. This term is used by blockchain developers and those working on scaling solutions. To excel in Layer 2 development, one should understand the underlying blockchain's architecture, be familiar with different Layer 2 technologies and their trade-offs, and be able to design and implement efficient off-chain systems that maintain security guarantees.
Liquidations (in DeFi context)
In DeFi, liquidations occur when the collateral used for a loan no longer covers the value of the debt, triggering automatic repayment mechanisms. DeFi users, protocol developers, and MEV searchers commonly use this term. To excel in working with liquidations, one should understand DeFi lending protocols, be proficient in monitoring and predicting liquidation events, and know how to implement efficient liquidation bots.
O
Oracles
Oracles are services that provide external data to blockchain networks and smart contracts, bridging the gap between on-chain and off-chain information. This term is used by blockchain developers and those working on projects that require real-world data. To excel in working with oracles, one should understand the oracle problem (the challenge of getting reliable data onto a blockchain), be familiar with oracle services like Chainlink, and know how to implement oracle data feeds securely in smart contracts.
P
Pool Imbalance Sandwiching
This is a type of MEV where the searcher swaps the relative sizes of decentralized exchange liquidity pools during the front-run and resets them in the back-run. MEV searchers and DeFi protocol developers use this term. To excel in this area, one should have a deep understanding of AMM mechanics, be proficient in complex multi-step transactions, and understand the nuances of liquidity pool dynamics.
R
Rebase Arbitrage
This is a class of MEV focused on taking advantage of oracle updates and rebases. MEV searchers and developers of rebasing tokens or oracle-dependent protocols use this term. To excel in rebase arbitrage, one should understand oracle mechanisms, be familiar with rebasing token designs, and be proficient in high-speed trading around predictable blockchain events.
S
Smart Contracts
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They run on blockchain networks, primarily Ethereum, and automatically execute when predetermined conditions are met. Developers and product managers in the web3 space frequently use this term. To excel in smart contract development, one should master Solidity (Ethereum's primary smart contract language), understand security best practices, and be familiar with testing and auditing tools.
Solidity
Solidity is the primary programming language for writing smart contracts on the Ethereum blockchain. It's a statically-typed language designed to target the Ethereum Virtual Machine (EVM). Blockchain developers and smart contract auditors commonly use this term. To excel in Solidity, one should understand its unique features and limitations, be familiar with common design patterns and security best practices, and have experience with development environments like Truffle or Hardhat.
T
Tokens (Fungible and Non-Fungible)
Tokens are digital assets created and managed on a blockchain. Fungible tokens are interchangeable (like cryptocurrencies), while non-fungible tokens (NFTs) represent unique digital assets. This term is used by developers, artists, and entrepreneurs in the web3 space. To excel in token development and implementation, one should understand token standards (like ERC-20 for fungible tokens and ERC-721 for NFTs), tokenomics, and be familiar with tools for token creation and management.
Tokenomics
Tokenomics refers to the economic model of a token within its ecosystem, including factors like supply, distribution, and utility. This term is used by token designers, economists, and project leads in the crypto space. To excel in tokenomics, one should understand economic principles, game theory, and incentive design, as well as be familiar with different token models and their impacts on project sustainability and user behavior.
W
Wallets
In the context of web3, wallets are software applications or hardware devices that store private keys and allow users to interact with blockchain networks, manage digital assets, and sign transactions. This term is used by developers, users, and product managers in the crypto space. To excel in wallet integration and development, one should understand cryptographic key management, be familiar with wallet connection standards like WalletConnect, and prioritize security in user key storage and transaction signing.
Wrapped Token
A wrapped token is a tokenized version of another cryptocurrency that allows it to be used on a blockchain different from its native chain. DeFi users, cross-chain developers, and token designers commonly use this term. To excel in working with wrapped tokens, one should understand cross-chain bridges, be familiar with different token standards across blockchains, and know how to implement and use wrapped token contracts securely.
Z
Zero-Knowledge Proof
A zero-knowledge proof is a method of verification where a prover can prove to a verifier that they know a value, without conveying any information apart from the fact that they know the value. Cryptographers, privacy-focused blockchain developers, and researchers frequently use this term. To excel in working with zero-knowledge proofs, one should have a strong background in cryptography, understand different types of zero-knowledge proof systems (like zk-SNARKs and zk-STARKs), and be proficient in implementing and optimizing zero-knowledge protocols.
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. Privacy-focused blockchain developers and researchers commonly use this term. To excel in working with zk-SNARKs, one should have a deep understanding of cryptography, be familiar with zero-knowledge proof systems, and have experience implementing and optimizing zk-SNARK protocols in blockchain environments.
