Plain-English definitions
22 termsCrypto glossary
The terms that actually matter, defined without jargon. If a word here links out, we have written more on it.
- Basis trade
- Buying an asset and shorting its future at the same time to capture the price gap. ETF flows from basis trades track funding rates, not conviction.
- Bitcoin dominance
- Bitcoin's share of the total value of all crypto assets, shown as a percentage. A measure of where capital and attention sit, not a buy or sell signal.
- CEX
- A centralised exchange, a company that holds customer funds and matches trades. Convenient, but a counterparty you must trust.
- Cold storage
- Keeping private keys on a device that is never connected to the internet, to reduce the risk of remote theft.
- DeFi
- Decentralised finance: financial services like lending and trading run by smart contracts instead of companies.
- DEX
- A decentralised exchange where trades settle on-chain through smart contracts, without a central operator holding funds.
- Funding rate
- A periodic payment between long and short traders in perpetual futures that keeps the contract price near the spot price.
- Gas fee
- The cost paid to have a transaction processed on a blockchain. Rises with network demand.
- Halving
- A scheduled event that cuts the rate of new Bitcoin issuance in half, roughly every four years, slowing new supply.
- Layer 1 (L1)
- A base blockchain that provides its own security and final settlement, such as Bitcoin or Ethereum.
- Layer 2 (L2)
- A faster, cheaper network built on top of a Layer 1 that batches transactions and settles them back down to the base chain.
- Liquidity
- How easily an asset can be bought or sold without moving its price. Thin liquidity means large orders cause big swings.
- Market capitalisation
- An asset's price multiplied by its circulating supply. A rough gauge of size, easily distorted by low-supply tokens.
- Not your keys, not your coins
- A reminder that if a third party holds your private keys, you are trusting them with your assets. Self-custody puts that risk on you instead.
- On-chain
- Activity recorded directly on a blockchain, such as transfers and contract calls. On-chain data is public and can be measured.
- Rollup
- The most common type of Layer 2. It rolls up many transactions into one batch and posts a compressed record to the main chain.
- Seed phrase
- A list of words that backs up a self-custody wallet. Anyone with it controls the funds, and losing it usually means losing access.
- Self-custody
- Holding your own private keys rather than trusting an exchange or fund. Removes counterparty risk and adds personal responsibility.
- Slippage
- The difference between the price you expected and the price you got, caused by the market moving as your order fills.
- Spot ETF
- An exchange-traded fund that holds the actual asset (such as Bitcoin) and trades on a regular stock exchange, giving regulated exposure without self-custody.
- Stablecoin
- A crypto token designed to hold a fixed value, almost always one US dollar. Used to move dollars on a blockchain without a bank.
- Total value locked (TVL)
- The total value of assets deposited in a protocol or chain. A popularity gauge, inflated by token price and double-counting.
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