Understanding Cryptocurrency Jargon: A Beginner's Dictionary

Cryto Dictionary

I noticed that each sector of the cryptocurrency market has developed its own language. Abbreviations and jargon words are abundant. Even individuals actively trading on the stock exchange find themselves asking for explanations when entering a different field. Moreover, someone new to the crypto space has little chance of understanding. In light of this, I wanted to create a beginner's dictionary related to commonly encountered concepts on the internet regarding decentralized finance (DeFi).

If you're ready, let's begin. First, let's read the paragraph below:

Decoding the Crypto Language

"X coin will airdrop on the 15th of the month, with distribution taking place lottery-style. You can participate through this link, which includes a referral. On the 18th, there will be an Initial Dex Offering (IDO) from a launchpad, similar to the last project that achieved over 20x return on investment (ROI) at its all-time high (ATH). This project is strongly anticipated to be listed on centralized exchanges (CEX) in the long run. To participate in the presale, platform A requires staking 1,000 units of Y coin, and I expect an increase in the price of Y coin accordingly. It's important to note that the presale is not on a first-come, first-served basis; everyone on the whitelist can participate, and Know Your Customer (KYC) verification is mandatory. Each person can only purchase up to $100, and distribution will follow tokenomics, with 25% at Token Generation Event (TGE) and the remaining distributed monthly over three months in a vesting manner. The whitepaper link is provided below, and the likelihood of a scam is minimal; however, always do your own research (DYOR).

If this paragraph seems like Chinese to you, which is entirely normal, do not worry. I will explain the meaning of each term one by one. If you understand what it says without any difficulty, you can skip reading the dictionary part below, similar to skipping the extensive footnotes in Russian literature."

ATH - All-Time High

This refers to the highest point a cryptocurrency has reached throughout its entire existence. It is used in the context of breaking the previous ATH and setting a new one, similar to the concept of "breaking records" in news.

CEX - Centralized Exchange

These are centralized platforms such as Binance, Gate, and BTCTurk where users can trade cryptocurrencies.

DApp - Decentralized Applications

These are intermediary applications that enable direct transactions on the blockchain, examples include MetaMask, Poocoin, PancakeSwap, and OpenSea.

DeFi - Decentralized Finance

Refers to the concept of decentralized financial systems.

DEX - Decentralized Exchange

Platforms like PancakeSwap, Uniswap, and TraderJoe where users can trade cryptocurrencies without the need for a central authority.

DYOR - Do Your Own Research

Encourages individuals to conduct their own research before making any investment decisions.

FCFS - First Come, First Serve

Typically used during ICOs, it is a distribution method where developers sell a specified number of tokens at a fixed price, and it operates on a first-come, first-served basis.

FOMO - Fear of Missing Out

The fear that one might miss out on potential gains in the market.

FUD - Fear, Uncertainty, and Doubt

Spreading negative information about a project or the market in general, often with the intention of manipulating opinions.

HODL - Hold

A term indicating a long-term investment strategy, expressing the commitment to hold onto assets despite market fluctuations.

ICO - Initial Coin Offering

The process of raising funds for a new cryptocurrency project, usually done by selling tokens at the project's inception. In the past, all coins were launched this way, but now the term encompasses both CEX and DEX-supported projects.

IDO - Initial DEX Offering

Similar to ICO, but conducted on decentralized exchange platforms such as Oxbull and Redkite.

IEO - Initial Exchange Offering

Similar to ICO, but conducted on centralized exchanges like Binance Launchpad and Gate.io Startup.

KYC - Know Your Customer

The process of verifying the identity of users, often requiring documents such as ID/passport photos and selfies.

Launchpad

Refers to platforms where ICOs are conducted for DeFi projects.

Lottery

A system where winners are chosen through a random draw among participants, which can be applicable in airdrops or during presales.

Moon

Used to express an expectation that the price will rise significantly, often accompanied by phrases like "to the moon!"

NFA - Not Financial Advice

An acronym emphasizing that the provided information is not intended as financial advice.

Pump/Dump

A manipulation tactic where the price of a coin is artificially inflated (pump) and then sold off (dump) to capitalize on the price increase.

Presale

The sale of tokens at a fixed price before being listed on decentralized or centralized exchanges.

Ref - Referral

Commonly used in the context of reference codes, where users receive commission discounts or additional benefits for both referring and being referred to blockchain instruments.

ROI - Return of Investment

Indicates the profitability of an investment, expressed as a multiple (e.g., 15x means the selling price is 15 times the initial investment).

Shill

The act of promoting a project in an effort to persuade others to invest and increase its price.

TGE - Token Generation Event

The moment when tokens are first introduced to the market.

Tokenomics

Describes how project developers plan to manage the economics of the tokens, including distribution, total supply, and burning.

Scam

Fraudulent projects designed to deceive and defraud investors, such as infamous examples like the Squid Game Token.

Stake

The process of locking up tokens for a specified period in exchange for interest or other benefits.

Vesting

A mechanism where a portion of tokens is locked and gradually released over specific time intervals, preventing investors from quickly selling large amounts.

Hot/Cold Wallet

Refers to the storage of investments (coins, NFTs, etc.) in decentralized finance, with a hot wallet being online and connected to the internet (e.g., MetaMask), and a cold wallet being offline (e.g., Ledger, Trezor).

Whale

An individual holding a significant portion of a coin's total supply, allowing them to manipulate prices by selling large amounts.

Whitelist

A list typically announced during presales, comprising individuals who have the right to participate in the sale.

Whitepaper

A comprehensive document provided by project teams detailing their goals, strategies, timelines, initial targets, and promises to investors. Investing without reading and critically evaluating a project's whitepaper is often equivalent to throwing money away.

Simplified Explanation

Now, for reinforcement purposes, let's rephrase the paragraph that seemed like Chinese to us earlier in a more understandable manner:

A new project named X is emerging, planning to conduct a free distribution on the 15th of the month. I am sharing the link through which you can participate using my referral code. Winners will be selected through a lottery among participants, and the distribution will take place on the scheduled day.

Additionally, on the 18th of the month, there will be a presale by Company A, similar to the last project that achieved a price increase of up to 20 times. The project is expected to be listed on centralized exchanges soon. To participate in the presale, we need to purchase 1,000 units of Y coin from platform A and provide them to the platform for reservation on our behalf. Therefore, the price of Y coin may increase, but this is not financial advice as it could also decrease. Everyone who qualifies for the presale can make a purchase without the risk of running out. Identity verification is required on the platform. Those who qualify can purchase a maximum of $100, with $25 immediately sent to their wallets, while the remaining $75 investment will be locked for three months, with a monthly release of $25. Details about the project are provided below, and while the likelihood of fraud is low, it is still advisable to conduct your own research.