CRYPTO CURRENCY DICTIONARY

TERMS COMMONLY USED IN THE WORLD OF BLOCKCHAIN AND CRYPTOCURRENCY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Automated Market Maker (AMM)

Decentralized exchanges which use liquidity pools and complex mathematical equations to ensure asset liquidity and reduce price slippage are known as automated market makers. AMMs do not follow the traditional "order book" approach, it requires buyers and sellers to be present and agree on an asset price in order to complete trades. For small, decentralized exchanges with a small number of users, this strategy is unreliable. AMMs, on the other hand, allow their users to "donate" their funds to liquidity pools. The pooled currencies of the users are subsequently made available to purchasers, resulting in significant levels of liquidity. Liquidity pools remove the need for exchanges to price assets using complex matching algorithms. Instead, they use a consistent product formula and smart contract technology to keep asset values stable.

Other Important Terms

gwei

Ethereum gas fees are calculated in terms of ‘Gwei’, a smaller unit for ETH. One Gwei can be equated with 0.000000001 ETH, making it perfectly small for calculating the gas fee.Total Gas Fee = Gas Unit Limits * (Base Fee + Tip)

Automated Liquidity Protocol

Automated liquidity protocol is a method used in international exchanges to improve the availability of goods. Small, spatially traded trades cannot successfully use the order book model for commercial purposes because doing so requires a large number of users in the trade to match buy and sell orders. If there are not enough suppliers available for the product, it will have a low liquidity. Multi-location exchange operates in an automated market maker system that uses mathematical formulas and smart contracts. These automated protocols using cash pools allow users of the exchange to lock their funds to create a continuous cryptocurrency discovery.

Ethereum

Ethereum is one of the most widely used blockchain systems in the world. Released for the first time in 2015, it is a decentralized ecosystem that uses open-source, distributed, blockchain technology. Thousands of computers using Ethereum clients maintain their virtual machine (EVM), allowing the platform to run continuously, uninterrupted, and immutably. Ethereum's native cryptocurrency is Ether (ETH), which trades closely with many other currencies and tokens on the platform. Building on the Bitcoin blockchain, Ethereum offers a platform that holds thousands of internationally distributed apps. Wise contracts are part of the platform and are written primarily in code language Solidity. Ethereum currently uses a proof-of-function algorithm as a blockchain compliant method but is eliminated by harvesting a less powerful Proof of Stake (PoS) model.

Cold Storage

Cold storage is the way to store cryptocurrency offline.  The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.

Sidechain

A sidechain is a blockchain that links to the main chain. The blockchains are linked via two-way pegs, which allow for bidirectional currency and token transactions. Any coins or tokens delivered to the sidechain are locked on the parent chain to which they are linked. The equivalent quantity of the asset is then unlocked on the sidechain. Sidechains are used by developers to build scaling solutions and add functionality to layer-1 blockchains. Sidechains exist between a layer-1 and a layer-2 solution. Despite the fact that they are an extra protocol to the main chain, such as layer-2 solutions, sidechains frequently have different security protocols. Furthermore, sidechains can implement different consensus techniques that may differ from those used by the main chain.

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