CRYPTO CURRENCY DICTIONARY

TERMS COMMONLY USED IN THE WORLD OF BLOCKCHAIN AND CRYPTOCURRENCY

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Decentralized Applications (dApps)

Decentralized apps are computer programs with backend code that operates on a distributed blockchain system. dApps provide a variety of functions, ranging from financial utilities to games. dApps are often open-source and interoperable, giving authors a great deal of freedom. dApps are deterministic because they use smart contracts to manage their logic and execute the same operations in different situations. Developers are drawn to dApps for a variety of reasons, including the security and anonymity provided by encryption, the ability to evade censorship, and the use of a market with no downtime. dApps, like traditional apps, use front-end code written in a standard programming language. Changeable interfaces are also available in dApps, which may be self-built or updated using a third-party interface.

Other Important Terms

Yield Farming

Yield farming is the practice of lending or staking cryptocurrencies in return for benefits like interest.  It is a technique to make interest on your cryptocurrencies, much like you would make interest on any money in your savings account. Likewise, yield farming is locking up your bitcoin for a period of time, or "staking," in return for interest or other benefits like additional cryptocurrency. Decentralized exchanges (DEXs) are typically used by yield farmers to lend, borrow, or stake coins in order to earn interest and speculate on price fluctuations.

White Paper

A white paper – or whitepaper – is a case study that is intended to inform and influence potential consumers, partners, and financiers. To explain the features of new projects, most professional cryptocurrency firms produce white papers with initial coin offers (ICOs). This lengthy article explains the notion of the token or coin, technical specifics, tokenomics, valuations, tactics, and more. White papers are regarded as an important component of an ICO. However, there is no guarantee that the information included in a white paper is precise or accurate. A litepaper is a condensed form of a white paper.

Cardano

Cardano is a blockchain platform that is open source and uses the Proof of Work consensus process. ADA is its native cryptocurrency. Cardano was founded in 2017 by Ethereum co-founder Charles Hoskinson. Cardano is developed in Haskell, a programming language that uses pure functions. Cardano is a third-generation platform that was created with an evidence-based approach. The Cardano blockchain is composed of two layers: the Cardano settlement layer, which monitors balances and transactions, and the Cardano computational layer, which is used for smart contracts and applications. Furthermore, a key component of Cardano's protocol is its Proof of Stake consensus mechanism, Ouroboros, which is built for long-term sustainability and scalability. Cardano is expected to deploy other updates, such as the layer-2 solution Hydra, in the near future at the time of writing.

Ampleforth (AMPL)

While asset-backed and crypto-collateralized stablecoins are important components of the digital economy, algorithmically driven assets such as Ampleforth are developing with a more decentralised approach that is less influenced by conventional financial procedures. With a variable supply, Ampleforth's AMPL currency promotes price stability. This is accomplished by a rebasing mechanism, which changes the supply of AMPL on a daily basis, offering better price stability than fixed-supply cryptocurrencies.

Liquidity Pool

A liquidity pool is a cryptocurrency supply that a decentralized exchange uses to keep its liquidity and asset prices stable. Traditionally, exchanges complete each crypto transaction using peer-to-peer transfers. Price slippage can occur as a result of this sequential "order book" approach. Furthermore, due to a lack of peers, a tiny, decentralized exchange with few users will have poor liquidity. This makes trading untrustworthy. Decentralized exchanges address these concerns by establishing liquidity pools. Currency stores enable exchange users to lock their monies in order to build a consistent supply of assets. Traders can then conduct transactions with the pool at any moment, increasing liquidity. Smart contracts are used to automate liquidity pools. Liquidity providers are users who offer their currency to the liquidity pool. They are rewarded with transactions fees on the blockchain.

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