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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

Wash Trading

Wash trading is the artificial and unlawful action of manipulating the perceived liquidity of assets and market volume in a marketplace. It is an issue in most financial markets and can show itself in a variety of ways. Wash trading occurs when traders swap assets among themselves to produce fake market activity on controlled exchanges in the cryptocurrency space. Wash traders may also generate "pump and dumps," causing the value of an asset to surge and plummet dramatically. Market volume is an inaccurate metric of liquidity due to the absence of regulation of bitcoin exchanges. Exchanges frequently keep users' identities private, making it simpler to launder deals. It is expected that wash trading affects a considerable amount of Bitcoin deals.

Other Important Terms

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.

yearn.finance

Yearn.finance is a collection of Decentralized Finance (DeFi) products that brings values such as lending aggregation, and yield generation to the blockchain.

Directional Movement Index (DMI)

The bootstrapped venture, founded by Shetty and the builder of Shardeum, Omar Syed, plans to raise funds by April and launch in beta in the third quarter of the year. The blockchain itself will be opened for public adoption by the end of 2022.

Front Running

Front running is the illicit practice of making transactions based on insider information. Front runners utilize pending or future transaction data to anticipate changes in the value of an asset. Front running is a problem in all financial markets. Cryptocurrencies, on the other hand, are vulnerable to certain forms of front running. Miners that acquire access to pending transaction data in the mempool on blockchains can use the information to conduct a trade. To go ahead with the original transaction, the front runner can utilize insertion, displacement, or suppression. In addition, frontrunners can target initial coin offers and usernames. To avoid front running, networks might use strategies such as transaction ordering and improved secrecy.

Vaporware

Vaporware, sometimes written "vapourware," is undelivered hardware or software that is slated for distribution in the future. The phrase "vaporware" is derived from the words "vapor" and "software" or "hardware." Cryptocurrency initiatives that have yet to materialize are sometimes referred to as vaporware. Because the crypto market is unregulated, developers make claims about items that will cause currency values to grow or offer bogus tokens. Furthermore, some organizations postpone project termination statements, leaving interested parties in the dark. Crypto pundits frequently misuse the term vaporware in a pejorative way to disparage projects with reasonably long development schedules. One famous example is Ethereum, which was first seen as vaporware by some.

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