# Glossary

<table><thead><tr><th width="374" align="center">Term</th><th>Description</th></tr></thead><tbody><tr><td align="center"><strong>Account</strong></td><td><mark style="color:$info;">Account means your blockchain account, whether or not generated through a crypto wallet</mark>.</td></tr><tr><td align="center"><strong>Address / Public key</strong></td><td><mark style="color:$info;">An address is a string of alphanumeric characters that is attached to your account/wallet and you use to receive cryptocurrencies.</mark></td></tr><tr><td align="center"><strong>Airdrop</strong></td><td><mark style="color:$info;">The distribution of free cryptocurrencies to the public or specific users to promote a new project or encourage community adoption.</mark></td></tr><tr><td align="center"><strong>APY (Annual Percentage Yield)</strong></td><td><mark style="color:$info;">The normalized amount a user stands to earn in a year, including compounding interest.</mark></td></tr><tr><td align="center"><strong>Arbitrage</strong></td><td><mark style="color:$info;">To take advantage of the price difference of an asset between two markets for profit. For example, if 1 XRP is selling for $0.80 on an exchange and $0.82 on another exchange then you can buy from the first and sell on the second to profit.</mark></td></tr><tr><td align="center"><strong>Automated Market Maker (AMM):</strong></td><td><mark style="color:$info;">A decentralized exchange (DEX) protocol that facilitates the trading/swapping of assets without a counterparty via an algorithmic formula.</mark></td></tr><tr><td align="center"><strong>Bid-Ask Spread</strong></td><td><mark style="color:$info;">The difference between the bid (buy) and ask (sell) price of a particular asset on an exchange.</mark></td></tr><tr><td align="center"><strong>Block</strong></td><td><mark style="color:$info;">The data record of all transaction information made during a specific time frame on a blockchain network. Blocks are added sequentially to a network’s chain of data, which in turn make up the public ledger known as blockchain.</mark></td></tr><tr><td align="center"><strong>Block Explorer</strong></td><td><mark style="color:$info;">A website that enables users to access real-time blockchain information like transactions, blocks, addresses, balances and transactions history on a particular blockchain network.</mark></td></tr><tr><td align="center"><strong>Cold Storage</strong></td><td><mark style="color:$info;">The offline storage of a cryptocurrency wallet. “Offline” means that the wallet is disconnected from the internet, preventing hackers from accessing it. Cold storage is considered to be the most secure way to hold crypto assets.</mark></td></tr><tr><td align="center"><strong>Consensus Mechanism/ Algorithm</strong></td><td><mark style="color:$info;">An algorithm that participants in a blockchain network use to reach an agreement on the state of the blockchain block or ledger.</mark></td></tr><tr><td align="center"><strong>Continuous Auction Mechanism</strong></td><td><mark style="color:$info;">A novel feature on XRPL's AMM designed to reduce impermanent loss by incentivizing arbitrageurs to bid for the right to capture price discrepancies. LPs effectively keep more of a pool’s trading fee revenues, while the arbitrageurs are incentivized to continuously bid at near zero trading fees and maintain stable volatility.</mark></td></tr><tr><td align="center"><strong>Decentralized Application (dApp)</strong></td><td><mark style="color:$info;">An application running on top of blockchain that cannot be controlled or censored by a single person or entity.</mark></td></tr><tr><td align="center"><strong>Decentralized Autonomous Organization (DAO)</strong></td><td><mark style="color:$info;">A decentralized organization managed by its community members through self-enforcing open source code and typically formalized by smart contracts.</mark></td></tr><tr><td align="center"><strong>Decentralized Exchange (DEX)</strong></td><td><mark style="color:$info;">A protocol that facilitates the trade of assets without a central counterparty. Decentralized exchange can also be used to describe a peer-to-peer transaction (P2P).</mark></td></tr><tr><td align="center"><strong>Fork</strong></td><td><mark style="color:$info;">When one blockchain is divided into two blockchains. This type of split happens when an update is made to the blockchain protocol, but not all of the network participants / nodes agree to adopt it.</mark></td></tr><tr><td align="center"><strong>Governance &#x26; governance tokens</strong></td><td><mark style="color:$info;">Governance refers to the maintenance, enforcement, and regulation of a decentralized protocol by token holders. Usually, when a DeFi protocol is released, it does so with a native token. Anyone who holds the protocol’s native token can participate in governance decision-making and changes on the network and propose governance measures themselves.</mark></td></tr><tr><td align="center"><strong>Impermanent Loss (IL)</strong></td><td><mark style="color:$info;">The opportunity cost of participating in a liquidity pool versus having just held the assets in your wallet.</mark></td></tr><tr><td align="center"><strong>Liquidity</strong></td><td><mark style="color:$info;">The ability to sell or buy an asset without causing significant fluctuations in the market price.</mark></td></tr><tr><td align="center"><strong>Liquidity Pool</strong></td><td><mark style="color:$info;">A grouping of 2 tokens that are aggregated and locked up in order to facilitate trading of other users on DEXs or AMMs.</mark></td></tr><tr><td align="center"><strong>Multi-Signature (Multi-Sig) Wallet</strong></td><td><mark style="color:$info;">A wallet which requires multiple private keys (either by one or multiple people) to sign a blockchain transaction before it can be executed.</mark></td></tr><tr><td align="center"><strong>Node</strong></td><td><mark style="color:$info;">A participant on a blockchain network that communicates with other participants to ensure the security and integrity of the system.</mark></td></tr><tr><td align="center"><strong>Non-Custodial</strong></td><td><mark style="color:$info;">Refers to wallets or platforms that you have the complete control of the keys and there is no intermediary custodying your assets for you.</mark></td></tr><tr><td align="center"><strong>Non-fungible Token (NFT)</strong></td><td><mark style="color:$info;">A type of cryptographic token that represents a unique digital or real-world asset.</mark></td></tr><tr><td align="center"><strong>Oracle</strong></td><td><mark style="color:$info;">Data feeds that bring data from off-the-blockchain (off-chain) data sources to put this data on the blockchain (on-chain) for smart contracts to utilize.</mark></td></tr><tr><td align="center"><strong>Private key</strong></td><td><mark style="color:$info;">A cryptographic key (usually 12 or 24 random words - also called passhprase, seed phrase or recovery phrase) to your account on a blockchain. It is used to sign transactions and should NOT be shared with anyone as they would have complete control of your account and crypto assets.</mark></td></tr><tr><td align="center"><strong>Slippage</strong></td><td><mark style="color:$info;">Slippage is defined as the percentage change in the effective price of a trade relative to the pre-swap spot-price.</mark></td></tr><tr><td align="center"><strong>Snapshot</strong></td><td><mark style="color:$info;">The recording of a specific blockchain block/ledger at a certain date and time. It is usually used for airdrops.</mark></td></tr><tr><td align="center"><strong>Spot Price</strong></td><td><mark style="color:$info;">The current price on the open market at which a given asset can be bought or sold for immediate settlement.</mark></td></tr><tr><td align="center"><strong>Trustless</strong></td><td><mark style="color:$info;">A term that means the participants involved do not need to know or trust each other or a third party for verification of an outcome because it’s handled in a decentralized way.</mark></td></tr><tr><td align="center"><strong>Total Value Locked (TVL)</strong></td><td><mark style="color:$info;">Total value locked (TVL) refers to the total amount of value deposited (or staked) in a given DeFi protocol. Higher TVL means greater liquidity and confidence.</mark></td></tr><tr><td align="center"><strong>Validator</strong></td><td><mark style="color:$info;">Validators play a key role in the consensus process as they are responsible for verifying transactions and relaying that information to other validators in order for the blockchain to reach consensus.</mark></td></tr><tr><td align="center"><strong>Zero-Knowledge Proofs:</strong></td><td><mark style="color:$info;">Proofs to verify that transactions are valid without revealing any information about these transactions, providing privacy to the transaction while maintaining its legitimacy.</mark></td></tr></tbody></table>