The ULTIMATE NFT Glossary: terms you should know

25.06.2022
The ULTIMATE NFT Glossary: terms you should know

In the world of NFTs, participants use a huge variety of terms and slang. Some of this came from the stock exchanges, and some of it just appeared in the last couple of years. To be in the topic of all events, to understand everyone and speak the same language with everyone, our team has developed the ultimate NFT Glossary. We have included all the terms you need to know. Also pay attention to the links, thanks to which you will be taken to thematic deep articles.

NFT Glossary

Airdrop

Free distribution of cryptocurrency, NFT, tokens, etc. As a rule, with certain conditions in the form of inviting several people to the project or performing a list of simple actions like likes and reposts in the project community.

All-Time High (ATH) and All-Time Low (ATL)

Accordingly, the highest and lowest price value for the entire time that a coin or token has ever reached.

Allocation

Allocation of limited resources, in this case tokens. If the total allocation, for example, is 1000 tokens, then this amount will be distributed among all participants.

Alcoins

All cryptocurrencies except Bitcoin. Appeared after its entry into the market in order to overcome the technical limitations that Bitcoin has and expand the potential of blockchain technology.

Blockchain

The technology of a decentralized, that is, distributed, owned by no one and securely encrypted storage of information. In fact, just a registry with entries that are stored in blocks. For example, lists of transactions can be stored there. When one block is full, a new one is created and linked to the previous one, thus forming a chain of blocks (blockchain). It is impossible to forge records due to the fact that the registry is decentralized, that is, it is stored simultaneously on many devices. If someone has a record that does not match the rest, it is considered invalid. And also all records are encrypted with high-level cryptography.

Burning

This is the destruction or withdrawal from circulation of the NFT. Basically, the token is “burned” in order to reduce the supply and increase the value of the remaining tokens. The “burning” process occurs by sending the token to an address that no one owns. Although the NFT will still exist on the blockchain, it will not be accessible and therefore considered “burned” or retired.

DAO

A Decentralized Autonomous Organization is an organization that is managed by computer code and a specific set of programs. It is able to work absolutely without the intervention of people and does not depend on them in any way (including its own creators). There are a lot of nuances here. How and with what a particular DAO will work depends entirely on the idea of ​​its creators. For example, from a soda machine that monitors products by itself and pays rent for its place, to full-fledged large organizations whose work is fully automated, and the human factor is reduced to zero (there are still few examples of the latter due to the novelty and complexity of technologies that can provide similar).

DAPP

This is an application that runs without a backend in a decentralized computer system – for example, on a blockchain. That is, all the necessary calculations are performed not through the software and hardware part of the application, but with the help of many computers in the blockchain network, which makes them much faster, more transparent and more reliable.

DeFi (decentralized finance)

A set of services and applications developed using blockchain, cryptocurrencies, tokens and smart contracts. These services are integrated into a single network, offering users services that are usually provided by banks and other financial institutions. Simply put, this is a kind of alternative banking sector, the services of which can be used by people who do not want or are not able to deal with traditional financial institutions and which has every chance to replace the outdated traditional one over time.

DYOR (Do Your Own Research)

Conduct your own research. That is, to check the project on your own, to make sure of its legitimacy.

Farm

Lots of devices with multi-accounts, created or bought to increase the chance of minting NFT on the distributions.

Fiat

National paper currencies are also called symbolic or fiat currencies, because their value is not supported by precious metals as it once was (before the abolition of the gold standard), but is established by the state and supported only by the belief of people that they can exchange them for something. something valuable, and they will not depreciate the next day. The cost of fiat money is regulated by the Central Bank of the state, which controls the issue and the key rate at which it lends this money to private banks (money that it prints itself). Simply put, our ordinary, paper money.

Flip

Buying and quickly selling an asset for a small income, which is usually repeated many times.

Floor price

The lowest recorded price for items in the collection.

FOMO (“Fear of Missing Out”)

A syndrome of overwhelming desire to buy a certain currency/NFT, seeing its rapid growth. Usually this approach is not rational.

Hold

Long-term (a year or more) retention of the currency in the wallet, based on its global growth. Holder is a slang term for those who do not sell their coins for years, regardless of the market situation.

Gas

A unit of measurement for trading fees on the Ethereum network. This commission goes to miners as a reward for providing computing power to operate the network, sweat which is called gas or fuel.

Gem

“Gemstone” is a potentially profitable asset, usually undervalued and hardly noticeable among all the others.

Gwei

This is the denomination of Ethereum (ETH). The same as cents for the dollar, with 1 ETH equal to 1 billion gwei. Mostly this term is used when referring to GAS, for example: the transaction fee is 150 gwei.

ICO

Initial placement of tokens before they are listed on the exchange at a reduced price. This allows the company to attract more investment at the initial stage. It is possible that after the listing, the price of tokens will rise significantly (provided that the team issuing them creates a sufficiently attractive product involving these tokens), which is very beneficial for early buyers.

IEO and IDO

Initial Exchange Offering and Initial DEX Offering, respectively. These are fundraising events that are hosted and controlled by a centralized exchange in the case of an IEO and a decentralized exchange in the case of an IDO.

KYC (Know Your Customer)

User identification requirements for anti-money laundering, which are usually required by exchanges and ICOs. Such verification may be different, but, as a rule, these are passport data.

Listing

The process of placing a cryptocurrency on an exchange or NFT on a marketplace to start trading. Success at this stage often determines the future fate of the token. Admission to the possibility of free conversion for most coins is both a ticket to life, a factor in attracting new investors and the subsequent increase in value and capitalization.

M2E (Move-to-Earn)

A relatively new model of earnings, one of the main popularizers of which was the STEPN project. Unlike P2E, here the reward is not for achievements in the game, but for sports activity, which is tracked using your phone’s sensors. Simply put, the more you walk or run, the more you earn.

Make X’s

When the price of an asset rises several times (for example, they say: makes x10) from the values ​​at which it was bought, which accordingly brings buyers net 100%, 200%, 1000% and so on from their investments.

Mining

In fact, renting out the computing power of your computer to calculate transactions and create new records, and, accordingly, blocks within the blockchain, as well as checking the match with the old ones. That is, the network functions precisely at the expense of miners, and they, in turn, receive a reward in the form of the currency in which they work. This reward often amounts to a transfer fee.

Mint

Turning an ordinary picture, GIF or track into an NFT, appearing in your wallet and the appearance of the first public record in the blockchain network about the owner of this token. “Mint NFT” means to be the first on the network to claim your rights to a particular piece of art.

NFA (Not Financial Advise)

An abbreviation for “not a financial recommendation”. When it comes to the fact that what is described is solely the opinion of the author and his personal investment decision and is not a call to action.

NFT (non-fungible token)

If, for example, the USDT token can be replaced with another similar USDT and there will be no difference, then this will not work with NFT. This is a unique, one-of-a-kind token, the analogue of which does not exist. This is one of the main reasons for the value of such tokens. The second value is the ability to forever leave in the digital space the indisputable fact of owning any asset in the form of a record in the same token about the transaction, the seller, the buyer and the price, because it is impossible to fake any information in the Blockchain network.

Nod

The computer on which a certain program is running and constantly running is part of the functionality in the blockchain network that checks whether the information in new blocks matches the previous ones in order to prevent the repetition of the same currency operation several times.

OTC (Over-the-Counter)

“Bypassing the counter” is a secondary market with people who sell their services or tokens directly, without intermediaries in the form of exchanges, as is customary.

Pump and dump

Pump – a sharp, usually planned, pumping of the value of a coin, in order to then sell it at the highest possible price. On the other hand, with dump, the cost is intentionally dropped.

These definitions are usually associated with a scheme to manipulate little-known and cheap cryptocurrencies, when these currencies are bought in large volumes, which pushes up their price (Pump) and attracts the attention of other investors, who in turn pump it even higher. And then the manipulators simply sell off their entire asset, remaining in a good plus, but at the same time dropping the price down (dump) and leaving all the other attracted investors at a loss. However, the words themselves are applicable in general in any situation when the price of something rises or falls sharply, because it is always connected in one way or another with those who pump the price and drop it, planned or not.

P2E (Play-to-Earn)

These are projects with their own economy, which allows players to earn real money through staking, fa rming in-game currency or creating tokens within the game. All items and resources in such games exist inside the blockchain, due to which it is impossible to challenge their uniqueness and belonging to a specific user.

Road map

Project developers’ plans for the future on how this project will develop. There are tasks that the developers set for themselves, and the deadlines for their implementation. Its presence is not the main indicator of the reliability of the project, and the terms indicated there can be shifted more than once. but if it is not there at all, this is already an alarming bell. No one will be interested in a project if they at least roughly know what to expect from it.

Royalty

In NFT, this is an outstanding bonus to the author (the one who minted first) for each resale of his work in the form of a certain percentage of the amount received by the seller.

Rug pull

When developers abandon the project or abandon it, while taking the money of investors.

Scam

This is an investment project that for some reason stopped (or did not even plan to) pay funds to investors. In a broad sense, this is generally any deception of the user for money, in any possible way.

Shilling

Any activity on the network aimed at promoting a cryptocurrency or a crypto project for its own benefit. It comes in all shapes and sizes, from messages in telegram chats and small Twitter accounts with links to their projects to John McAfee and Elon Musk trying to influence the entire market.

Smart contract

A program that checks whether all the conditions were met by the seller and the buyer during the exchange of crypto assets, if yes – it makes a deal, if not – it returns the assets to the owners. Inside the blockchain, smart contracts perform a lot of functions. For example, the ability to change an NFT if another NFT is present in your collection is also implemented thanks to them, but these functions are mostly out of the view of the average user.
With the help of tokens and smart contracts, you can digitize any things from the real world and trade them in cryptocurrency.

Stacking

A form of passive income on cryptocurrency, when the reward is charged simply for keeping the currency in the wallet. This process uses the Proof of Stake (PoS) algorithm – proof of ownership, that is, the more currency in your wallet, the greater the reward.
The main risk here is the possibility of a fall in the price of the held asset, the lower the coin rate, the less the 10%, 20% or 100% reward will be.

Swap

The exchange of one asset for another at a certain rate, performed between two users or between a user and an exchange.

Usability

The degree of ease of use of the application or the site, but in NFT, this is the criterion by which the conclusion is drawn and the benefits of this token for the buyer. What does this particular NFT give him – access to a secret chat, exclusive use or a discount in other projects. Or it’s just a picture and that’s it (then they say “zero Usability”).

WETH (Wrapped ETH)

This is an ERC-20 compliant version of the air. Since the native currency of the Ethereum blockchain was created before the ERC-20 standard, it cannot be exchanged directly for other ERC-20 tokens. In order to exchange ether for other Ethereum-based tokens according to the ERC-20 standard, it must be wrapped in WETH. Wrapping ETH does not affect its value, the ratio remains 1:1. Wrapped Ether can be created by sending Ether to a smart contract, which takes Ether and gives ERC20 tokens in return. This action can also be used in the opposite direction, which is called the “deployment” of the ether.

Whales

This term refers to especially large holders of digital assets, whose actions often greatly affect the price of these assets.

Whitelist (WL)

A limited list of persons (mainly project partners) who are guaranteed to be able to buy back the NFT of a project, since usually the number of people who want to mint exceeds the number of tokens. The conditions for getting into the WL are very different and most often, even if they are met, it is a matter of luck. At the same time, it is at least desirable to have Twitter and Discord accounts as the most popular social networks for NFT-users, and it is there that details about WL and airdrops are most often posted.

Yield Farming

A way to earn cryptocurrency using another one you already own. In a broad sense, this is any effort to make your crypto assets work and get the maximum profit from these assets.