The $ amount of all tokens within a certain liquidity pool, blockchain, or protocol. DeFi: Decentralized Finance- A financial system that aims to disrupt the traditional financial system by using decentralized applications.
A community-controlled group focused on a specific cause. These are booming. Can earn money through participating in these groups. The more governance tokens you have, the more voting power.
The yearly interest earned if you don't compound. Ex: you have 100$ earning 50% APR. At the end of the year, you'll make 50$.
The yearly interest earned if you compound. Ex: you have 100$ earning 50% *APR*. This time you can take your *daily* reward and compound it. At the end of the year, you'll earn 64% *APY* even though APR is the same.
Where you can buy/sell coins. Stand clear wen possible. KYC. Can seize your assets: i.e Coinbase/Binance/FTX KYC: Know Your Customer- Rules that allow all activity to be linked to your personal identity. Governments want this so they can watch you.
More so run by lines of code than people. Can buy/sell coins. Involves self-custody of assets. No KYC. AMM: Automated Market Maker- Type of DEX that allows users to buy/sell assets by using a smart contract instead of an order book i.e Osmosiszone.
The breakdown of the disbursement of a project's token. These vary project by project. Tokens are split up between the developer team, early investors, retail trading, rewards etc.
These assets are not locked up and can be traded instantly. The more liquidity, the healthier the project. If low liquidity, may not have the supply needed to complete trades.
A pot of 2 assets that are typically (but not always) bonded at a 1:1 ratio (in terms of $). When users want to swap 1 token they have for another, they go to the LP and pay a swap fee to trade tokens. *LPs are a huge part of AMMs and DeFi*.
Someone who deposits their 2 assets into a liquidity pool at the desired ratio. They receive token shares representing their percentage of ownership of the entire pool. Shares can be redeemed for assets. Earn swap fees and yield in form of governance token.
Difference in value between bonding tokens in a liquidity pool vs HODLing. The amount of loss fluctuates until exiting the pool. When supplying to LP, if one asset's price goes up, your share gives you more of the underperforming asset.
This is because your share needs to stay balanced at 1:1 $ amount. If the price of token A increased a lot, your share will need more of token B to balance out. So when you redeem, you have fewer A tokens and more B tokens compared to if you just HODLed.
Hold On for Dear Life.
Value of the asset assuming all tokens have been released into circulation. Ex: Project A has max supply of 100 coins. Each coin is 1$. FDV=100$ even though only 50 coins are currently circulating.
Provide price data to DeFi protocols. With DeFi running on code, Oracles like Chainlink provide data to make sure everyone is buying and selling at the correct price.
Self-explanatory. Some projects look clean, others like doo doo.
This is an encompassing term for many different strategies that involve earning money by earning interest (yield). Strategies mainly include lending/borrowing, liquidity mining, and being a liquidity provider.
Allow you to buy an asset on leverage. Amplifies gains or losses. Risk of losing it all if the price goes the wrong way, i.e buying 10x BTC long *perp*. If BTC goes up 10%, you are up 100%.
Lines of code that complete an action when terms are met. Example: Buy an NFT for 1ETH. Seller gets 1 ETH, buyer gets NFT. A smart contract is the code that allows the exchange to happen. Liquidity pools also operate on smart contracts.
Apps that operate on lines of code rather than a central authority. This is where you go to access smart contracts i.e Uniswap.
Generic term used to describe a shift of the current internet to increase the use of blockchain technology.
$USDC (Circle), $USDT (Tether), $UST (R.I.P). Assets that are supposed to always equal 1$. DeFi wallets don't hold fiat so stablecoins allow you to keep money on sidelines and quickly buy when desired.
Considered good in crypto. A transaction that can happen without the need of approval from a central party.
No central authority can control what you do. Some dApps are permissionless. Ex: You can create your own token pair for a liquidity pool.
Assets you need to put on the line to take out a loan. If you're losing too much money on your loan, your collateral gets taken Liquidation - When loan providers close out your loan. This means you lose the money loaned out and the collateral.
Must put up more collateral than the loan is worth. Ex: If you want a 10$ loan, put up 15$ as collateral. The ratio is 150%. Needs to be maintained. If too little collateral is backing the loan, can get liquidated.
Purpose is to maximize yields by finding the best rates across different protocols, i.e yearn.finance.
Not gonna make it (dog coin pumpers/youtube price predictors).
We are all gonna make it (I hope).