The underlying technology of Web3 is open to innovation. It is the only world where unicorns will be common, there will be numerous acronyms, and the vocabulary will always change. So it’s quite difficult for the newbie to understand the web3 meaning. But don’t worry now you are on the right page.

For understanding any industry you must become familiar with the terms.

So this article gives you an understanding of some of the web3 terms that you should know.

Understanding web3 terminology

Airdrop

Just like a new shop in the real world give some free product to advertise themselves and make a loyal customer, similarly in the world of web3 whenever a new crypto project starts they give some free crypto tokens this is called an airdrop.

AMM (Automated market maker)

Through the use of liquidity pools rather than a traditional market of buyers and sellers, automated market makers enable the automatic and permissionless trading of digital assets.

Bridge

A protocol that enables communication across different blockchains, allowing the exchange of data, coins, and other types of information.

Burn

The process of transferring tokens to an unreachable wallet address in order to remove them from a cryptocurrency's circulating supply. The same procedure can also be used to burn NFTs and other digital assets.

Consensus Mechanism

Any approach used to establish trust, security, and agreement across a decentralized computer network is referred to as a consensus mechanism.

Two of the most common consensus mechanisms are proof-of-work (PoW) and proof-of-stake (PoS).

Cold wallet

It is a place to store digital assets offline, protecting them from bad actors.

Collateral

Any asset that is accepted as a guarantee for a loan, whether it be a tangible one like real estate or a digital one like an NFT.

Decentralized

A system that runs decentralized peer-to-peer networks instead of being under the control of a single entity or authority.

Difficulty

The amount of computational power required to mine blocks and verify transactions on a proof-of-work blockchain.

DeFi

‍Decentralized Finance, or DeFi, is the term used to describe a financial system constructed on the blockchain that is completely decentralized and not controlled by any centralized authority, such as a bank, governmental body, or financial management company.

Gas fees

‍On the Ethereum blockchain, it is the cost needed to carry out a transaction or contract.

Hot wallet

‍It is a place to keep digital assets because it is portable and instantly available, but it also makes users more vulnerable to hackers. A few well-known wallets include MetaMask, Coinbase Wallet, and Edge Wallet.

ICO

‍ICO stands for initial coin offer, just like an IPO in the stock market this technique is used to raise capital in the crypto market for a crypto-based project.

Minting

‍The process of converting a digital asset into one that can be kept on a blockchain is known as minting. Thus, it becomes distinct and is regarded as an NFT.

Moon

‍It is a phrase used to describe situations in which the floor price suddenly increases to the moon.

Non-fungible

‍Something which is unique in nature that can’t be interchanged by anything else is called non-fungible.

Peer-to-peer

‍A dispersed network without a centralized server or other entity that allows two or more computers to communicate directly with one another.

Rugpull

‍A rugpull is a typical scam in which a developer intentionally withdraws from a cryptocurrency project they have invested in, by taking token value with them.

Smart contracts

‍Self-executing contracts created with the blockchain are known as smart contracts. A smart contract is a piece of software code that can make agreements autonomously on the blockchain without the need for external supervision.

Slippage

‍Slippage is the difference in an asset's price between when an order is placed and when the transaction is actually carried out.

Tokenomics

‍The term "tokenomics," which combines the words "token" and "economics," refers to all of the different characteristics of a virtual currency that might influence its market value to fluctuate.

Web3 Acronyms Terms

DYOR - Do Your Own Research

FOMO - Fear Of Missing Out

WAGMI - We Are Going to Make It

NGMI - Not Going To Make It

ATH - All-Time High

ATL - All-Time Low

Conclusion

The web3 world is filled with technological marvels, as well as a completely new vocabulary. This concludes your introduction to the jargon used in the world of web3. I am sure you have come to a step ahead in your web3 journey. 

Now you know most of the terms you need to know about web3, keep your energy high, and learn more about it as this is going to be the future.

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