Glossary

Blockchain Glossary

Address - A unique identifier used to receive and send cryptocurrency transactions on a blockchain.
Block - A collection of transactions recorded on a blockchain, grouped together and secured through cryptographic hashing.
Blockchain - A decentralized, distributed ledger technology that records transactions in an immutable and transparent manner.
Consensus Mechanism - The protocol used by blockchain networks to achieve agreement on the state of the ledger among distributed participants. Examples include Proof of Work (Bitcoin), Proof of Stake (Ethereum 2.0), and Delegated Proof of Stake.
Cryptocurrency - A digital or virtual currency that uses cryptographic techniques to secure transactions and control the creation of new units.
dApp (Decentralized Application) - An application built on a blockchain network that operates autonomously through smart contracts, without relying on centralized servers or intermediaries.
Decentralization - The process of distributing control and decision-making away from a central authority to a distributed network.
Ethereum - A blockchain platform known for its smart contract functionality, enabling decentralized applications (dApps) to be built and deployed.
EVM (Ethereum Virtual Machine) - A decentralized computing environment that executes smart contracts and powers decentralized applications on the Ethereum blockchain.
Fork - A split in a blockchain network resulting in two separate chains, either as a planned upgrade (soft fork) or a fundamental change creating a new cryptocurrency (hard fork).
Gas - A unit of computational effort required to execute transactions and smart contracts on the blockchain.
Immutable - The characteristic of blockchain where data, once recorded, cannot be altered or deleted.
Layer 0 - The foundational infrastructure of blockchain networks that enables interoperability, scalability, and cross-chain communication, supporting Layer 1 blockchains. Examples of Layer 0 networks include Cosmos, Polkadot, LayerZero and Avalanche.
Layer 1 - The base layer of a blockchain network responsible for transaction validation, security, and consensus, examples include Bitcoin, Ethereum, and Solana.
Layer 2 - A scaling technology built on top of an existing blockchain (Layer 1) that processes transactions off-chain while inheriting the main network's security. Layer 2 solutions reduce fees and increase speed by batching multiple transactions together and only periodically settling them on the main chain. Examples include Polygon, Base, and Avalanche (for Ethereum).
Mainnet - The primary and fully developed version of a blockchain where real transactions take place using the network’s native cryptocurrency.
Mining - The process of validating transactions and adding new blocks to a blockchain through solving complex mathematical problems, primarily used in Proof of Work consensus mechanisms.
Native Token - The primary cryptocurrency of a blockchain, used to pay for transactions, gas fees, and secure the network. Examples include ETH for Ethereum and BTC for Bitcoin.
Network - A collection of interconnected nodes that communicate and maintain the blockchain, ensuring decentralization and security.
Offchain - Activities, transactions, or data that occur outside the blockchain to improve scalability and reduce transaction costs, often settled on the blockchain later.
Onchain - Activities, transactions, or data that are recorded directly on the blockchain and are fully transparent and immutable.
Private Key - A cryptographic key used to sign transactions and access cryptocurrency holdings, which must be kept secure.
Private Network - A blockchain network that is restricted to specific participants, offering greater control, security, and privacy for enterprises or consortium-based applications. This is often not needed.
Public Key - A cryptographic key that serves as an address for receiving funds and is derived from the private key.
Public Network - A blockchain network that is open and accessible to anyone, allowing participants to to read, write, and validate transactions without restrictions.
Rollup - A Layer 2 scaling solution that bundles multiple transactions into a single batch, processes them , and posts a summary to the Layer 1 blockchain to reduce congestion and lower fees , while maintaining high security levels.
RPC (Remote Procedure Call) - A communication protocol that allows a user or application to interact with a blockchain node remotely, enabling transaction broadcasting and data retrieval.
Sidechain - A separate blockchain that runs parallel to the main blockchain and is connected to it through a two-way peg, allowing assets to be transferred between chains.
Testnet - A separate blockchain environment used for testing new features, smart contracts, and applications without risking real assets.
Token - A digital asset issued on a blockchain that can represent a variety of assets or utilities.
Validator - In Proof of Stake systems, a participant who stakes cryptocurrency to validate transactions and create new blocks, replacing miners in Proof of Work systems.
Wallet - A digital tool used to store and manage cryptocurrencies or assets, as well as sign transactions, which can be software-based (hot wallet) or hardware-based (cold wallet).

Smart Contracts Glossary

ABI (Application Binary Interface) - A standardized way to interact with smart contracts, defining the methods and structures used for communication between applications and the blockchain.
Call - A read-only interaction with a smart contract that does not change the blockchain state.
CBDC (Central Bank Digital Currency) - It is a new form of money issued electronically by a central bank. Central Banks are looking to issue their own digital currencies to improve the payment system.
Claims - ZK proof linked to an ONCHAINID attesting the trustworthiness and truthfulness of information provided by the owner of the ONCHAINID.
DAO (Decentralized Autonomous Organization) - An organization represented by rules encoded as smart contracts, operated by its members without centralized leadership.
DeFi (Decentralized Finance) - Financial services built on blockchain technology using smart contracts, eliminating intermediaries.
DVA (Delivery vs. Approval) - Enforce conditional transfer by requesting one or several (up to five) wallet signatures to trigger the transfer of an ERC-3643 security token. This operation is performed by a smart contract issued by Tokeny. One DVA smart contract is deployed per supported blockchain network.
DVD (Delivery vs. Delivery) - An atomic swap transfer between an ERC-3643 security token and a stablecoin or another ERC-3643 security token. This operation is performed by a smart contract issued by Tokeny. One DVD smart contract is deployed per supported blockchain network.
DVP (Delivery vs. Payment) - Securities settlement mechanism that links a securities transfer and a funds transfer in such away as to ensure that delivery occurs if and only if the corresponding payment occurs.
EIP (Ethereum Improvement Proposal) - A formal proposal for improvements to the Ethereum network, including updates to smart contracts, consensus mechanisms, and standards.
ERC (Ethereum Request for Comments) - A set of standards defining different types of tokens and smart contract functionality on the Ethereum blockchain (e.g., ERC-20, ERC-721, ERC-1155, ERC-3643).
ERC-20 - A widely adopted Ethereum token standard defining rules and functions for fungible tokens, such as transferability, approvals, and total supply.
ERC-721 - A non-fungile token standard on the Ethereum blockchain. It provides a set of guidelines for creating unique tokens that represent digital assets. These tokens are non-fungible, meaning that they cannot be exchanged on a on-to-one basis due to their unique properties.
ERC-1400 - A token standard that represents a critical development in the intersection of blockchain technology and regulated financial markets.
ERC-3643 - A token standard designed for regulated security tokens, enabling compliance with legal requirements such as identity verification and transfer restrictions.
ERC3643 - Without the “-”, it refers to the ERC3643 non profit association.
Event - A logging mechanism in smart contracts that allows external applications to listen for and respond to contract state changes.
Gas Limit - The maximum amount of gas a user is willing to spend on executing a smart contract transaction.
Gas Price - The cost per unit of gas required to execute a transaction on the blockchain.
Gas Optimization - Techniques to reduce the computational cost of executing smart contracts, resulting in lower transaction fees.
Governance Token - A cryptocurrency that grants holders voting rights to participate in protocol decisions and changes, often used in DAOs.
Immutability - The characteristic of smart contracts where code cannot be altered once deployed.
Interface - A contract structure that defines function signatures without implementation, enabling interoperability.
Memecoins - A type of crypto asset inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community to purchase the memecoin and engage in its trading
ONCHAINID - Open source solution representing an identity on the blockchain, used to enforce compliance together with the ERC-3643 standard.
Oracle - A service that provides real-world data to smart contracts, enabling them to react to off-chain events.
Smart Contract - A self-executing contract with predefined rules and conditions, running on a blockchain.
Solidity - The primary programming language used for writing smart contracts on the Ethereum blockchain.
Stablecoins - Cryptocurrencies designed to maintain a stable value by being pegged to an asset such as fiat currency or commodities, often utilizing smart contracts for issuance and management.
T-REX Protocol - Code name of the ERC-3643 before it became official. Stands for Token for Regulated Exchanges. Also used as the branding basis of the Tokeny line of products.
Web 3 - A term used to describe the next iteration of the internet, one that is built on blockchain technology and is communally controlled by its users.
ZK proof (Zero-Knowledge Proof) - A cryptographic technique that allows one party (the prover) to prove to another party (the verifier) that they know something without revealing the actual information itself.

Wallets Glossary

Cold Wallet - A cryptocurrency wallet that is not connected to the Internet, providing enhanced security by reducing exposure to online threats.
Hot Wallet - A cryptocurrency wallet that is connected to the Internet, allowing quick access to funds.
Custodial Wallet - A wallet where a third-party service provider holds and manage private keys on behalf of the user.
Non-custodial Wallet - A wallet where the user has full control over their private keys and funds, without reliance on a third-party.
Hardware Wallet - A physical device used to securely store private keys offline, providing added security against attacks.
Seed Phrase - A series of words (typically 12 or 24) that can be used to recover a wallet and access to all associated private keys.
Social Recovery - A security feature allowing wallet recovery through trusted contacts instead of a seed phrase.
Software Wallet - A digital application or program that stores and manages private and public keys for cryptocurrency transactions.
Mobile Wallet - A cryptocurrency wallet designed for smartphones, allowing users to send, receive, and manage crypto on the go.
Desktop Wallet - A software wallet that runs on a desktop computer, offering a balance between security and accessibility.
Web Wallet - An online-based wallet that can be accessed through a browser, often provided by exchanges or third-party services.
Integrated Wallet - Defines a wallet provided by Tokeny through a 3rd party integration. Currently, integrated wallets are only available for investors. Tokeny does not control the private keys, these wallets are managed by the 3rd party integrator, and the final user is in control of the private key.
Non-integrated Wallet - Any wallet used and controlled by the user (agent, owner or investor). The private key is completely in control of the user.
Multi-Signature (Multi-Sig) Wallet - A wallet that requires multiple private keys to authorize a transaction, enhancing security.
Private Key - A secret cryptographic key that allows a user to sign transactions and access their cryptocurrency and assets holdings.
Public Key - A cryptographic key derived from the private key. From the public key, the public address is derived, which is the one used for receiving funds.
Address - A unique alphanumeric identifier used to send and receive cryptocurrencies.
Smart Contract Wallet - A wallet that operates using smart contract logic, enabling automation, multi-signature approvals, and other programmable features.
WalletConnect - An open-source protocol that allows users to securely connect their wallets to decentralized applications (dApps).

Finance Glossary

AMM (Automated Market Maker) - A protocol that uses mathematical formulas to price assets in liquidity pools, enabling decentralized trading without order books.
Asset – Anything of value owned by an individual, company, or institution, such as cash, stocks, real estate, or intellectual property.
Balance Sheet – A financial statement showing a company’s assets, liabilities, and equity at a specific point in time.
Bond – A fixed-income security representing a loan made by an investor to a borrower, typically a corporation or government.
Capital – Financial resources available for investment or spending, including cash, assets, and equity.
Capital Calls – Requests made by investment funds to investors (limited partners) to provide additional capital as agreed upon in the fund’s terms.
CEX (Centralized Exchange) – A cryptocurrency exchange operated by a centralized entity that facilitates the buying and selling of digital assets.
Close-Ended Fund – An investment fund with a fixed number of shares that does not issue new shares or redeem shares from investors.
Collateralization Ratio - The proportion of collateral value to borrowed value in a lending protocol, ensuring loan security.
Credit Score – A numerical representation of an individual's creditworthiness based on their credit history.
Cut-off Time – The deadline by which transactions, such as trade orders or fund subscriptions, must be completed for processing. Transactions completed before the cut-off time will use the current NAV of that day and the ones submitted after it, will use the NAV of the next business day.
Debt – Money borrowed by one party from another that must be repaid, typically with interest.
DeFi (Decentralized Finance) – A financial ecosystem built on blockchain technology that enables peer-to-peer transactions, services, and applications without the need for traditional intermediaries such as banks, brokers, or insurance companies. DeFi leverages smart contracts to automate processes and provide decentralized alternatives for lending, borrowing, trading, and more.
Equity – Ownership in an asset or company after deducting liabilities, often represented as shares.
Escrow – A financial arrangement where a third party holds funds or assets until predetermined conditions are met.
Escrow Account – A bank or financial account where funds are held in escrow until the agreed-upon conditions are met.
ETC (Exchange-Traded Commodity) – A security that tracks the performance of a commodity or basket of commodities and trades on an exchange.
Flash Loan - An uncollateralized loan that must be borrowed and repaid within a single transaction block, typically used for arbitrage opportunities.
General Partner (GP) – The managing entity in a private equity or venture capital fund responsible for investment decisions and fund operations.
Hedge Fund – A pooled investment fund that employs various strategies to earn returns for investors, often with high risk.
Impermanent Loss - The temporary reduction in value that liquidity providers may experience compared to simply holding assets, due to price fluctuations.
Instrument – A financial contract or asset, such as stocks, bonds, derivatives, or commodities, used for investment or trading.
Interest Rate – The cost of borrowing money or the return earned on savings, expressed as a percentage.
KYC (Know Your Customer) – A regulatory requirement for financial institutions to verify the identity of their customers to prevent fraud and money laundering.
KYB (Know Your Business) – A compliance process used to verify the identity and legitimacy of businesses engaging in financial transactions.
KYT (Know Your Transaction) – A compliance framework that monitors financial transactions to detect suspicious activities related to money laundering and fraud.
Liquidity – The ease with which an asset can be converted into cash without significantly affecting its value.
Limited Partner (LP) – An investor in a private equity or venture capital fund with limited liability and no active management role.
Limited Partnership Agreement (LPA) – A legal document outlining the terms, roles, and obligations of partners in a limited partnership, commonly used in private equity and venture capital funds.
Market Capitalization – The total value of a company’s outstanding shares, calculated by multiplying share price by the number of shares.
ML/TF (Money Laundering / Terrorist Financing) – Illegal financial activities aimed at disguising the origins of illicit funds or financing criminal or terrorist activities.
NAV (Net Asset Value) – The value of an investment fund’s assets minus its liabilities, often used to price shares in mutual funds and ETFs.
Net Worth – The total value of a person’s or company’s assets minus liabilities.
Open-Ended Fund – A fund that continuously issues and redeems shares based on investor demand, such as mutual funds.
PEP (Politically Exposed Person) – An individual with a high-profile public position, increasing the risk of corruption or money laundering.
Portfolio – A collection of financial investments such as stocks, bonds, and real estate.
Primary Market – The market where securities are issued and sold directly by the issuer to investors.
Redemption – The process of withdrawing funds from an investment, such as selling mutual fund shares back to the issuer.
Return on Investment (ROI) – A measure of the profitability of an investment, calculated as the gain or loss relative to the investment cost.
Risk Management – Strategies used to identify, assess, and mitigate financial risks.
Secondary Market – The marketplace where previously issued securities are traded among investors, such as stock exchanges.
Security – A tradable financial asset such as stocks, bonds, or derivatives.
Security Token – A blockchain-based digital asset representing ownership in a real-world financial instrument, such as equity or bonds.
Slippage - The difference between expected and executed price of a transaction due to market movement, often occurring in decentralized exchanges.
Stock – A share representing partial ownership in a company.
Subscription – The process of purchasing shares or units in an investment.
Settlement – The process of finalizing a financial transaction, ensuring the transfer of funds or securities between parties.
Token Economics (Tokenomics) - The study of economic systems built around a token, including distribution, incentives, and utility mechanisms.
TradFi (Traditional Finance) – The conventional financial system consisting of banks, stock markets, centralized institutions, and regulatory frameworks.
Yield – The earnings generated on an investment, typically expressed as a percentage of the investment cost.