Wrapped tokens are digital assets that represent another cryptocurrency on a different blockchain. They allow tokens from one blockchain, like Bitcoin, to be used on another, such as Ethereum, by creating a compatible version. This makes it possible to use assets across different platforms and take advantage of various services, such as decentralised finance applications.
A token airdrop is when a blockchain project distributes free tokens or cryptocurrencies to a group of people, usually to promote the project or reward loyalty. Recipients might be chosen based on criteria like holding a specific cryptocurrency, participating in a community, or signing up for an event. The process is designed to spread awareness…
An Initial Coin Offering (ICO) is a way for new cryptocurrency projects to raise money by selling their own digital tokens to investors. These tokens are usually bought with established cryptocurrencies like Bitcoin or Ethereum. The funds collected help the project team develop their product or service. ICOs are somewhat similar to crowdfunding, but instead…
A token vesting schedule is a plan that determines when and how tokens are gradually released to recipients, such as founders, team members or investors. Instead of receiving all their tokens at once, recipients get them over a set period, often with specific milestones or dates. This method helps encourage long-term commitment and reduces the…
A rug pull is a type of scam often seen in cryptocurrency and decentralised finance projects. It occurs when the creators of a project suddenly withdraw all their funds from the liquidity pool or treasury, leaving investors with worthless tokens. These scams usually happen after a project has attracted significant investment, making it difficult for…
An Automated Market Maker (AMM) is a type of technology used in cryptocurrency trading that allows people to buy and sell digital assets without needing a traditional exchange or a central authority. Instead of matching buyers and sellers directly, AMMs use computer programmes called smart contracts to set prices and manage trades automatically. These smart…
A liquidity pool is a collection of funds locked in a smart contract that allows users to trade cryptocurrencies or tokens automatically. Instead of relying on a traditional buyer and seller, these pools use algorithms to set prices and enable instant transactions. Liquidity pools are an important part of decentralised finance, making it easier for…
Impermanent loss is a temporary reduction in the value of funds provided to a decentralised finance (DeFi) liquidity pool, compared to simply holding the assets in a wallet. This happens when the prices of the pooled tokens change after you deposit them. The bigger the price shift, the larger the impermanent loss. If the token…
A Centralised Exchange (CEX) is an online platform where people can buy, sell, or trade cryptocurrencies using a central authority or company to manage transactions. These exchanges handle all user funds and transactions, providing an easy way to access digital assets. Users typically create an account, deposit funds, and trade through the exchange’s website or…
Gas fees are payments made by users to cover the computing power required to process and validate transactions on a blockchain network. These fees help prevent spam and ensure the network runs smoothly by rewarding those who support the system with their resources. The amount of gas fee can vary depending on network activity and…