Crypto terms explained simply

KYCIdentity verification used by exchanges, wallets with fiat rails and crypto card providers. Maker / taker feesThe trading fee model used by order-book exchanges. SpreadThe gap between the buy and sell price of an asset. Withdrawal feeA fee charged when moving crypto from a platform to another wallet. Order bookA live list of buy and sell orders on an exchange. Market orderAn order that executes quickly at the best available price. Limit orderAn order that executes only at a chosen price or better. LiquidityHow easily an asset can be bought or sold without moving the price too much. SlippageThe difference between expected and actual execution price. Fiat on-rampA way to buy crypto using traditional currency. Fiat off-rampA way to convert crypto back into traditional currency. Withdrawal limitThe maximum amount a user can withdraw within a period. Trading pairTwo assets that can be traded against each other on an exchange. Spot tradingBuying or selling crypto for immediate settlement. Margin tradingTrading with borrowed funds, which increases both risk and exposure. Futures contractA derivative contract used to speculate on future price movement. Perpetual contractA futures-style contract without a fixed expiry date. Funding rateA periodic payment mechanism used in perpetual futures markets. LiquidationForced closing of a leveraged position when margin is insufficient. Stop-lossAn order designed to limit losses if price moves against a trade. Take-profitAn order designed to close a trade after reaching a profit target. Trading volumeThe amount of an asset traded during a period. Depth chartA visual view of buy and sell liquidity in an order book. ArbitrageBuying and selling across markets to profit from price differences.

Seed phraseA wallet recovery phrase that controls access to crypto funds. Self-custodyHolding crypto with your own private keys instead of an exchange account. Private keyA secret key that proves control over crypto funds. Public keyA cryptographic key used to derive wallet addresses. Wallet addressThe destination string used to receive crypto. Hot walletA crypto wallet connected to the internet. Cold walletA wallet setup designed to keep keys offline. Hardware walletA physical device used to store private keys offline. Custodial walletA wallet where a third party controls custody. Non-custodial walletA wallet where the user controls the keys. Mnemonic phraseAnother name for a wallet recovery phrase. PassphraseAn optional extra wallet security phrase used by some wallets. Multisig walletA wallet that requires multiple signatures to approve transactions. Wallet backupA secure backup method for recovering wallet access. Address bookA saved list of trusted wallet addresses on a platform. Withdrawal whitelistA security feature that allows withdrawals only to approved addresses. Recovery phraseWords used to restore a crypto wallet.

Gas feeA network fee paid to process blockchain transactions. StablecoinA crypto asset designed to track another asset, often the US dollar. StakingLocking or delegating crypto to support a network or earn rewards. APYAnnual percentage yield, including compounding assumptions. APRAnnual percentage rate, usually without compounding. Smart contractCode that runs on a blockchain and can manage assets or rules. DeFiDecentralized finance apps built with blockchain protocols. BridgeA tool for moving assets between blockchain networks. Proof of reservesA method exchanges use to show evidence of customer asset backing. Two-factor authenticationAn extra login security step beyond a password. PhishingA scam that tricks users into revealing passwords, keys or seed phrases. AMLAnti-money laundering rules and checks used by financial platforms. TokenA crypto asset issued on an existing blockchain network. CoinA crypto asset native to its own blockchain. BlockchainA distributed ledger that records transactions in blocks. Layer 1A base blockchain network such as Bitcoin, Ethereum or Solana. Layer 2A scaling network built on top of another blockchain. MainnetThe live version of a blockchain network. TestnetA testing version of a blockchain network. Block confirmationA signal that a blockchain transaction has been included in a block. MempoolA waiting area for blockchain transactions before confirmation. NonceA number used to order transactions from a wallet. Token approvalPermission for a smart contract to spend a token from a wallet. Revoke approvalRemoving a smart contract's permission to spend tokens. DEXA decentralized exchange that lets users trade through smart contracts. CEXA centralized exchange operated by a company or platform. Liquidity poolA pool of assets used by decentralized exchanges and DeFi apps. Impermanent lossA risk liquidity providers face when asset prices move. Yield farmingMoving assets between DeFi opportunities to earn rewards. AirdropA distribution of tokens to users or wallet addresses. Wrapped tokenA token that represents another asset on a different network. OracleA service that brings external data into smart contracts. DAppA decentralized app that interacts with blockchain networks. KYC tierAn account verification level that can affect limits and access. Source of fundsInformation about where money or crypto assets came from. Travel RuleA compliance rule that can require information for certain crypto transfers. Sanctions screeningChecks used to identify restricted users, entities or transactions. ChargebackA card payment reversal that can affect crypto purchase methods. CashbackA reward returned after eligible card spending. FX feeA foreign exchange fee charged when spending or converting currencies. Card spreadA pricing difference that can affect crypto card spending costs. Custody riskThe risk of relying on a third party to hold assets. Platform riskThe risk that a service changes rules, fails or restricts access. DepegWhen a stablecoin loses its intended price relationship.