100,000 Questions and Answers about Cryptocurrencies 5
What is an ERC-20 token?
An ERC-20 token is a standard for tokens issued on the Ethereum blockchain. It defines a common set of rules and functions that allow tokens to be compatible with Ethereum wallets and decentralized applications.
What is a BEP-20 token?
A BEP-20 token is a standard for tokens issued on the Binance Smart Chain (BSC). Similar to ERC-20, it defines a set of rules for tokens to be interoperable on the BSC ecosystem.
What is a liquidity pool?
A liquidity pool is a pool of funds locked in a smart contract that facilitates trading on a decentralized exchange. Traders provide liquidity by depositing tokens into the pool in exchange for trading fees and liquidity provider tokens.
What is impermanent loss protection?
Impermanent loss protection refers to strategies or mechanisms that aim to mitigate the potential loss of value when providing liquidity to a liquidity pool. This can include using derivatives or specialized protocols.
What is a yield aggregator?
A yield aggregator is a platform that allows users to deposit their crypto assets and automatically optimize their yield across various decentralized finance (DeFi) protocols.
What is a lending protocol?
A lending protocol is a smart contract-based platform that allows users to lend and borrow crypto assets in a decentralized manner. Borrowers pay interest, while lenders earn rewards.
What is a stablecoin arbitrage?
Stablecoin arbitrage involves taking advantage of price differences between stablecoins on different exchanges or platforms to profit from the discrepancy.
What is a zero-knowledge proof?
A zero-knowledge proof is a cryptographic technique that allows one party to prove to another party that a statement is true without revealing any additional information beyond the fact that the statement is indeed true.
What is a zero-knowledge rollup?
A zero-knowledge rollup is a scaling solution for Ethereum that bundles multiple transactions off-chain and submits a cryptographic proof of their validity to the main chain, reducing gas fees and improving scalability.
What is a bridge?
A bridge is a technology that allows assets to be transferred between different blockchains. It enables interoperability between different networks and ecosystems.
What is a wrapped bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) is an ERC-20 token that represents a 1:1 peg to Bitcoin. It allows Bitcoin to be used in Ethereum-based decentralized applications and protocols.
What is a wrapped ether (WETH)?
Wrapped Ether (WETH) is an ERC-20 token that represents Ether (ETH), the native currency of Ethereum. It allows Ether to be used in DeFi protocols that require ERC-20 tokens.
What is a decentralized oracle network?
A decentralized oracle network is a network of oracles that provides external, off-chain data to smart contracts on a blockchain in a decentralized and trustless manner.
What is a crypto wallet seed phrase?
A crypto wallet seed phrase is a series of randomly generated words that can be used to recover a wallet and its associated funds if the wallet is lost or forgotten. It is essential to keep the seed phrase safe and secure.
What is a crypto wallet private key?
A crypto wallet private key is a secret code that allows the holder to access and manage the cryptocurrency associated with a wallet's public key. It must be kept secure to protect funds.
What is a decentralized autonomous organization (DAO)?
A DAO is an organization represented by rules encoded as smart contracts on a blockchain. It is governed by its members through a decentralized voting process without central authority.
What is a token airdrop?
A token airdrop is a marketing technique where free tokens or coins are distributed to wallet addresses to increase awareness or reward early supporters of a project.
What is a token burn event?
A token burn event is when a project or protocol permanently removes tokens from circulation by sending them to an unspendable address. This reduces the total supply and can increase the value of remaining tokens.
What is a token generation event (TGE)?
A token generation event (TGE) is when a new cryptocurrency token is created and distributed to investors or participants in an initial coin offering (ICO) or similar fundraising event.
What is a token swap?
A token swap is the process of converting one cryptocurrency token to another. It can involve exchanging tokens for another token within the same blockchain or migrating tokens from one blockchain to another.