Forex noun
The foreign exchange market, a decentralised global marketplace for trading national currencies against each other.
A day trader buys 100,000 EUR/USD at 1.0850, hoping the euro strengthens against the dollar.
FX Spot noun
A transaction where two currencies are exchanged at the current market rate, with settlement typically T+2.
You convert $5,000 to EUR at 1.0870 spot to pay a European freelancer.
FX Forward noun
An agreement to exchange currencies at a future date at a predetermined rate, used to hedge currency risk.
A Nigerian importer agrees to buy $100,000 in three months at ₦1,550/$ to protect against naira depreciation.
FX Futures noun
Standardised exchange-traded contracts to buy or sell a currency at a future date, with daily mark-to-market.
A hedge fund sells CME EUR/USD futures to lock in a March 2026 rate.
Currency Pair noun
The quotation of two different currencies, where one is base and the other is quote (e.g., GBP/USD).
In GBP/USD 1.3050, one British pound buys 1.3050 US dollars.
Base Currency noun
The first currency in a pair; it represents how much of the quote currency is needed to buy one unit.
In EUR/USD, EUR is base; a rise from 1.08 to 1.10 means euro appreciated.
Quote Currency noun
The second currency in a pair, representing its value per one unit of base.
In USD/JPY 150.20, the quote currency is JPY.
Pip noun
The smallest price move in a currency pair, usually 0.0001 for most pairs (1/100th of 1%).
If EUR/USD moves from 1.0850 to 1.0855, it gained 5 pips.
Lot Size noun
Standardised quantity of a trade: standard lot = 100,000 units, mini lot = 10,000, micro lot = 1,000.
A retail trader opens 0.1 lots (10,000 units) on USD/CAD to risk only $1 per pip.
Leverage noun
Borrowed capital to increase potential return, e.g., 100:1 means $1,000 controls $100,000.
With 50:1 leverage, a $2,000 margin lets you trade $100,000 of EUR/USD.
Margin Call noun
A broker demand to deposit more funds when equity falls below required margin level.
After a 200‑pip drop, your account hits 80% margin; you must add $500 or positions are closed.
Crypto Arbitrage noun
Profiting from price differences of the same asset on different exchanges or markets.
BTC trades at $63,000 on Binance and $63,500 on Kraken; buy on Binance, sell on Kraken for $500 profit (minus fees).
Triangular Arbitrage noun
Exploiting inconsistencies among three currency pairs (e.g., USD, EUR, GBP) to lock in risk‑free profit.
USD/EUR 0.92, EUR/GBP 0.85, USD/GBP 0.78: a cycle yields 0.2% profit per loop.
P2P Flagging noun
When a peer‑to‑peer exchange account is temporarily restricted due to suspicious activity or chargebacks.
Your Binance P2P gets flagged after three users dispute the same USDT trade; you must provide proof of transaction.
Stablecoin noun
A cryptocurrency pegged to a stable asset like the USD, used for trading and payments.
You receive USDT (Tether) from a client instead of bank wire, then swap to naira on a P2P platform.
Algorithmic Stablecoin noun
A stablecoin that uses algorithms and smart contracts to expand/contract supply, without full collateral.
UST (Terra) was a famous algorithmic stablecoin until its collapse; now new designs use seigniorage.
Collateralization noun
Backing a loan or stablecoin with assets to secure its value.
DAI is overcollateralized: you deposit $150 ETH to mint $100 DAI.
Overcollateralized adj
Having collateral value greater than the loan amount, common in DeFi lending.
MakerDAO requires 150% overcollateralization for DAI loans.
Flash Loan noun
An uncollateralized loan that must be borrowed and repaid within the same blockchain transaction.
A trader borrows $1B USDC, executes arbitrage across three DEXes, and repays in one block, keeping $50k profit.
MEV noun
Miner/Maximal Extractable Value — profit extracted by validators/miners by reordering, including, or censoring transactions within a block.
A validator sees a large Uniswap buy and inserts their own buy first, pushing price up (front‑running).
Slippage noun
The difference between expected price of a trade and the executed price due to market movement.
You try to buy ETH at $3,150, but during confirmation it moves to $3,155 – that's $5 slippage.
Liquidity Pool noun
A smart contract that holds funds locked by users to facilitate decentralised trading (AMM).
You provide ETH/DAI to a Uniswap pool and earn trading fees proportional to your share.
AMM noun
Automated Market Maker — a decentralised exchange protocol that uses a mathematical formula (e.g., x*y=k) to set prices.
Uniswap is an AMM; you swap tokens directly from the pool without an order book.
DEX noun
Decentralised Exchange — a peer‑to‑peer marketplace where trades occur directly on‑chain, without a central intermediary.
You trade ETH for ARB on a DEX like Uniswap or PancakeSwap using your wallet.
CEX noun
Centralised Exchange — an exchange run by a company that holds custody of user funds and matches orders off‑chain.
Binance, Coinbase, and Kraken are CEXs; you deposit crypto and trade with their order book.
Cold Wallet noun
A cryptocurrency wallet that is not connected to the internet, offering high security.
You store your long‑term BTC on a Ledger hardware wallet (cold) and only connect to sign transactions.
Hot Wallet noun
A wallet connected to the internet, used for daily transactions and trading.
You keep small amounts in MetaMask (hot) for DeFi interactions, while most funds stay on a cold wallet.
Seed Phrase noun
A list of 12 or 24 words that can restore a wallet; the master key to all funds.
Never enter your 24‑word seed phrase into any website — it gives full access to your crypto.
Private Key noun
A secret alphanumeric code that allows spending of cryptocurrencies from a specific address.
Your private key is derived from the seed phrase; it must never be shared.
Public Key noun
Derived from the private key, it can be shared and is used to generate wallet addresses.
Your public key is hashed to create your Ethereum address, which you give to receive funds.
Hardware Wallet noun
A physical device (like Ledger or Trezor) that stores private keys offline.
You sign transactions by connecting your Ledger to a computer, but private keys never leave the device.
Multi-Sig adj
A wallet that requires multiple private keys to authorise a transaction (e.g., 2-of-3).
A DAO treasury uses a 3-of-5 multi-sig: three members must sign to move funds.
Smart Contract noun
Self‑executing code on a blockchain that automates agreements and transactions.
Uniswap's smart contract holds liquidity and executes trades when users swap tokens.
Gas Fees noun
Payments to validators/miners for processing transactions on a blockchain.
An Ethereum swap costs 0.005 ETH in gas when the network is congested.
Gwei noun
A denomination of Ether (1 Gwei = 10⁻⁹ ETH), used to price gas.
A transaction with gas price 30 Gwei costs 30 * gas used.
Wei noun
The smallest denomination of Ether: 10⁻¹⁸ ETH.
Smart contract balances are often tracked in wei.
Blockchain noun
A distributed, immutable ledger where transactions are grouped into blocks and cryptographically linked.
Bitcoin's blockchain records every BTC transfer since 2009.
Layer 1 noun
A base blockchain (e.g., Ethereum, Solana) that handles security, consensus, and settlement.
Ethereum is a Layer 1; it settles final transactions.
Layer 2 noun
A secondary protocol built on top of a Layer 1 to improve scalability (e.g., Arbitrum, Optimism).
Arbitrum processes transactions off‑chain, then posts batches to Ethereum L1.
Rollup noun
A Layer 2 scaling solution that executes transactions off‑chain and posts compressed data to L1.
Optimistic rollups assume transactions are valid unless challenged.
zk-Rollup noun
A rollup that uses zero‑knowledge proofs to validate batches, offering faster finality.
zkSync and StarkNet are popular zk-rollups on Ethereum.
Optimistic Rollup noun
A rollup that assumes transactions are valid by default, with a challenge period for fraud proofs.
Optimism uses a 7‑day challenge window.
Sidechain noun
An independent blockchain that runs parallel to a main chain, often using a two‑way peg.
Polygon PoS is a sidechain to Ethereum, with its own consensus.
Bridge noun
A protocol that transfers assets or data between different blockchains.
You use the Arbitrum bridge to move ETH from Ethereum to Arbitrum.
Cross-Chain adj
Ability to exchange information or assets across different blockchains.
Polkadot enables cross‑chain communication via its relay chain.
Oracle noun
A service that brings real‑world data (e.g., price feeds) onto the blockchain.
Chainlink oracles provide ETH/USD prices to lending protocols like Aave.
Chainlink noun
A decentralised oracle network that supplies tamper‑proof data to smart contracts.
Synthetix uses Chainlink price feeds for its synthetic assets.
Proof of Work noun
A consensus mechanism where miners solve cryptographic puzzles to validate blocks (Bitcoin).
Bitcoin miners compete to find a nonce that satisfies the target hash.
Proof of Stake noun
Consensus where validators are chosen to create blocks based on the amount they stake.
Ethereum moved to PoS in 2022; validators stake 32 ETH to propose blocks.
Consensus Mechanism noun
The process by which blockchain participants agree on the valid state of the ledger.
PoW, PoS, and DPoS are different consensus mechanisms.
Halving noun
A programmed reduction of block rewards in Bitcoin (every 210,000 blocks), cutting new supply in half.
The 2024 halving reduced Bitcoin block reward from 6.25 to 3.125 BTC.
Hashrate noun
The total computational power used to mine a proof‑of‑work blockchain.
Bitcoin's hashrate hit 600 EH/s in 2026, indicating strong miner competition.
Staking noun
Locking cryptocurrency to support a PoS network and earn rewards.
You stake 10 SOL on Solana and receive ~7% APY in staking rewards.
Tokenomics noun
The economic model of a cryptocurrency, including supply, distribution, and incentives.
Analyse tokenomics: max supply 1B, 20% vested for team over 4 years.
ATH / ATL noun
All‑time high (peak price) and all‑time low (lowest price) of an asset.
BTC ATH was $73,000 in 2024; its ATL was below $1 in 2010.