IMPCT Institute
Glossary
Every term introduced in the course, in one place. Updated as new lessons release. Each entry links back to the day where the term first appeared.
A
- AMM (Automated Market Maker)Introduced Day 17 →
- A DEX that uses a mathematical formula and a pool of two assets to set prices, instead of matching buyers to sellers via an order book.
- APY (Annual Percentage Yield)Introduced Day 18 →
- The effective annualized return on an investment, accounting for compounding.
- Automated Market Maker (AMM)Introduced Day 10 →
- The pricing mechanism most DEXs use instead of an order book. Uses liquidity pools and a formula to set prices algorithmically.
B
- Base feeIntroduced Day 5 →
- (Ethereum post-EIP-1559) The portion of the gas fee that is burned, dynamically adjusted based on network demand.
- BitcoinIntroduced Day 1 →
- The first cryptocurrency, launched in January 2009 by an anonymous developer or group using the name Satoshi Nakamoto. Designed as peer-to-peer electronic cash that doesn't require a financial intermediary.
- BlockIntroduced Day 2 →
- A bundle of transactions added to the blockchain at one time. New blocks are produced on a regular cadence (about every 10 minutes for Bitcoin, about every 12 seconds for Ethereum).
- Block explorerIntroduced Day 2 →
- A website that lets you read the blockchain. Etherscan, mempool.space, and similar tools show every transaction, address, and block in human-readable form.
- BlockchainIntroduced Day 1 →
- A shared, append-only ledger maintained by a distributed network of computers rather than by a single authority.
- Blockchain trilemmaIntroduced Day 8 →
- The tradeoff every base-layer blockchain makes between security, decentralization, and scalability. You can optimize for two; the third gives.
- BridgeIntroduced Day 8 →
- Infrastructure that moves assets between chains or layers. Often the most-attacked part of crypto.
- Byzantine Generals problemIntroduced Day 2 →
- A 1982 computer-science problem describing the difficulty of getting independent parties to agree on a shared state when some of them may be dishonest. Bitcoin's blockchain solves a real-world version of this problem.
C
- CCTP (Cross-Chain Transfer Protocol)Introduced Day 19 →
- Circle's native USDC bridging system. Burns on source, mints on destination, eliminating the wrapped-asset middleman.
- Centralized exchange (CEX)Introduced Day 10 →
- A company that operates a trading venue, holds customer assets, and matches trades on an internal order book. (Coinbase, Binance, Kraken.)
- ChainlinkIntroduced Day 20 →
- The dominant oracle network. Most major DeFi protocols use Chainlink price feeds.
- CoinIntroduced Day 13 →
- The native asset of a blockchain. BTC, ETH, SOL, etc. Issued by the protocol.
- ComposabilityIntroduced Day 15 →
- The property that lets DeFi protocols use each other as building blocks. "Money legos."
- Concentrated liquidityIntroduced Day 17 →
- The Uniswap V3 mechanism that lets LPs provide liquidity within a specific price range, improving capital efficiency.
- Constant-product formulaIntroduced Day 17 →
- The x × y = k formula used by Uniswap V2 and many other AMMs. The product of the two asset balances stays constant through every trade.
- CryptocurrencyIntroduced Day 1 →
- A form of digital money that uses cryptography to secure transactions and is recorded on a blockchain rather than in the books of a central institution.
- CryptographyIntroduced Day 1 →
- The mathematical techniques used to secure information. In crypto, primarily public-key cryptography (which lets users prove ownership without revealing secrets) and hashing (which fingerprints data).
- CustodialIntroduced Day 4 →
- A wallet or service where a third party (an exchange, a fintech) holds your private keys on your behalf.
D
- DAIIntroduced Day 9 →
- MakerDAO's crypto-collateralized stablecoin. Decentralized, structurally robust, capital-inefficient.
- DecentralizationIntroduced Day 1 →
- The property of a system in which no single party can unilaterally change the rules or block participation.
- Decentralized exchange (DEX)Introduced Day 10 →
- A trading venue implemented as smart contracts on a blockchain. Customer assets stay in self-custody throughout. (Uniswap, Curve, dYdX.)
- DeFi (Decentralized Finance)Introduced Day 15 →
- Financial services implemented as smart contracts rather than as company-run businesses.
- Double-spend problemIntroduced Day 1 →
- The challenge of preventing someone from spending the same unit of digital money twice. Solved by Bitcoin without needing a central authority.
E
- EIP-1559Introduced Day 5 →
- An Ethereum upgrade activated in August 2021 that introduced the base fee + tip structure and made gas fees more predictable.
- ERC-20Introduced Day 13 →
- The most common Ethereum standard for fungible tokens.
- ERC-721Introduced Day 13 →
- The most common Ethereum standard for non-fungible tokens.
- Ether / ETHIntroduced Day 6 →
- The native currency of the Ethereum network. Used to pay gas fees and as a store of value.
- EthereumIntroduced Day 6 →
- The second major blockchain, launched in 2015. The original general-purpose smart-contract platform.
- EVM (Ethereum Virtual Machine)Introduced Day 6 →
- The runtime environment that executes Ethereum smart contracts. Other chains compatible with the EVM (Polygon, Arbitrum, Base, etc.) are called "EVM-compatible."
F
- Flash loanIntroduced Day 15 →
- A loan that exists for a single transaction. Borrow without collateral, use the funds, repay (plus fees) all before the transaction ends. If you can't repay, the entire transaction reverts.
- FungibleIntroduced Day 13 →
- Property where any one unit is interchangeable with any other. (Dollars, bitcoin, USDC.)
G
- GasIntroduced Day 5 →
- The fee paid to process a transaction. Determined by an auction across all the transactions in the mempool.
- Governance tokenIntroduced Day 13 →
- A token that grants voting rights in a DAO or protocol. (UNI, AAVE, COMP.)
H
- HalvingIntroduced Day 3 →
- The protocol-enforced event, occurring approximately every four years, that cuts the rate of new bitcoin entering circulation in half. Tightens supply against existing demand.
- Hardware walletIntroduced Day 4 →
- A physical device that stores private keys in an offline chip and signs transactions with a button press. (Ledger, Trezor, Coldcard, GridPlus.)
- HashIntroduced Day 2 →
- A cryptographic fingerprint of a piece of data. If the data changes at all, the hash changes completely. Used to chain blocks together and detect tampering.
- Hash rateIntroduced Day 3 →
- The total computational power being applied to mining Bitcoin at any given time. Higher hash rate = more secure network.
I
- Impermanent lossIntroduced Day 17 →
- The opportunity cost an LP bears when the price of the pool's assets diverges from their entry price. The "loss" is relative to holding, not to the initial dollar amount.
L
- Layer 1 (L1)Introduced Day 8 →
- A base-layer blockchain. Bitcoin, Ethereum, Solana, Avalanche, etc.
- Layer 2 (L2)Introduced Day 8 →
- A blockchain that runs on top of an L1, inheriting its security while offering cheaper or faster execution.
- Lending protocolIntroduced Day 16 →
- A smart-contract system where users can deposit assets to earn interest or borrow assets against collateral. (Aave, Compound, Morpho.)
- LeverageIntroduced Day 16 →
- Borrowing against your existing position to take a larger position. Amplifies both gains and losses.
- Liquid staking token (LST)Introduced Day 12 →
- A token representing your staked position plus accrued rewards, which remains tradeable. (stETH, rETH, etc.)
- LiquidationIntroduced Day 16 →
- The process by which a third party repays an under-collateralized loan and seizes part of the collateral, plus a bonus. Keeps the protocol solvent.
- Liquidity poolIntroduced Day 17 →
- A smart-contract holding reserves of two (or more) assets that an AMM uses to facilitate trades.
- Liquidity provider (LP)Introduced Day 17 →
- Someone who deposits assets into a liquidity pool to earn a share of trading fees.
- Loan-to-value (LTV)Introduced Day 16 →
- The ratio of a loan's value to the value of the collateral backing it.
- Lock-and-mintIntroduced Day 19 →
- The most common bridge design: lock the asset on the source chain, mint a wrapped version on the destination chain.
M
- MemecoinIntroduced Day 13 →
- A token whose value is primarily driven by community and meme appeal rather than utility. (DOGE, SHIB, PEPE.)
- MempoolIntroduced Day 5 →
- The public waiting area where unconfirmed transactions sit before being included in a block.
- MultisigIntroduced Day 4 →
- A wallet that requires multiple private keys to authorize a transaction. Used for high-value holdings to eliminate single points of failure.
N
- Network effectIntroduced Day 3 →
- The phenomenon where a network becomes more valuable as more people use it. Money, languages, and platforms all exhibit network effects.
- NFT (Non-Fungible Token)Introduced Day 13 →
- A unique, non-interchangeable token.
- NodeIntroduced Day 2 →
- A participant in the blockchain network. Full nodes hold a complete copy of the chain's history and help validate new blocks.
O
- OracleIntroduced Day 20 →
- Infrastructure that brings off-chain data on-chain so smart contracts can use it.
- Oracle manipulationIntroduced Day 20 →
- An attack where someone manipulates the data source an oracle pulls from, causing the on-chain price to be wrong.
P
- PegIntroduced Day 9 →
- The target price a stablecoin tries to maintain (typically $1.00).
- PermissionlessIntroduced Day 15 →
- Describes a protocol that anyone can interact with without applying for access or being approved.
- Price feedIntroduced Day 20 →
- An oracle that provides current asset prices, the most common type of oracle data.
- Private keyIntroduced Day 4 →
- The secret cryptographic value that controls a blockchain address. Whoever has the private key can spend the funds at that address.
- Proof-of-stake (PoS)Introduced Day 12 →
- The consensus mechanism Ethereum (post-2022) and most modern L1s use, where security comes from locked-up capital.
- Proof-of-workIntroduced Day 2 →
- The mechanism by which Bitcoin participants compete to add the next block. Requires real computational effort, which makes attacks expensive.
- Public keyIntroduced Day 4 →
- The publicly shareable counterpart of a private key, used to derive your wallet address. Anyone can send funds to it; only the private key can move them out.
R
- Real yieldIntroduced Day 12 →
- Yield paid from genuine economic activity (lending fees, trading fees, transaction fees, real-world asset returns) rather than from inflation or new deposits.
- RollupIntroduced Day 8 →
- A type of L2 that batches transactions off-chain and posts a summary or proof back to the L1. Two main types: optimistic and zero-knowledge.
- Rug pullIntroduced Day 18 →
- A scam where the team behind a protocol disappears with deposits, often after artificially pumping the token's price.
S
- Seed phraseIntroduced Day 4 →
- A list of 12 or 24 random words that encodes a wallet's private key in a human-readable form. Used to recover or import a wallet on any compatible device.
- Self-custodyIntroduced Day 4 →
- A wallet where you alone hold the private keys.
- SlashingIntroduced Day 12 →
- The protocol-enforced penalty (loss of staked tokens) for validator misbehavior.
- SlippageIntroduced Day 17 →
- The difference between the expected price of a trade and the actual price received, caused by the size of the trade relative to pool depth.
- Smart contractIntroduced Day 6 →
- A program deployed to a blockchain that executes deterministically when called. The code is the contract; there is no human in the loop.
- StablecoinIntroduced Day 9 →
- A cryptocurrency designed to hold a stable value, usually pegged to the US dollar.
- StakingIntroduced Day 12 →
- Locking up tokens as collateral to participate in proof-of-stake validation, in exchange for rewards.
T
- TokenIntroduced Day 13 →
- Any asset other than a coin that exists on a blockchain. Created by deploying a smart contract.
- Token emissionsIntroduced Day 18 →
- The newly issued tokens a protocol pays out to incentivize usage. Often dilutes existing holders.
- TransactionIntroduced Day 5 →
- A signed instruction broadcast to a blockchain network, specifying what should happen (transfer, contract interaction, etc.).
- TVL (Total Value Locked)Introduced Day 15 →
- The total dollar value of assets deposited into a DeFi protocol or across the DeFi ecosystem. The most-used headline metric for DeFi.
U
- USDCIntroduced Day 9 →
- Circle's fiat-backed stablecoin. Most institutionally trusted in the US market.
- USDTIntroduced Day 9 →
- Tether's fiat-backed stablecoin. Largest by global volume, historically less transparent.
- Utilization curveIntroduced Day 16 →
- The algorithmic formula that sets interest rates based on the ratio of borrowed to total deposited in a pool. Higher utilization = higher rates.
V
- ValidatorIntroduced Day 5 →
- The participant that adds new blocks to the chain on proof-of-stake networks (Ethereum, Solana, etc.).
W
- Wrapped assetIntroduced Day 19 →
- A token on one chain representing a claim on an asset locked on another chain. (wETH on Solana, wBTC on Ethereum.)
Y
- Yield farmingIntroduced Day 18 →
- Moving capital between protocols to chase the highest available yield, often capturing token-emission rewards.