Bonding

Bonding is a process similar to staking used by Proof-of-Stake networks. Like staking, it involves the blocking of cryptocurrencies as collateral by network participants to participate in certain activities. In Polkadot’s network, for example, parachains that want to connect to the Relay Chain must bond a set amount of DOT. In the Terra ecosystem, bonding LUNA allows to validate transitions and vote on blockchain governance decisions. In bonding, locked cryptocurrencies function as a security deposit, the moment they are unlocked, the rights attached to them are lost.

Correlated words

Liquid Staking

Liquid Staking allows the staked assets to be simultaneously utilised in other protocols, maintaining liquidity while earning rewards.

TVL

TVL (Total Value Locked) represents the cumulative value of cryptocurrencies locked in a DeFi protocol or decentralised application (dApp).

Wrapped Token

A Wrapped Token represents the value of one crypto on a different blockchain standard, facilitating cross-chain transactions and usage.

Staking Derivative

Staking Derivatives are financial products derived from staking, with values dependent on the performance of staked tokens and network reward

Yield Farming

Yield Farming, an essential aspect of decentralised finance (DeFi), allows cryptocurrencies to be used to earn interest.

Swap

Swap is the exchange of one crypto token for another via a decentralised platform, enabling seamless asset conversion.

Staking

Staking involves holding cryptocurrencies in a digital wallet to support network operations and earning rewards for participation.

Smart Contract

A Smart Contract is a digital contract with terms automatically executed by the blockchain when predetermined conditions are met.

Crypto Lending

Crypto Lending involves providing loan services using cryptocurrencies on centralized or decentralised platforms.

ERC-20

ERC-20 is a token standard on Ethereum, allowing many projects to create and launch their own cryptocurrencies on its platform.

DEX

A Decentralized Exchange (DEX) facilitates cryptocurrency trading without intermediaries, directly utilising blockchain technology.

DeFi

Decentralised Finance (DeFi) comprises financial solutions based on blockchain technology, operating in a decentralised manner.

DApp

DApp, or Decentralised Application, allows users to interact with blockchain-based services in a distributed network environment.

DAO

A Decentralised Autonomous Organisation (DAO) operates on blockchain principles, automating governance and decision-making.

CeFi

CeFi, or Centralised Finance, is the centralised alternative to DeFi, offering traditional finance-like services on blockchain.

Arbitrage

Arbitrage is the simultaneous buying and selling of assets in different markets to profit from price disparities.

APY

APY (Annual Percentage Yield) in DeFi indicates the annual percentage return earned or paid on an investment or loan.

APR

The Annual Percentage Rate (APR) is the yearly interest rate earned on an investment or charged on a loan, expressed as a percentage.

AMM

Automated Market Makers (AMMs) are smart contracts in decentralized exchanges, facilitating liquidity and trade execution.

Aggregator

An Aggregator collects and presents similar content or services from various sources, exemplified by platforms like Yearn Finance.